What You Need To Know About Working with a Real Estate Agent

Every day, I come across people are gearing up to buy a home here in Southwest Florida. This does not surprise me, as now is the time to buy a home here. Low mortgage loan rates, a plethora of wonderful neighborhoods to choose from, and prices that we haven't seen in a long time are the catalyst for those looking to buy a primary, secondary or vacation home here in Southwest Florida. Additionally, the market is improving and activity is increasing. You can feel the positivity in the market about buying and this is no time to be on the sidelines. All great news, BUT nothing can dampen that buying experience faster than a less-than-optimal real estate agent on your side. The point is if you're thinking of buying (or selling) you need to get the best agent you possibly can to represent you. Just anyone with a real estate license won't do. If you're not sure what characteristics are common to great agents, let's review some characteristics common to highly successful real estate agents.

-- Close more transactions: A good sign in an agent is when they have successfully closed many transactions on an annual basis. If your agent has not, you may want to ask why.

-- Work longer hours: If your agent is not available during key business hours or shuts off at 4:59PM every day, you have to wonder if they really are doing what it takes to market your home or find you the perfect home. Your agent has to be willing to strike while the iron's hot and that will not always be between the hours of 9AM and 5PM.

-- Spend more on marketing: Successful agents tend to spend more money on their marketing. This is a KEY clue to let you know if your agent has the resources to market your home. If your agent cannot present you with online and offline strategies or have spent very little to market his or her own brand, you can assume that those same strategies (or lack thereof) will be passed on to you.

-- Spend more on technology: Successful agents spend more on technology purchases to aid them in their business. You could say the same thing here as spending more on marketing. Marketing and technology are BOTH critical to an agent's success. Being uneducated or having a lack of resources in these two areas should be a deal breaker.

-- Use social networking and web sites: Successful agents update their web site and/or blog at least a few times a week and are more connected on Facebook. These agents are also more likely to have a YouTube account and Twitter account and to have more followers than mid-range earners. A top agent should be able to present you an online strategy for marketing your home or for finding a home. The agent who is "old school" or just doesn't like social media is the agent you want to politely turn down. We live in a world where folks all ages turns to the internet for information; real estate sellers and buyers included. If your agent is not well-versed in social media tools, you have already lost the battle.

Lastly, characteristic of a good agent also depends on his or her work ethic. For real estate agents, there is a code of ethics. How does the Code of Ethics affect every day real estate practices? Your agent should…

1. Be honest with all parties in the transaction - not just with you, as his or her client, but also with the other real estate practitioner and his or her clients. For example, if an agent represents a buyer with a spotty credit history, they can't be dishonest with sellers about this fact. At the same time, agents should help their buyer clients collect and assemble information, such as credit reports and audited tax returns, to demonstrate that the buyer has addressed the problem and improved their situation.

2. Put your interests ahead of his or her own, at all times. Your agent should make every effort to understand your needs and should thoroughly research available inventory, and share all relevant information with you so you can make an informed decision. This service is provided regardless of the compensation available.

3. Disclose all pertinent facts regarding the property and the transaction to both buyer and seller. If your agent believes information provided by a seller is questionable, he or she is obligated to investigate. Your agent should recommend that you consult with experts, such as home inspectors, to address concerns.

4. Be truthful in all communications with the public. When agents distribute newsletters, create web sites, or place advertisements, they must be careful not to represent other real estate professionals' work product as their own. If recently sold or listed properties in the community are publicized, it must be clear whether the agent was actually involved in the transaction, or whether that data came from the local multiple listing service or other source. This ensures that the public understands the agent's experience and can make an informed decision when choosing real estate representation.

While the common characteristics of a good agent and the Code of Ethics may seem like common sense and a simple set of rules, they should be important to the agent you choose and he or she should demonstrate use of them. Buying a home or selling your home here in Southwest Florida can be an exciting prospect for you during this season. However, with the wrong agent, you could find yourself sorely disappointed. Heed the advice given and get yourself the best agent you can! You'll be glad you did.

What are you willing to do to get your home sold?

Here in Southwest Florida, we can see the market improving. In the Naples, Bonita Springs, and Estero markets, inventory has decreased by 22% over this time in 2011. We have also seen the median price for homes under $300,000 increase as well. This season has been bustling with real estate activity and there are more winter visitors here than last year - that is evident by the immense amount of traffic! Yes, things are looking up but, make no mistake - you'll still have to be proactive if you want to sell your home. We are in the thick of season, but it's not too late. The point is…what are you willing to do to get your home sold?

According to a recent survey of 600 agents conducted by a national real estate brokerage, agents are reporting that sellers are more willing to price their homes competitively as well as change the appearance of their home in order to lure buyers. This is a step in the right direction, as many homeowners, not too long ago, were indeed not ready to accept the fact that "right pricing" was the key to a sale. Also reported that compared to last year,Â sellers are more willing to remove clutter, make cosmetic updates such as minor repairs, "depersonalize" the home and stage the home to better their chances of getting it sold. The survey also found that agents say buyers are putting great value on new or updated kitchens, bathrooms, and open floor plans.

If you're thinking about selling your home or is your home is already listed, but not "sale" ready, you may want to think about using some of the strategies mentioned above. Right pricing is critical, but are you willing to spend some remodeling dollars?

If your home is in need of some kitchen or bath updating and your budget can support it, you may want to think about remodeling those areas. Of course you don't have to, but realize that there may be other homes in your neighborhood selling for the same or similar price that have updated kitchens and baths. This will make it very challenging to be competitive.

Here are some top projects that add value to your home:

Remodeling the kitchen. Most people consider the kitchen to be the heart of the home, and because of this, updates in this room pay off. According to HGTV, you can expect to recoup 60%-120% of your investment on a kitchen remodel, as long as you don't go overboard.

A little paint goes a long way. When it comes to how much you spend on a kitchen remodel, prices can run the gamut, from $5,000 to $75,000, or more. Get the biggest bang for your buck on a kitchen remodel by looking at color. Fresh paint, in modern colors, can go a long way towards updating the look of your kitchen. Plus, paint is relatively cheap.

Energy-efficient appliances. Replace old appliances with energy-efficient models. Energy Star-rated appliances are better for the environment, and they also help you save money, because they use less energy. Potential buyers often look for ways to save money when shopping for a

Bathroom addition. If your home only has one or two bathrooms, you can recoup a large chunk of your investment by adding another one. HGTV estimates that you can recoup 80%-130% of whatever you spend adding a bathroom. When it comes to finding room in your house for an extra bathroom, take a look at any extra rooms or underutilized spaces. If you want a half-bath you need at least 18 square feet. If you want a full bath, including a stand-up shower, you need at least 30 square feet. If you want a bathtub, make sure you have at least 35 square feet to work with for a bathroom addition.

Reinventing a room. Adding more square footage to your home with a new room can be an incredibly expensive project. However, you can recoup some of your investment, anywhere from 50%-83%. Before you demolish walls and rafters, try to think about the ways that potential buyers can use the space.

Adding energy-efficient windows. These days, buyers shop for homes with energy efficiency in mind. Old leaky single-pane windows are a major turn off. According to HGTV, you can expect to recoup 60%-90% of your costs when you invest in energy-efficient windows.

Energy-efficient insulation. If your home lacks basic insulation and has old doors that let in plenty of hot air, home inspectors working with potential buyers will include this in their reports. You can add extra insulation to your attic for $200 or less. Seal cracks around the house to save even more money on energy costs, and to make your home more appealing to buyers.

Basic updates. Basic updates add the most value to your home. Keep the paint fresh, fix the roof when it leaks, and get rid of any mold that you find. These types of chores keep your home from deteriorating over time. Buyers want a healthy, solid, safe home, and they look carefully for signs of routine maintenance.

You have many options for home improvement projects that add value to your home. If you plan to remodel, concentrate your efforts on smaller projects that make your home more appealing to budget-minded buyers. Focus onÂ energy efficiencyÂ and small upgrades that add character and comfort to your home.

Additionally and perhaps most importantly, your real estate agent can help you assess what should be the priority project in getting ready to sell your home. Be sure to find an agent who knows your neighborhood very well, as he or she will be able to determine what is going to keep you competitive in the marketplace. From there, price it right and you'll sell that home!

The Buyer's Agent: What to expect?

Right now there are many fine properties to choose from at great prices. With low mortgage rates, there has not been a better time to buy in Southwest Florida. If you're in the market to buy, be aware that mortgage rates are steadily inching upwards and inventory is dwindling as well, especially in the Bonita Springs, Estero and Naples areas. So, whether you're looking for your primary residence or a 2nd home, you should be out there looking right now!

That being said, this article will focus on the role of the buyer's agent, as well as the role of the buyer. You certainly want to be involved in finding the home of your dreams, but the point is what should your agent be doing? Whether you're a first-time buyer or a seasoned buyer in Southwest Florida, this article will help you understand what your agent should be providing and what your role should be in the process. And, just in case you were wondering…yes, if you want a smooth transaction, you need a REALTOR®, not just an agent, to represent you in the process. This is actually a good place to start. Let's look at why you need a REALTOR®.

Not every real estate agent or broker is a REALTOR®. That term and the familiar Block "R" logo are trademarked by the National Association of REALTORS® and can only be used by those are REALTOR® members through their local association of REALTORS®.

While all REALTORS® are state-issued licensees as agents or brokers, the major difference between a "real estate licensee" and a REALTOR® is that REALTORS® have taken an oath to subscribe to a stringent, enforceable Code of Ethics with Standards of Practice that promote the fair, ethical and honest treatment of all parties in a transaction. Non-member licensees have taken no such oath and are not morally bound to the ethical practices and principles set for in the REALTOR® Code. For that extra measure of peace of mind, ensure the individual seeking to represent you is both a real estate licensee and a REALTOR®.

Now that we have that out of the way…

As a buyer, you may not realize that many of the most important services and steps are performed behind the scenes by either the Realtor® or the brokerage staff, and traditionally have been viewed simply as part of their professional responsibilities to the client. But, without them, the transaction could be in jeopardy. As a buyer, the first thing you need to do is find an agent to represent you. This person must have a clear understanding of your lifestyle and needs, as well as a razor-sharp knowledge of the Southwest Florida market. He or she must also reflect the level of skill, knowledge and attention to detail required in today's real estate transaction. Once you find that perfect agent, your role at this stage is to give the agent as much information as possible about your lifestyle needs so that the agent can begin the search. Once the agent agreement is forged, the search begins.

Your agent should explain agency disclosure and the benefits of being pre-approved by a lender first. A pre-approval letter from the lender is key in making an offer. From there, a search of the MLS and other resources to find properties that fit the Buyer's criteria. Scheduling time to preview each property before showing property to you will avoid wasting time.

The Offer and Contract

Once a property is found that, a contract will be written. Your agent should pull comparable properties to be sure you're making the best offer possible. Additionally, your agent should go through the entire contract with you line by line to be sure you understand of all terms, contingencies and due dates. From there, your agent will negotiate on behalf of you, the buyer, setting time limit for loan approval and closing date.

Tracking the Loan Process

Your agent will confirm verifications of deposit and employment have been returned and will follow loan processing through to the underwriter. In addition to contacting your lender weekly to ensure processing is on track, your agent will relay final approval of your loan application to the Seller's agent.

Home Inspection

Your agent will now coordinate a professional home inspection with the Seller and then assist you in reviewing the home inspector's report, ensuring the Seller's compliance with Home Inspection Clause requirements. Also, verification that the Seller's agent is working with the Seller to hire reliable contractors to perform any required repairs may also be needed. Lastly, verification by your agent that completion of all required repairs are made is required.

The Appraisal

Your agent will now verify that an appraisal has been ordered and follow-up on appraisal. Negotiation of the price of the home if the appraisal comes in lower than the agreed upon sales price may be required.

Closing preparations and duties

Once all is in order, the contract is signed by all parties and your agent will coordinate closing process with seller's agent and lender. Your agent will also notify you as to where the closing is being held and work with the seller's agent in scheduling and conducting buyer's final walk-thru prior to closing.

Follow Up After Closing

Once the property closes, your agent should answer questions about filing claims with home owner warranty company if requested and attempt to clarify and resolve any conflicts about repairs if you are not satisfied. Your agent should also respond to any follow-up calls and provide any additional information required from office files.

This is merely a bird's eye view of the role of the buyer's agent, as there are many other small details that happen behind the scenes. As a buyer, the best thing you can do is to find the best agent you can, communicate as best you can to your agent, be patient, and prepare your loan documents before the home search. Your agent, who should be qualified and experienced, should handle the rest for you.

Is 'Normal Lending' Key to Continued Recovery in Southwest Florida?

There is no denying that the Federal Reserve's efforts to keep interest rates low have contributed to increased housing affordability in Southwest Florida. However, even with these efforts, the banks' strict lending standards are still hindering market progress. Federal Reserve (FR) Chairman Ben Bernanke discussed that banks need to take a balanced approach, which consists of making prudent loans but not turning away creditworthy borrowers, at the February 2012 International Builders' Show in Orlando. Reiterating recommendations outlined in the a Federal Reserve white paper released Jan. 5, Bernanke called for increased lending to creditworthy home buyers and more loan modifications and mortgage refinancing to help revitalize the housing industry and economy. Relaxed credit standards contributed to the housing crisis, thus tightened borrowing was necessary to protect banks, investors, and borrowers, Bernanke said. However, the lending pendulum may have swung too far the other direction. Many deals fall through due to financing, while some can no longer qualify. Nationally speaking, 34 percent of REALTORS® have reported that mortgage accessibility is the biggest factor prohibiting their clients from purchasing a home, according to the 2011 NAR Member Profile.

Why have banks really tightened lending standards?

The researchers say it's mostly because there's less money available to lend. "During the housing boom, as brokers produced a flood of new mortgages, Wall Street bankers churned out a torrent of mortgage-backed bonds for investors waiting to snap them up," an article at MSNBC.com notes, in describing the study's findings. "That market has all but vanished; 90 percent of new mortgages written today are backed by the government."

Also, researchers have found that lenders are swamped with more paperwork, which is also causing delays in processing. Many lenders have issued stricter documentation requirements before they'll approve a loan. Nowadays, nearly 90 percent of mortgage applications require "full documentation" before getting approved. From 2000 to 2006, less than 60 percent of applications required "full documentation," researchers found.

Tight home loan credit has affected everything from home sales to household finances. Many borrowers have struggled to qualify for loans to buy homes. Others can't take advantage of some of the lowest interest rates in 50 years because they don't have enough equity in their homes to refinance. They face more demands to prove their incomes, verify assets, show steady employment and explain things such as new credit cards and small bank account deposits. Even then, they may not qualify for the lowest interest rates and down payments have risen. The National Association of REALTORS® (NAR) has agreed that that lending standards are too tight and are hurting the housing industry's recovery.

The point is will "normal lending" affect the Southwest Florida market positively?

In the Southwest Florida market, we have a lot of cash deals and foreign buyers that are not affected by this situation. However, we do have a level of buyers and sellers in the market that are strongly affected by this situation. This level is made up of mostly full-time residents or those looking to make Southwest Florida home by purchasing within the half million and below price range. "Normal lending" would definitely allow these buyers to take advantage of this price point to obtain housing.

That being said, let's not forget about the $25 billion government settlement that was reached with the five large banks who have been accused of abusive mortgage practices over the last few years. Several large groups of injured parties will receive some money, with parties in California getting the largest portion, but none will get huge amounts. The settlement will be spread out over three years,Â and additional claims and litigationÂ for some practices were not ruled out. The banks are Bank of America, JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc., with Bank of America paying almost half of the total settlement.

This settlement's impact onÂ the problemÂ can be seen asÂ encouraging; so far as it prevents or lessens the rate of foreclosures (distressed sales), it should help to keep inventoriesÂ from being overwhelmed by the supply of much cheaper properties. Also, the new rulesÂ that constrain lender abusesÂ might encourage new buyers, which would boost the sales side of our market and others.

However, as news of the settlementÂ and the problems that caused it is made more public, many buyers might wellÂ become more wary of signing the documents necessaryÂ for buying, and some of those may decide that renting is safer, after all. To those potential buyers, price will matter more, as it would be one additional - quite large - factor of concern.

While we may not see "normal lending" in Southwest Florida for a while, this doesn't mean you cannot purchase that primary, vacation or second home. Regardless of your situation, it's important that you educate yourself on home loans before shopping for a home and/or mortgage. Your real estate agent can help you find the right lender and assess your situation accurately. Don't try to go it alone! Get representation that you can trust and will work for your benefit and educate you on your choices.

If your not sure who to call, I'm confident that I can help you sell your property. Call me today at 239-498-7600 or email Michael@CoconutPointRealEstate.com

Pitfall Ahead: Why do real estate deals fall through?

We have all heard about real estate deals that fell apart, leaving everybody perplexed and stunned as to what went wrong. First-time homeowners are probably the most prone for having a real estate deal die merely due to the fact their financial plan has not yet been put through the gauntlet of mortgage loan brokers' demanding requirements. Some numbers have suggested that even after a buyer and seller come to terms on a sale, 3 out of 10 transactions fall apart. Why do real estate transactionsÂ fall apart at the last minute? The unfortunate answer is that there is no single reason why real estate transactions fall apart at the last minute. But one thing is sure, most transactions that fail to close are due to a problem that could have been identified and many times solved in the early stages of the deal.

There are many moving parts that affect the sale of a home.

1. The buyers and sellers must agree on a selling price.

2. The buyer must qualify and obtain financing unless paying cash.

3. The home must be inspected by a home inspector.

4. The home must be appraised to ensure sufficient value to qualify for financing unless it is a cash sale.

The single biggest reason that transactions don't close is due to the mortgage not going through. Why at the last minute does a buyer who was qualified, not qualify any more? There are some legitimate reasons why a mortgage will get declined at the last minute:

1. The home did not appraise. The appraisal is usually one of the last items received by the lender in the mortgage process and therefore this will many times be a last minute item. Most of the parties will agree that this is no one's fault. The appraised value is what it is. Many times the price can be negotiated down toÂ the appraised value and the deal can still close.

2. The buyer no longer qualifies. You may be asking, why would a buyer qualified a week or a month ago, not qualify now. Here are a couple ofÂ reasons:

a) A buyer lost or quit their job and income was reduced.
b) The buyers charged something on a credit card or made a large purchase such as a new car and no longer qualify due to high debt ratios. A good loan officer will counsel the buyers so that they don't make such a purchase, but these things still occur.

There are many other reasons why deals fall through at the last minute. Most of these are things that could have and should have been recognized by the lender before the transaction went too far. Here are some of those items:

1. Buyer's income was calculated incorrectly. Inexperienced loan officers will qualify a self employed buyer based on their most recent tax returns. If a buyer is self-employed or 100% commission normally their last two years tax returns are averaged to calculate income. The only time they are not averaged is if the income has gone down in the most recent year, then the most recent year's income is used. Lenders will alwaysÂ take the most conservative figure for income.

2. Buyer had unexplained large deposits on their bank account. Underwriters require that any large deposit other than normal payroll or income deposits be verified by a paper trail. These are things that should be caught as soon as the bank statements are received from the buyer. A good loan officer and processor will review the statements as soon as received and have the buyer document any large deposits.

3. Buyer wants to buy a 2nd home too close to their primary residence. A 2nd home must be a reasonable distance from a buyer's primary residence. It can never be in the same metropolitan area. This should have been brought up from the beginning. This transaction would have to be done as an investment home requiring a larger down payment and higher interest rate.

4. Buyer wants to buy a home when current home is under water. Lenders caught on to the buy and bail early in 2006. If a person wants to buy a new primary residence, their current home must have at least 25% equity. An appraisal will be required to verify the equity.

5. The property is a flipped property. Most lenders will not allow a loan on a home that has been owned for less than 90 days by the current owner.

6. Short Sales not being approved by the current lender. With so many sellers owing more than their home is worth, buyers' proposals need to be sanctioned by the lender (who will be receiving less than they are owed). Some of the offers are too low, but often, the lender isn't local and they really don't know what the property is worth today.

7. Bad pre-approvals from the lender. Today, loan officers who are not reviewing tax returns, analyzing bank statements, and asking for detailed explanations and documentation on credit blemishes, are truly hurting the customers. Issuing pre-approvals based on the representations of the customer is reckless and a cause for dismay later.

It is clear by the numbers that closing loans can difficult. But, there is no reason you need to get caught in the crosshairs of a deal going down the tubes. If you do your homework and your research, and most importantly, surround yourself with professionals who can get the job done right, you should come out with a successfully closed real estate transaction. With proper planning and integrity, many of the challenges can be dealt with early and successfully.

Does Southwest Florida have what it takes to be a top retirement spot?

While the name of this article may seem like a question with an obvious answer, it really requires some analysis. Currently, there are many markets that have become so affordable that retirees have many options when it comes to finding a spot to spend those post-work years. Not to mention, many retirees are very cautious in selecting a place to retire or not moving to a new place at all. This is largely due to the market falling in recent past years and many who have lost funds in their 401(k)s. However, those who are choosing to leave are considering the many choices available like Florida, California, Arizona, Texas, Alabama and the Carolinas. The point is what variables should retirees be looking at in making a good decision? And, more importantly, why choose Southwest Florida over many other markets that are now accessible?

Affordable Housing. There are many markets across the U.S. that have opened up to a new level of housing affordability. Markets like Phoenix and Miami are some examples of those markets. Southwest Florida, namely Naples, Bonita Springs, Estero, Fort Myers and Cape Coral markets are also on that list. Selling your current home and moving to a place where housing costs significantly less could give your nest egg a quick and significant boost. For homes under $300,000, the median home price in the Naples, Bonita Springs and Estero markets is $179,000. For homes over $300,000 in these areas, the median price is $550,000. The Paradise Coast is quite affordable these days. If you own a home in a pricey market like San Francisco or New York, you can cash out on that home and use that money to move to a less expensive place. About 125,000 people age 65 and older say they moved someplace new in 2011 in search of more affordable housing according to the Census Bureau.

Lower Taxes. Tax rates vary considerably by state, and moving to a place with lower taxes could increase your spending power. There are seven states with no personal income tax; one being our great state of Florida! Another major benefit of living in Florida is the Florida Homestead Exemption, which rules that permanent residents cannot be taxed on up to $50,000 of their primary home's assessed value. As part of the law, all Florida residents are eligible for a $25,000 exemption on the assessed value of their home. Those with an assessed value of more than $50,000 (i.e. $50,001 and up) are eligible for an additional $25,000 exemption, depending on the value of their home. The exemption can only be applied to non-school taxes, and the property must be worth at least $75,000 to receive the full $50,000 exemption amount. Those 65 and over could be eligible for an additional $50,000 exemption, making the concept of moving to the state for retirement that much sweeter. Florida has been generous in allowing residents to claim this exemption, applying it to homes, condos, co-ops and even some mobile homes. But to receive it, you must be a Florida resident, and the home must be your primary residence.

Better weather. Many retirees choose to spend the coldest winter months in a sunnier climate or permanently relocate to a place with better weather. Approximately 30,000 seniors moved in 2011 primarily to live in a better climate. You just can't get better weather than in Southwest Florida. According to stateofflorida.com, over 1,000 people per day move to the sunshine state and for good reason. Florida is known around the world for its balmy weather. The state's mild winters have made it a haven for retirees. Coastal areas also experience gentle breezes during the summer.

Recreation and culture. Throughout much of your life, your career dictates where you live. Retirement allows you the freedom to select a desirable place to live, whether than means surrounding yourself with golf courses, art galleries, water views, or hiking trails. Many retirees dream of seaside towns with plenty of golf. Look no further, as Southwest Florida boasts some of the best golf courses in the world! There are plenty of community activities for residents including year-round golf. Did you know that Naples Florida has the most golf courses per capita than anywhere else in the world? Add some additional world-class golf courses located in Bonita Springs and Estero, Florida and Southwest Florida has what it takes to be a primed retiree destination!

Job or volunteer opportunities. A part-time job or second career is increasingly becoming a part of the retirement years. If you plan to continue working, consider the health of the economy before moving to a new place, and look for cities with interesting part-time job or consulting opportunities. Many retirees also pursue volunteer work for the community and social benefits. Additionally, there are numerous volunteer opportunities within the Naples, Bonita Springs and Estero areas from animal care to children services to health.

Proximity to healthcare. Your healthcare needs are likely to increase as you age. Some 150,000 people changed residences for health reasons in 2011, typically after age 75. Any retirement spot you are considering should have health and elder-care facilities and doctors who specialize in taking care of older patients. Southwest Florida has some of the finest healthcare facilities in the nation. There are around 15 major hospitals in Naples, Bonita Springs and Estero, including Fort Myers. Should an emergency arise, you would not have to travel far. For routine care, medical centers and doctorâ€™s offices are plentiful.

Amenities for seniors. As you age, you may increasingly need assistance with errands, yard work, and household chores. Some cities have nonprofit aging-in-place communities that provide a range of services such as home maintenance, transportation, and meal services in exchange for an annual fee. You might also be interested in socializing at a senior center, using a senior citizen tuition waiver at a local college, or getting senior discounts from local retailers. There are no shortages of senior centers and aging-in-place communities in Southwest Florida.

Now more than ever, Southwest Florida is an ideal place to retire for a variety of good reasons. If you're considering Southwest Florida to be your retirement destination, you're going down the right path! However, before you jump in with both feet, you'll need to do your homework and learn about the area's real estate and what to expect when purchasing your retirement home. Be sure to find representation that knows the area well and can assist you in finding the best property for your lifestyle! Happy hunting!

Buyers in Southwest Florida are ready to get in the game

In no secret that many experts have predicted that 2012 is heading in a better direction for the Southwest Florida real estate market, but how are potential buyers, both local and non-local, really feeling about it? With the number of closed sales in Naples, Bonita Springs and Estero, Florida increasing by 5% in 2011 from 2012, the fourth consecutive year of increases, buyers are really starting to feel confident. Additionally, the comparison in renting versus owning seems to favor owning more and more with each passing month. The point is that whether you're a local looking to purchase a primary home or a seasonal resident looking to purchase that vacation or second home, now is the time to get in the game and it seems many buyers are ready!

First, when you compare the cost of owning a home to renting, you'll find that buying may soon make more sense. Paul Diggle, a housing economist at Capital Economics, performed a recent analysis that showed record-low mortgage rates (with 30-year fixed-rate mortgages available under 4 percent now), and a 15 percent rise in rents, which are making more consumers take a closer look at buying. The national median monthly mortgage payment of about $700 has fallen to about the level of a median monthly rent check. If mortgage rates keep falling and rents keep rising, the equation will tip even further toward owning. While the costs may be a bit higher in the Southwest Florida market, the ratio of rent versus a home mortgage is moving in the same direction.

Case in point: a buyer who purchases a median-priced home and stays there for at least seven years would likely come out aheadÂ by about $9,000 than if they chose to rent for those seven years according to Diggle. Diggle's calculations factor in rents continuing to rise 3 percent a year, and housing prices staying flat for the next two years before rising in 2014.

Much of the decision to buy a house still depends on your personal finances and preferences, your career or family life, or level of financial security of course, but with market conditions improving and inventory decreasing, it doesn't pay to wait much longer. And, if you're comparing just the cost of owning and renting, buying a house may soon be the better choice in Southwest Florida, especially for locals and our seasonal residents looking to put down roots.

Second, general speaking mortgage rates are at their lowest levels in decades. It's a combination which means affordability is up, so is now the right time to buy a home in Southwest Florida? You bet it is. What can be said with confidence is that now is a good time for buyers and investors to look at their local markets.

While you couldn't ask for better marketing conditions to buy a home in Southwest Florida now, if you're still not convinced, there are seven basic factors when deciding for yourself if now is the right time to buy.

1. Price. Home prices in Southwest Florida are the best they've been since before the the economic downturn, but don't expect them to stay there long. The available inventory in Naples, Bonita Springs and Estero has dropped 23% during the last 12 months (2011).

2. Mortgage Rates. There's no doubt that mortgage rates are low by historic standards. While there are stricter standards for obtaining that loan, it is not impossible for those who qualify. Lenders, however, will only make loans today that are fully documented. That means to get a mortgage, borrowers must be able to prove income and employment. The best strategy is to assemble application information in advance and to be pre-approved or pre-qualified before looking for a home.

3. Affordability. The combination of affordable home prices and historically-low mortgage rates means that affordability is strong -- buyers with a given income can purchase more house in most markets than just a few years ago.

4. Rental Rates. As we touched on before, renting versus buying has taken a turn in favor of buying. Additionally, reports that rental rates have increased consistently in the last few years in Southwest Florida.

5. Taxes. Property taxes and mortgage interest are generally deductible. Investors can also write-off depreciation and ownership costs. Real estate deductions lower tax costs and effectively increase affordability.

6. Ownership. All real estate comes with what are known as a "bundle of rights." There are different rights and responsibilities associated with "fee-simple" homes and condos. A homeowners association can also impact ownership costs and amenities. For instance, one single-family home that belongs to a homeowners association may have access to a community pool while an identical house outside the association does not. Your real estate agent can explain the differences.

7. Personal Preferences. We each have different likes and dislikes that drive our choices. One person wants a condo in downtown Naples while someone else wants a resort community in Estero or Bonita Springs.

One thing I haven't mentioned is that are some things in real estate you just can't measure, like the sense of joy and satisfaction that comes from owning a home. While insignificant as they may seem when we talk a lot about investments and money, etc., it is still an important factor for many buyers.

Lastly, when youâ€™re ready to buy, do it right. Be sure to obtain the right representation; someone who will look out for your needs and your interests when it comes to buying your home.

Are you ready to buy a home?

Inventory is shrinking and mortgage rates are low. There has never been a better time to purchase a home in Southwest Florida. Now that you've decided to make a purchase, there are some things you need to do to ensure you make the right purchase, as well as prepare and ultimately get through the home buying process successfully. And if you're a first-time buyer, buying a home can be a complicated process and daunting process. The point is that you need to get your house in order now before you start shopping. Here's what you need to do, and when.

As soon as possible

Get your credit reports. Errors on your reports can force you to pay a higher interest rate on your mortgage or even diminish your chances of getting a loan. You can get free copies of your reports from the three major credit bureaus Equifax, Experian and TransUnion at AnnualCreditReport.com. Look for accounts that aren't yours, collection accounts for debts you don't owe and negative marks (other than bankruptcy) that are older than seven years.

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Deal with your debt. Most people needn't pay off their student loans, auto loans or other generally low-rate debt before getting a mortgage. What you want to eradicate is "toxic" debt: credit-card balances and payday loans. These are signs you're living beyond your means. If you don't get your overspending problem fixed before you buy a home, your problemsÂ likelyÂ will get worse because homeownership typically involves plenty of big costs (property taxes, insurance, maintenance, repairs, and improvements, decorating). Get a hold of this situation before you house shop.

Put your bills on automatic. A single 30-day late payment can knock 100 points off your score, and it can take many, many months to recover. Make sure every bill gets paid on time. If you don't have a reliable bill-paying system, consider using automatic debits, so payments come directly from your checking account, or an online bill-payment system's recurring-payment feature.

6 months out

Sort through your mortgage options. It's up to you to understand the risks of the different types of mortgages and to select the right one for your family. My 2 cents: Stick with traditional, fixed-rate mortgages. If you can't commit to a 30-year version, at least use a hybrid loan with a rate that's fixed for as long as you plan to own the home.

Research all the costs of owning a home. You'll have to pay property taxes and insurance on the home. There may be homeowners or condo-association fees as well. You may face higher utility bills, and you'll take on maintenance and repair costs as well. Decorating your new house can cost a pile of money as well.

Adjust your saving strategies. What you've learned so far may inspire you to boost your savings. A bigger down payment, for example, can result in a larger home or a lower mortgage payment. Or you may simply want to build up your emergency fund so unexpected home expenses don'' knock your finances off the rails.

3 months out

Reduce your credit utilization. The FICO scoring formula is sensitive to how much of your available limits you're using on your credit cards and other revolving lines of credit. Simply put, the less, the better. It doesn't matter if you pay your balances in full every month; the figure the scoring formula typically uses is the balance that shows on your most recent statement. Try to keep that balance below 30%, or even lower.

Don't open or close any accounts. Until the mortgage process is completed and you've moved into your new home, continue to avoid actions that could potentially harm your credit, such as opening credit accounts or closing old ones.

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2 months out

Get an idea of the mortgage rate you can expect. Order a fresh set of FICO credit scores (don't worry, checking your scores doesn't ding them) and talk to some mortgage lenders about what rates you might qualify for. Your real estate agent can recommend a good mortgage lender. Don't apply yet or give permission for your credit to be pulled; you just want to get a feel for what you can expect.

Understand the effect of mortgage-shopping on your score. You want to get the best rate and terms possible, which means you'll need to shop around, but how does that affect your credit score? Every time you give a lender permission to check your credit, a "hard inquiry" appears on your credit report, and that can ding your score a bit. So you want to do your serious mortgage shopping in a fairly concentrated period of time, typically after your offer on the home you want is accepted.

Get approved for a mortgage ahead of time. Pre-approval, in which a lender gives a commitment to make you a loan, is different and more valuable to sellers than pre-qualification, which merely gives you an idea of the size of the mortgage you might afford without making any commitments.

Begin researching neighborhoods and look for a REALTOR®. This is probably one of the most important steps in the process. Why? The difference between a good agent and a very good agent can mean not only finding the home of your dreams, but getting it at the right price and in the right neighborhood. When seeking an agent, do your homework. Get referrals and interview just like you would when making a professional hiring decision. Look at things like overall knowledge in the Southwest Florida market and the agent's track record with successful transactions. Does the agent have access to up-to-date marketing resources and can the agent close a deal in a timely manner? Finding the right agent will make your process much easier.

Once you've found your home and your offer is accepted…

Shop for a mortgage. There are thousands available, and sorting through the possibilities can be overwhelming. You may want to include some of the biggest national mortgage lenders, local lenders and online brokers. You'll need to move fairly quickly to secure the loan, because the full approval process typically takes four to six weeks.

Arrange for an appraisal, a home inspection and a walk-through. The appraisal is required for your loan to be approved. An inspection isn't necessarily required, but don't skip this essential step, which can alert you to serious problems before the deal closes. The walk-through is usually done within 24 hours of the deal closing, so you can make sure that the home sellers have performed any agreed-upon repairs and the place is in move-in condition.

Get homeowners insurance. Mortgage lenders require this coverage, and you'll need to prove you have it at closing.

Confirm how much money you'll need at closing. "Closing" is when you sign all the paperwork and pay agreed-upon amounts, which can include your down payment and your share of legal fees, paperwork costs, property taxes and title insurance.

The home buying process does not have to be a daunting one if you're prepared! And, remember… finding the best real estate agent can help the process immensely! Happy shopping!

If your not sure who to call, I'm confident that I can help you sell your property. Call me today at 239-498-7600 or email Michael@CoconutPointRealEstate.com

Buyers in Southwest Florida are ready to get in the game

Lastly, when you're ready to buy, do it right. Be sure to obtain the right representation; someone who will look out for your needs and your interests when it comes to buying your home.

Looking to 2012: What will be the real estate trends?

Predicting trends during these market conditions is not easy. However, we've seems some positive signs that point to a successful real estate season in 2012. There are also many factors that indicate that now is the time to buy in Southwest Florida. Based on some of these factors, what can we predict for 2012 in our market? The point is that while no one can be 100% sure, not even the experts, we can still take what we now combined with historical facts and trends and make some predications that are definitely worth considering.

Based on 2011 history, here are five predications for your consideration:

•Buyers will return to the Southwest Florida market. In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers will realize that now is the time to buy. Add historically low mortgage rates and a strong desire to own versus renting, and you've got this prediction "in the bag" so to speak.

•Housing Inventory will continue to decrease. The inventory of homes in Bonita Springs, Estero and Naples, Florida has continued to decrease consecutively since 2008. 2011 inventory showed a 23% decrease over 2010. The biggest declines showed within single-family homes in the price category of $250,000 and below. Those units dropped by 814 between 2011 and 2010. Homes priced between $500-700,000 are 117 units less than 2010.

•Sale activity overall will increase in 2012. In 2011, all price ranges showed increases over 2010 and we're looking for the same result in 2012. Sales rose consecutively each year since 2006 and in 2011, sales are just 740 units short of sales levels in 2005, prior to the downturn. Foreclosures and short sales decreased as a percentage in the overall market and remaining units in the category are priced below $250,000. Sales for units over $1,000,000 have increased consecutively since 2009, showing an 11% increase in 2011 over 2010.

• Mortgage rates will remain a driving factor in homes sales. As we already know, the Federal Reserve has already maintained that rates will stay low until 2014. This has been a major factor in deciding to buy over the last year and will continue into 2012. Other interesting statistics from www.realestateinvestordaily.com include:

- Younger buyers and first-time buyers are leaving the market. 37% of home buyers were first-time buyers, a drop from 50% in 2010. A typical buyer is now 45 years old, a jump from 39 years old in 2010.

- To attract buyers, "41% of sellers offered incentives such as home warranty policies or financial assistance with closing costs." The typical home sold at 95% of the listing price and 61% reported they reduced the asking price at least once.

- Single women are also leaving the home buying market dropping to "the lowest market share since 2004" at 18%, while married couples purchasing homes have increased to 64%, "the highest share since 2001."

- Referrals from families or friends account for just 41% of an agent's customer base. Once a buyer selects you as their agent, you'll have a loyal client because "nearly nine in ten buyers would use their agent again or recommend to others."

- Financial aspects of homeownership are important, but they do not stand alone as the primary motivators for the purchase of a home. The top three factors that influence their home purchase are quality of the neighborhood, convenience to job, and overall affordability.

• Foreign Buyers will continue to take advantage of Southwest Florida Prices. It's no secret that foreigners have been purchasing second homes here in Florida and throughout the Southwest Florida as well. How do foreign home buyers impact our market? According to recent reports, International buyers are expected to buy even more in 2012. Florida has been the front-runner in International sales since 2009. Condos continue to be foreign buyers' residence of choice with condominium sales accounting for more than 70 percent of purchases. International buyers are largely cash buyers and buy homes at a higher price point. Recent statistics show that 1 in 10 foreign home buyers purchase in the Southwest Florida area. But, they aren't the only buyers attracted to our sunshine state. As a result, home prices have risen while inventory has fallen. Additionally, by now you've probably heard the term "buy a home, get a visa". Another possible boost in the International home buyers' market is the foreign home buyer visa; just spendÂ $500,000 in residential real estate and receive a visa to live in the U.S.

Nationally speaking, we aren't the only ones who think 2012 holds improvement for many markets in the U.S. There is a growing belief among many experts that 2012 will be the year housing turns the corner and starts heading in a more positive direction. Of course there will always be the naysayers who say we are too optimistic, so it makes sense to share the beliefs of other credible organizations on this point:

Washington Post: "Housing Market and Economy Showing Encouraging Signs."

The Wall Street Journal: "From Bottom Up, Signs of Housing Recovery"

USA Today: "Housing Outlook is More Upbeat"

CoreLogic: "CoreLogic's chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner."

Freddie Mac: "With the New Year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery."

Fannie Mae: "The housing sector will likely take incremental steps forward in 2012 …according to economists at Fannie Mae."

All in all, I think weâ€™re in for an interesting and fruitful 2012 for the Southwest Florida Real Estate market. If you agree and need some assistance, be sure to find a Realtor that has an abundance of knowledge in our market and knows how to read the signs!

If your not sure who to call, I'm confident that I can help you sell your property. Call me today at 239-498-7600 or email Michael@CoconutPointRealEstate.com

Buying or Selling in 2012? Here's what you need to know.

Dave and Chelsea McNab, originally from Ann Arbor, Michigan, decided to finally purchase their second home in Southwest Florida. After several months of searching for a home, the couple just made an offer on a single-family home in Estero, Florida. Dave McNab doesn't seem particularly anxious about diving headfirst into the areaâ€™s housing market. "I think it'll probably appreciate, but it's anybody's game," he said. "It'll be interesting to see what happens."

Interesting indeed! Here we are in 2012 - six years after our housing market began its downward slide, and zero years into a whole-hearted, full-fledged recovery. Not to worry though. The point is there are definite signs of recovery in Southwest Florida and many of the issues and conditions facing those who enter the real estate market this year can be assessed and even prepared for.

Here's a rough guide to what home buyers and sellers in Southwest Florida should take note of in 2012.

The year things start to get better?

On the national scene, analysts are hopeful that this is the year home prices finally begin inching upward again. Lawrence Yun, chief economist for the National Association of Realtors, predicts that low interest rates and rising rents will lead to a 5 percent boost in home sales, with prices increasing by about 2 percent. And new housing starts should be 15 percent greater than last year, said David Crowe of the National Association of Home Builders. But according to RealtyTrac, foreclosures are also slated to rise, which could result in a flood of cheap homes on the market that could depress prices for a little longer.

However, the general consensuses is that housing prices are higher now than they were a year ago and inventory is lean, so it looks like we should be poised for some recovery in the Southwest Florida housing market.

FHA vs. Fannie and Freddie: Pros and cons

One of the big housing policy issues of 2011 was the lowered limit on mortgages backed by Fannie Mae and Freddie Mac in October. Congress had voted to decrease the ceiling of these loans, which are eligible for lower interest rates, from $729,750 to $625,500 â€” a crucial difference in a market like Southwest Florida. But the upper level was restored by Congress in November, after an intense lobbying effort from the housing industry. The loan limits are now back up to $729,750, but now it's the Federal Housing Administration, rather than Fannie Mae or Freddie Mac, that'll be behind those loans. Does that matter? Yes, it is a benefit, in some ways, to the high mortgage balance borrower because loans backed by FHA require a much lower down payment than others.

Lower down payment, lower interest rates â€” it sounds like a win-win for the buyer. But FHA has some disadvantages, too, particularly the higher price of its mortgage insurance premiums, which can cost up to 1 percent of the loan annually. Borrowers should closely work out the details with their lenders to determine whether an FHA loan really is the best deal for them.

Buyer beware

In the past, if was commonplace for the seller to provide a warranty that protected the home's appliances, plumbing, electrical systems, and heating and air conditioning were all in good working condition. If those elements turned out to be defective, the seller could be held liable. If a home is sold in "as-is" condition, there is no guarantee about the state of anything in the home. If a pre-sale inspection fails to catch an on-its-last-legs boiler, for example, that's simply the home buyerâ€™s bad luck.

Those who are about to settle on a home do have a few options. One is to hire a buyer's agent who will carefully examine the property's conditions. Even better, a buyer could insert an inspection contingency clause that provides them with the right to conduct a home inspection, and then give the seller a list of those items that need repairing or replacing. The seller must then make changes or reduce the price.

Mixed policy issues that may or may not occur this year

There are several other potential policy changes afoot that could seriously affect the Southwest Florida market. One is elimination of the mortgage interest deduction, an action that has a swath of small-government fans behind it. However, in an election year, we will probably not see that happen anywhere. But possibly around the middle of this year, the Consumer Financial Protection Bureau will release a streamlined version of closing documents that should be easier for buyers and sellers to read and understand; the agency is currently testing new versions to determine what works.

The big elephant: Pending budget cuts

But the big elephant in the room is government spending. The debt ceiling talks this summer between President Obama and Congress resulted in hundreds of billions of dollars in cuts to federal spending that are already on the books â€” $460 billion to the Defense Department alone over the next 10 years. They won't take effect until 2013, but that budget will be out early this year.

In a market like Southwest Florida, cutbacks play a significant role in home buyers' mentalities. People don't buy houses if they feel threatened; they want to stay in place until they feel okay to buy. Homes at the lower end of the market â€” rentals, condos and townhouses â€” probably won't be particularly affected, but bigger houses may face a standstill in the market.

Of course, there is still no denying the activity we are seeing in the market like a jump in pending home sales as well as decreased inventory. Interest rates will continue to be favorable, thus making the purchasing decision even easier. The best thing you can do as a buyer or seller is to retain the best representation you can get. You need to find a Realtor who understand the Southwest Florida market and can help you navigate through local changes as well as national changes that may affect our market.

If your not sure who to call, I'm confident that I can help you sell your property. Call me today at 239-498-7600 or email Michael@CoconutPointRealEstate.com

Pending Home Sales: How does affect the Homebuyer or seller in Southwest Florida?

At this time, I would like to refer back to my last article citing the late Frank D'Alessandro's quotes regarding development in Lee and Collier Counties. At the time of my article development, fact-checking was performed on the information's current validity.Â Unfortunately, it was missed that Mr. D'Alessandro was no longer with us. While every effort is made to fact-check accurately, sometimes information is missed due to theÂ volume of information available to review. For this, I apologize, as it was indeed an error and not my intention to disrespect or tarnish the memory of Mr. D'Allesandro. Thank you for your understanding on the matter.

While we definitely like to keep an eye on our own market here in Southwest Florida, we also need to pay attention to what is going on nationally. We know our market is unique, BUT there is activity happening on a national level that will give us clues about our own market. The point is we should be paying attention to national activity as well as local activity, so we can ascertain the full picture about Southwest Florida.

Once such piece of activity of particular interest is Pending Home Sales. After falling for three straight months, the index that tracks the number of U.S. home buyers signing contracts to purchase existing homes took a high leap in October 2011, reaching the highest level of 2011. The National Association of Realtors' (Realtor.org) reported that the seasonally adjusted index for pending sales of existing homes increased 10.4% on a monthly basis to 93.3, the highest reading since November 2010. October's results were more than 9% above the same month in 2010.

Additionally, pending sales rose in three out of four U.S. regions. The biggest increase of 24.1% was in the Midwest. They rose 17.7% in the Northeast and 8.6% in the South and fell 0.3% in the West. Sales of both new and existing homes have been running higher than a year earlier. Prices, however, still remain weak nationally, given the overall uncertainty about high unemployment and the difficulty of getting home loans.

The increase still came despite warnings by other housing industry groups concerned about a decline in the maximum size of loans that can be backed by mortgage giants Fannie Mae, Freddie Mac and the Federal Housing Administration. Those limits fell on Oct. 1, though Congress later voted to increase the limits for FHA, which guarantees loans to buyers with down payments as low as 3.5%.

Additionally, three industry watchers had this to say:

Steven Wood, chief economist, Insight Economics: "This report suggests that home re-sales should be stronger over the next couple of months but at a level that is still fairly subdued. Pending homes sales have fluctuated within a relatively narrow range over the past year at an average level that is still relatively subdued."

Michael Rehaut, builder analyst, J.P. Morgan: "We view today's data point as more of an outlier when contrasted with several other major indicators of housing demand as reported over the last two weeks, which have demonstrated changes in the range of 1-7%… Hence, we continue to view demand overall as remaining stable to only slightly improving."

Ian Shepherdson, chief U.S. economist, High Frequency Economics: "The index dropped by a total of 7% over the previous three months, so this is mostly a rebound rather than a surge from a steady trend, but it is welcome nonetheless. It also is consistent with the recent strengthening in homebuilder sentiment and the modest pick-up in mortgage applications. In short, something seems to be stirring in the housing market, though we would certainly hesitate before calling a definitive start of a recovery."

Millan Mullraine, senior U.S. macro strategist, TD Securities: "Given that pending sales capture the initial signing agreement for the purchase of a home, it is a very good predictor of existing home sales one month ahead."

What does this mean for our market?

First, let's review the facts. A sale is considered pending when the contract has been signed but the transaction hasn't closed. Pending sales typically close within one or two months of signing. A reading of 100 is considered healthy and is equal to the average level of activity in 2001.

So in our market, the question is how many of those pending homes sales are based on financing? Pending home sales go up, but actual closings may be questionable. Some of these closings collapse because buyers can't get financing. However, in Southwest Florida we are seeing an increased percentage of cash deals in the $500K and below pricing point, as well as the luxury market; both from investors and buyers looking for that vacation or retirement home. Since the majority of homes sold here are cash, the likely hood of those deals staying together increases in our market.

Another factor contributing to the pending home sales in the Southwest Florida market are rental rates are increasing. Historically, there's typically been a strong correlation between rising rental rates and rising home prices. However, that correlation has suffered in the recent years because of the downturn in the housing market. But with rental rates now well into long-term gains here in Southwest Florida, pressure is mounting for renters to jump to home ownership if only because it's becoming cheaper to buy than to rent in a lot of markets and at a lot of price points.

Overall, pending home sales nationally is a good sign for our market and with cash deals and rising rental costs, Southwest Florida will experience additional sales activity in 2012 as the market begins to recover nicely. If you want to sell your Southwest Florida home or buy a home in the market, be sure to have all the facts so you know your investment is sound. You'll need a Realtor® that knows the market and can make accurate assessments based on his/her local and national knowledge. Find the RIGHT Realtor®…you'll be glad you did!

Is your real estate agent a traditional agent or an Expert Advisor?

Yes, there is a difference! In today's market, we're seeing changes across almost every industry. And with those changes come those "traditionalists" who refuse to move and grow with the times. Those individuals usually find themselves becoming unsuccessful and then eventually out of the industry or jobless. The travel, hardware, and mom-and-pop coffee shops are great industry examples of this shift. Well, it is no different in the real estate industry, especially in Southwest Florida. Real Estate Agents with better, stronger more diverse offerings are highly successful in selling and buying homes in the Southwest Florida market and those agents who do not have those offerings are on the fast-track to becoming ineffective. The point is as a home buyer or seller, you need to ensure the agent you hire is an Expert Advisor and not a traditionalist! While you may think it is easy to know the difference, it may not be. Many agents are still flying under the guise as effective agents, but have not updated their marketing or negotiating strategies in years. While there are many effective agents in Southwest Florida, you need to know the signs of a good one so you can hire the best agent to buy or sell your home.

Here are some tips in looking for that "Expert Advisor Agent" (EAA). These are the qualities your real estate agent should have.

EAAs don't keep ideas to themselves. They attend conferences, meetings and continually strive to educate themselves on the market and how better to serve you. Don't be afraid to ask a potential agent what he/she does to further educate themselves in their industry. If you get a deer-in-the-headlights look, you may want to cut the interview short!

Your EAA should be a market expert. As part of their market analysis, a good EAA will study as many as 27 outside influencers including economic indicators, interest rates, seasonal market changes, price ranges, inventory of distresses sales properties before completing the analysis. Your EAA should ensure no stone is unturned before providing a price strategy and marketing recommendation. If you're not seeing this kind of in-depth information, better find a new agent.

EAAs understand the need to be different - not just how they conduct business but also how they get homes sold. EAAs know that proper differentiation leads to seller getting more for their home. This should be reflected in the EAAs branding. Do their materials look like every other agents?

Here is a big one...your EAA must be an expert marketer! In the Southwest Florida real estate market, the best marketer will sell your home. The agents who are still relying on the 3-pronged approach of the yard sign, the MLS listing, and the newspaper/magazine ad do not fall into this category. An EAA will be using those means and additional tools such as social media platforms, a website, and other internet forms of marketing a home. If you agent is not utilizing social media in addition to other marketing strategies, you've got the wrong agent! Additionally, if your agent is not currently branding him/herself online (i.e. Facebook, LinkedIn, etc.) you want to find a new agent.

Negotiation from a position of strength is a trademark of the EAA. They understand both the art and science of negotiation at their deepest levels. In fact, many EAAs have the designation of CNE, which is Certified Negotiation Expert - definitely a plus! Because they're expert negotiators, EAAs know how to use pre-emptive negotiation strategies to ensure their sellers get more money. They also how to employ a straight-line, results-based strategy that gets the best results without a lot of jockeying for position in the negotiation process. Their expertise also helps keep more deals together, reduces acrimony between buyer and seller and keeps the home inspection "Deal Killer" from rearing its ugly head in almost every instance.

Treating their own buyers well is also a priority of EAAs, so they optimize their business to ensure that buyer leads are handled quickly and professionall. This strategy Is vitally important when you take into consideration that the average response time to a buyer inquiry by traditional agents is somewhere in the 16-hour range. If your agent does not promptly return calls or took longer than 4 hours to return your initial call, you may want to take that as a sign.

In the Southwest Florida real estate market, it's not prudent to use an agent that has not changed with the marketplace. You need to get the most for your money when buying a home or, if you're selling, you'll want to get the best price possible for your home. You won't be able to achieve this without a real estate agent that is not an Expert Advisor. This information should help you find that Expert Advisor and when you do, you'll be glad you did because your Expert Agent will not only cover your back, but will get the job done right!

Overvaluing your home's worth can cost you later

By D. Michael Burke

Did you know that about 76 percent of home owners believe their home is worth more than their agent's recommended listing price? That figure is UP from 73 percent last year, according to a new survey conducted by HomeGain of real estate professionals and home owners.Â Additionally, 68 percent of home buyers say homes are overpriced, with 32 percent saying homes are overpriced by more than 10 percent (RISMedia.com). Unfortunately, home buyers and sellers continue to remain in the dark about home valuations with the majority of home owners thinking their homes are worth more than their agents and the market are telling them. The gap between seller's expectations and what agents recommend is widening. The point is overvaluing your home when you're getting ready to list or already on the market will definitely cost you later.

In a market such as Southwest Florida, the risk of an overpriced home isn't simply that you won't get the asking price--there is also a risk of turning off potential buyers and brokers, since an unreasonable price could stigmatize the property. The first flurry of activity occurs in the first month a property hits the market. After a home sits on the market for six months or so, it could become a stale listing that gets filed in the junk drawer of forgotten and overlooked properties.

Here are 5 signs that your home is overpriced:

• Your home is priced well above neighboring properties. The first thing agents do before they recommend a price to a seller is they look at the sales prices of the last three sales of comparable-sized homes in the neighborhood. You can conduct your own research to determine a reasonable price before you hear estimates from brokers. Do a quick search online to see what neighborhood homes are selling for, and there are some tools that can help determine a roundabout value of your home based on your zip code and other factors.

• After a couple months, you still haven't received an offer. Don't panic just yet. This isn't true for all homes, (it's not uncommon for luxury homes, for example, to stay on the market for months) but there should be a flurry of showings and interest in the first four to six weeks the home is on the market if it's priced properly. Although one assumes that overeager buyers are indicative that the price is low, competitive bids are more likely indicative of a reasonably priced home.

• You spoke to several agents before you hired the one who recommended the highest price for your home. Agents seldom want to take a property that is overpriced, simply for the fact that the chances of selling it are slim. You should speak with several agents before choosing one to represent you, but if you consistently hear a ballpark price that seems low to you, the price may be right. Agents (or should be) intimately familiar with most real estate activities in their market, and they should have the best idea of how a home should be priced.

• There aren't any scheduled showings. Immediately after the home hits the market, there should be at least a few appointments for showings. If there aren't, it might indicate that local brokers think the home is overpriced and therefore aren't showing it to their clients. Agents suggest that after a month, if there is very limited interest in the home, it's not too late to reduce the price, but it's important to act quick in order to sustain some interest.

• The home is priced for expensive, unique amenities that may not hold broad appeal. Your family may have enjoyed endless hours of fun in your indoor tennis court, but not everyone loves tennis as much as your family does. The more customized the home's amenities, the less likely the seller is to see their value in the sales price.

Fortunately, there are two remedies to this situation. The first remedy is to trust your real estate agent. He or she knows the market and can guide you to the best price for your home. Be prepared to hear reasoning from your agent as to why those platinum faucets are not going to be much of an advantage in pricing your home and accept the recommendation information that is given to you. Rest assured, your agent wants to sell the home as much as you do and knows the best strategy in which to succeed in doing that.

On that note, the second remedy is that if you don't trust your real estate agent, you need to find one that you CAN trust. While there are many good real estate agents in Southwest Florida, the agent who has a finger on the pulse of the market at all times is your best bet. That agent will have experience in your neighborhood and know the sales data well. That agent will also have a tried and true marketing strategy and will know exactly how to price your home and then market it. And, this agent will also act fast if changes need to be made. Additionally that agent will provide you with an in-depth market analysis, which compares your house to other recently sold homes in your area. The recently sold homes will be similar to yours in terms of square footage, number of bedrooms, bathrooms, lot size, and amenities. The analysis will include the listing price, the sale price, and number of days that the house was on the market. If you hire the right agent, this coupled with his/her market knowledge and experience should be enough to price your home right. However, if you're questioning it, you can get a professional appraisal which will cost $3-400 dollars.

The single most important step in the process of selling your home is pricing it correctly. If you overvalue your home, it simply will not sell and you'll have wasted valuable time on the market with no activity. If the house is undervalued, you leave money on the table. A house that is priced correctly should sell in the Southwest Florida Market.

If your not sure who to call, I'm confident that I can help you sell your property. Call me today at 239-498-7600 or email Michael@CoconutPointRealEstate.com

Looking to purchase your second home in Southwest Florida? Here's what you need to know.

By D. Michael Burke

If you've been visiting Southwest Florida for a while now, you're probably seriously considering purchasing a vacation or winter home here. Why not? The mortgage rates are great; the deals are pretty good; you really have nothing to lose. Not only can you look forward to having a place to relax, you also can garner some tax benefits for your second home on the beach or in your favorite golf course community. The point is that buying your vacation or winter home in Southwest Florida can get you tax breaks as well as a great second home.

You can use several tax breaks:

Mortgage interest. If you use the place as a second home -- rather than renting it out as a business property -- interest on the mortgage is deductible just as interest on the mortgage on your first home is. You can write off 100% of the interest you pay on up to $1.1 million of debt secured by your first and second homes and used to acquire or improve the properties. (That's a total of $1.1 million of debt, not $1.1 million on each home.) The rules that apply if you rent the place out are discussed later.

Property taxes. You can deduct property taxes on your second home, too. In fact, unlike the mortgage interest rule, you can deduct property taxes paid on any number of homes you own.

If you rent the home… Many second-home buyers rent their property part of the year to get others to help pay the bills. Very different tax rules apply depending on the breakdown between personal and rental use. If you rent the place out for 14 or fewer days during the year, you can pocket the cash tax-free. Even if you're charging $10,000 a week, the IRS doesn't want to hear about it. The house is considered a personal residence, so you deduct mortgage interest and property taxes just as you do for your principal home.

Rent for more than 14 days, though, and you must report all rental income. You also get to deduct rental expenses, and that gets complicated because you need to allocate costs between the time the property is used for personal purposes and the time it is rented.

If you and your family use a vacation home for 30 days during the year and it's rented for 120 days, 80% (120 divided by 150) of your mortgage interest and property taxes, insurance premiums, utilities and other costs would be rental expenses. The entire amount you pay a property manager would be deductible, too. And you could claim depreciation deductions based on 80% of the value of the house. If a house is worth $200,000 (not counting the value of the land) and you're depreciating 80%, a full year's depreciation deduction would be $5,800. You can always deduct expenses up to the level of rental income you report. But what if costs exceed what you take in? Whether a loss can shelter other income depends on two things: how much you use the property yourself and how high your income is.

If you use the place more than 14 days or more than 10% of the number of days it is rented -- whichever is more -- it is considered a personal residence and the loss can't be deducted. (But because it is a personal residence, the interest that doesn't count as a rental expense -- 20% in our example -- can be deducted as a personal expense.)

If you limit personal use to 14 days or 10%, the vacation home is considered a business and up to $25,000 in losses might be deductible each year. That's why lots of vacation homeowners hold down leisure use and spend lots of time "maintaining" the property. Fix-up days don't count as personal use. The tax savings from the loss (up to $7,000 a year if you're in the 28% tax bracket) help pay for the vacation home. Unfortunately, holding down personal use means forfeiting the write-off for the portion of mortgage interest that fails to qualify as either a rental or personal-residence expense.

We say such losses might be deductible because real estate losses are considered "passive losses" by the tax law. And, passive losses are generally not deductible. But, there's an exception that might protect you. If your adjusted gross income (AGI) is less than $100,000, up to $25,000 of such losses can be deducted each year to offset income such as your salary. (AGI is basically income before subtracting your exemptions and deductions.) As income rises between $100,000 and $150,000, however, that $25,000 allowance disappears. Passive losses you can't deduct can be stored up and used to offset taxable profit when you ultimately sell the vacation house.

These are just some of the tax break options for you as a second home owner, but I recommend you consult your CPA for additional information. However, if you've made the decision to purchase your second home in Southwest Florida, you'll definitely want to consult a local REALTORÂ® who knows the market and can help you get the most for your money. Whether you're looking for a place by the beach, within a natural preserve, or close to your favorite golf course, there are great properties here in Southwest Florida that will more than fulfill your desires in a winter or vacation home in Southwest Florida.

If your not sure who to call, I'm confident that I can help you sell your property. Call me today at 239-498-7600 or email Michael@CoconutPointRealEstate.com

How to choose the best lender and get the right loan.

By D. Michael Burke

There is no arguing that now is great time to buy a home in Southwest Florida. You've done everything to prepare; you have a down payment, you've selected the right agent and you're ready to get pre-approval on a home loan. The next step is to select a lender.

While your agent can help you select a lender, you want to be comfortable with that selection. You should know yourself what to look for in a lender and you should know what to recognize as a red flag. The point is that you want to be sure youâ€™re working with the right lender. Here are some things to consider…

What type of company is it?

There are mortgage brokers, mortgage bankers and banks/credit unions. Mortgage brokers have been hamstrung by many of the recent regulatory changes and typically lack the actual ability to approve and/or lock a loan. Banks are usually limited in program choices and hamstrung by tighter underwriting. Mortgage bankers have the financial stability and direct lending capability of the bank coupled with the wide product menu and expertise of the mortgage broker.

How does the company operate?

Many people are dismayed when they find out where their loan is processed or underwritten… or where the appraiser is from. It is important to work with a company (and their affiliates) who understand the nuances of your local market. Asking the questions up front can save you headaches down the road.

What about the individual loan officer?

Your relationship with your LO (and their processor) becomes the most important ingredient to a successful transaction. How well do they educate you about the process, the requirements… the factors that determine your approval or the interest rate you will get? Many LOs are "order takers". Others are weak in follow up or communication. This is difficult to determine on your own which is why the referral from another person who used them or your real estate agent has far more value than most people know (until it's too late).

Too many people stay focused on quoted rates and fees and neglect to see the whole picture of what is needed from a lender. Look for great communication, superior information and education, understanding of the local market and someone who looks at your application as something more than a number. Be prepared to pay a little more to get a better experience (even though it might not cost you any more)… in the long run, lowering stress can be more important.

So, you've found the right lender, now what?

If you've been preparing yourself to purchase a home, you probably know that underwriting guidelines for lenders become more stringent. Let's examine what a good mortgage application looks like. There are a few items you should be aware to help get your loans approved (with the best possible terms), and, at the same time, lessen some of the stress that goes along with the mortgage process.

Income documents

Most lenders want to see a full month of paystubs and two years' complete Federal Tax Returns. Assembling them ahead of time and holding on to every paystub you get is a good idea even before you find a home and/or submit your mortgage application because it will save you time later. Moreover, looking at those documents and being prepared to explain any deductions that show up is crucial. Child support, alimony, garnishments, and Unreimbursed Employee Expenses are often crippling factors that, if explained and dealt with upfront, can make your loan approval smoother.

Asset documents

Most lenders will scour your bank accounts for the two months prior to going to contract. They are looking for large deposits because large deposits can signal a new loan that wouldn't show up on your credit report yet. What's a "large deposit"? Typically, any deposit that would represent more than your income can support. If you make $5000 a month, after taxes you likely net $3800 (or $1900 a bi-weekly pay period). Therefore, deposits in excess of that will need to be explained and documented. Sold a motorcycle? Have a paid receipt and motor vehicle documents in place.Â Received a gift? You will need a Gift Affidavit, proof of the donor's ability and transfer of the funds. Any and all questions should be discussed with your loan officer.

Credit Score Optimization

Do your best to curtail your use of credit as it relates to your available credit lines. Target a cap of 30% of usage of available lines to get the best scores. Do NOT cancel credit cards. That will lower your amount of available credit, thereby raising your percentage of usage. That will damage your score. Do NOT shop for a car, explore life insurance, apply for a new credit card or increase the limits on your current cards because the running of your credit by people in other industries will also lower your credit score. Most importantly, don't do anything that will require having your credit run without first discussing it with a mortgage professional who knows the impact it could have.

Appraisal Concerns

It's unlikely you will make an offer to purchase without checking out comparable home sales. It's also likely you received that type of data from the real estate agent you are working with. Make sure your agent prepares the same information for the appraiser. Data about similar sales, similar homes currently on the market and maybe even cost estimates for any repairs or improvements anticipated can preempt future problems with appraised values and conditions. It is recommended that you hold onto copies of everything financial, think before allowing your credit to be run and work with an agent and loan officer who can use their experience to put your loan application in its best possible light… as soon as you start thinking about buying a home. Your real estate agent is also a good source of information in helping you select a lender. Your agent should be aware of all of this information and more. However, selecting the right people in every area will help make your buying transaction painless and smooth.

Is recovery near? Here are 5 signs that say it is

By D. Michael Burke

Recently, Inman News reported an interview with David Stevens, president and CEO of the Mortgage Bankers Association, is bullish on homeownership. Stevens -- a former Long & Foster Cos. executive who stepped down as head the Federal Housing Administration (FHA) in March -- thinks there's sunshine on the horizon and it may be here sooner than anyone realizes. During the interview, he gave reasons as to why he's staying bullish about the real estate recovery. The highlights of his reasons are as follows, along with why I agree with him. The point is, look at the signs and make an informed decision!

1. Markets are stabilizing

According to Stevens, the real delinquency rate is down from 10 percent in the second of quarter of 2010 to 8.5 percent in the second quarter of 2011. New foreclosure starts are also down. In addition, three of the hardest-hit states for foreclosures -- Florida, Nevada and Arizona -- are also stabilizing. Furthermore, for standard fixed-rate loans, the delinquency rate was 6 percent in 2010. That number has dropped to 5 percent in 2011. I agree with Stevens because the delinquency rate of 6 percent is pretty close to normal market conditions. Additionally, while we may face another round of foreclosures in this market, there is no denying that decreasing inventory is this market is also a factor in stabilization.

2. Many markets are experiencing real home-price growth

The problems with negative equity and declining prices are actually concentrated in a few key states. For example, 24 percent of the foreclosure activity is concentrated in Florida, and 50 percent of the foreclosure activity is in five key states. Stevens says that people who quote declines in the average price of homes nationally are using "dangerous data," since each market is different." According to Stevens, price declines are not a national problem. "The fundamentals are better than ever." In fact, if you remove the foreclosure properties from the equation, non-distressed properties have actually experienced an increase in prices. The challenge is consumer sentiment. People are scared to purchase now because they don't know whether they will have a job. Nevertheless, for those who are willing to purchase in this market, the opportunity has never been greater. Correct again. In addition, our market has many other variables that are not considered when so-called experts try to assess it on a national scale. Our market is driven by winter residents and buyers who are seeking vacation and second homes. We also are driven by the luxury home market as well. A lot of negative outlooks given on Southwest Florida fail to take those variables into consideration. There are extraordinary deals in Southwest Florida right now and if you're ready to buy, there is no better market.

3. The best time ever to buy

Many people view the cost of homeownership based exclusively on the price they pay for the property. A more accurate way to judge the cost is how much you paid plus the cost of the interest that you pay over the term of the loan. To illustrate this point, assume that a buyer is going to purchase a home with a $200,000 loan. The interest rate is 4 percent. Many buyers are worried about prices falling further. If the prices were to decrease another 5 percent, that means that the property would decline in value by approximately $10,000. If interest rates increase from 4 percent to 6 percent, the cost of waiting is extremely high. Over the life of a 30-year loan, the borrower will pay $87,937 more in additional interest. The cost of owning that home costs a whopping $77,937 more than the apparent $10,000 they might have saved by buying at the bottom of the market. This is a great way to illustrate this point. You're really not saving by waiting. You could actually end up paying more in the long run if the interest rates increase, which is a likely factor in next few years.

4. The coming home shortage

Stevens says that there are two primary factors that will contribute to a home shortage in the not-too-distant future. The first of these factors is the size of Generation Y (those born between 1977 and 1994), which is estimated to be approximately 80 million, or 25 percent of the U.S. population. They are now entering their prime time for starting their careers, their families, and for buying a home. The second variable is supply. There has been virtually no new construction, despite the predicted explosion in population growth. To illustrate the severity of this problem, the 2010 census put the U.S. population at approximately 309 million. By 2050, the prediction is that the U.S. population will be 439 million. That's an increase of 130 million people in just 40 years. Regardless of whether they own or rent, they will still need housing. We are already seeing inventory decreases in Southwest Florida. Looking at these census numbers really puts it into perspective as to the potential housing shortage in the future. Additionally, Collier and Lee counties are projected to grow in population to over 1 million by 2015 and over 1.5 million residents by 2040 (Source: SW FL Economic Indicators Report, FGCU).

5. Getting from here to there

Stevens also believes the major challenges we are facing in the short term are job creation and dealing with the tight credit situation. The government-sponsored enterprises of Fannie Mae and Freddie Mac, as well as FHA, have tightened lending guidelines to such a degree that is extremely difficult for even well-qualified buyers to obtain a loan. Furthermore, the tremendous amount of new regulation creates additional problems. For example, the Dodd-Frank bill alone adds more than 100 new regulations. Each of these regulations creates additional risk resulting in higher costs for the both the borrower and the lender. Lenders have to alter loan documents, create new systems, and retrain their people to handle these new requirements. Furthermore, the effect of "piling on" more and more regulations increases the cost to consumers, as lenders must defend themselves against additional litigation risks. According to Stevens, real estate is now at bargain levels that we will never see again in our lifetimes. If there were ever a time to buy a home, that time is now. Another interesting way to look at it… lending standards continue to tighten and looks as if there will be more to come.

This is by far the most reasonable assessment I've seen yet from the various commentary out there. It seems like the bottom line is that there are an abundance of reasons to buy now and another whole set of reasons for not waiting to buy! Whatever your reasons are for wanting to buy now, you're heading down the right road. However, you'll need a professional to guide that journey and help you navigate your way through this market. Make sure you hire an agent who understands the facts and figures and can represent you in the best way possible.

Staging versus Pricing: which is the magic bullet?

By D. Michael Burke

Change is in the air; do you feel it? Residential real estate inventory is decreasing and the median home price in Southwest Florida is rising. The luxury home market is showing hefty increases and some neighborhoods are experiencing shortages in homes for sale on the market. All signs seem point to an active season this year. So, we feel a little better than we did a year ago, but the point is that if you're selling your Southwest Florida home, now is not the time to rest easy.

In the land of staging a home to perfection (Southwest Florida), you may be inclined to think that doing this will get your home sold above all else. It's true that a well-staged home can be powerful marketing tool that gives you the competitive edge needed to stand out and attract potential buyers. However, while staging may get a buyer's attention once they walk in the door, you still have the challenging task of getting them into your home. Make no mistake - any way you cut it, pricing your home to sell is what will get potential buyers to your front door. Once inside, you can let the staging seal the deal.

In terms of pricing your home to sell, some sellers may still need to come to terms that their home may not be worth what they previously thought. According to agents surveyed in the HomeGain National Home Values Survey, approximately 77 percent of home owners believe their home is worth more than the recommended listing price. On the other side of that coin, you have about 67 percent of home buyers say home values are still overpriced. In addition, foreclosures in the neighborhood can certainly influence your asking price. While not in every case, foreclosures in a community can potentially reduce nearby property values, on average, by $20,300 per household, according to research by the Center for Responsible Lending.

But many sellers are not understanding nor accepting this. According to a Zillow study out earlier this summer, sellers who tend to overprice their homes are mostly those who bought post-housing bubble. Additionally, home sellers who purchased their home in 2007 or later are overpricing their homes by an average of 14 percent. Sellers who purchased their homes between 2002 and 2006 (pre-housing bubble) tend to price their homes about 9.3 percent above market value. Post-bubble buyers seem to believe they escaped the worst of the housing recession, as evidenced by how they price their homes today, but 2006 was just the beginning of the housing recession.

Overpricing homes is one of the biggest reasons for non-sale and causes stagnation in the market. It also keeps inventory from decreasing-not a good outcome for buyers and sellers alike. If you're a seller that has had your home on the market for way too long or if you're just getting ready to list, you may need to take a second look at your pricing.

In addition, review your representation (yes, your agent). Has he or she presented you cold hard facts and numbers showing you where you're pricing should be in order to sell your Southwest Florida home? If you cannot give a resounding "yes" to that question, stop the presses right now - you're not ready to sell! Take a step back (and a deep breath) and find an agent that can present you with valuable knowledge about the Southwest Florida market as well as sales/foreclosure numbers in your neighborhood. Find an agent who will price your home right and then market the heck out of it (staging included) - that is what it will take to get your home sold in a timely manner the Southwest Florida market. 11-26-11

Is your home ready to sell to Canadian Buyers?

By D. Michael Burke

Did you know that 25% of Florida real estate sales are contributed to foreign buyers? Did you also know that a large majority of foreign buyers in Southwest Florida are Canadians? As we've seen, the median home price in Southwest Florida is rising and inventory is shrinking. While that is good news for sellers, you'll still want to make sure your home is attractive to domestic and foreign buyers, especially Canadian buyers. The point is does your property have what it takes to catch the attention of a Canadian buyer? Let's find out!

Like Americans, economic activities of the last 4 years have also prompted Canadian home buyers to reassess priorities, change preferences and scrutinize every detail to make sure their new house fits their evolving lifestyle. Home sellers and agents alike should understand what design features Canadian buyers truly want.

According to AVIDBuilder.com's annual study of the home features Canadian buyers wants, there are several shifting trends in desires. Here are some aspects to understand when marketing to the Canadian Buyer:

Small is more desired than big.

The grandeur and opulence of preferences during the boom times of the recent past have given way to desires for smaller, more functional areas that can be summed-up as "practicality without sacrifice." Canadian home buyers are well aware that big comes with a price and have developed an increasing appetite for sensible designs with increasing utility. While many are willing to forgo space, they are not equating this with having to forfeit functionality.

Functioning Spaces as opposed to rooms.

Cordoned-off boxes are giving way to key functioning areas, driven by lifestyles that often mix family, work, and friends into the same arena. The home continues to evolve from strict borders of tasks, to blended areas of purpose, allowing home buyers to maintain their lifestyle requirements in a world of ever-increasing complexity. Zones for entertaining, working, family activities and retreating, are the focal points important to today's home buyers. These spaces need to be understood and incorporated into designs for maximum market appeal.

Green is getting attention.

Energy efficiency is not on the wish list for Canadian home buyers in 2012 â€” it is on the "must" list. Home buyers are increasingly aware of the rising costs of utilities and equally aware of what home builders can do to provide energy efficient homes with today's building practices and technologies. Paying to operate a home is as important as paying for a home, and energy efficiency is no longer an upgrade in the mind of a home buyer. Understanding what "green" means to potential home buyers will ensure that design dollars are invested in the areas where they will provide the best return.

Here are the top 5 for Canadian buyers:+

• Walk-in Closets: In each buyer category studied, the walk-in closet came up as a must.
• Energy-Efficient Appliances: This "must have" item is a natural fit with the overall energy efficiency preference of today's home buyers.
• Linen Closets: With the drive towards smaller spaces, the need for storage functionality is increasing and linen closets are an essential element for today's home designs.
• Large Kitchen: The kitchen is truly "base camp" for today's busy lifestyles, and in order to assume its many roles, this is one area where space is still a preference.
• Overall Energy Efficient Home: Mentioned before but worth saying again, today's home buyers expect an energy efficient home, and this provides home builders with a unique competitive advantage over the resale market.

Not making the top five, but still achieving honorable mention is the increasing trend toward outdoor living spaces. There is a strong preference for features such as outdoor fireplaces and outdoor cooking areas. With this in mind, plan designs should accommodate the increasing desire of home buyers to expand their living spaces beyond the confines of their exterior walls.

The study did make mention of some features that are losing desirability varied among the Canadian home buyer categories.

• Butler Pantry/Servery: It may be wallets re-opening with improving times that is causing more restaurant goers and less in-home entertainers, but whatever the cause, the preference for the butler pantry/server is waning.
• Whirlpool Tubs: Today's busy lifestyle may be driving the preference toward larger showers and away from whirlpool tubs.
• Formal Living and Dining Rooms: The formal rooms are giving way to the functioning spaces, and single-purpose rooms are losing their luster.
• Single-Car Garages: Much like our national anthem, from "far and wide" Canadian's rely on their vehicles for their busy lifestyles, and home designs offering only single garages are going to be a deterrent to today's home buyers.

It seems that Canadian home buyers have undergone a "reset" in their preferences and priorities when looking to buy. These preferences will undoubtedly apply to the Southwest Florida market as well. The upcoming season is predicated to be a busy one in Southwest Florida, so you'll want to do all you can to make your property attractive to Canadian buyers looking for a vacation home or winter home in Southwest Florida. If you don't know where to start, don't go it alone! Get an experienced real estate agent on your side who not only understands international buyers, but can assist you in making your house foreign buyer - ready and protect your interests! (11-19-11)

If your not sure who to call, I'm confident that I can help you sell your property. Call me today at 239-498-7600 or email Michael@CoconutPointRealEstate.com

Market Overview: September 2011

By D. Michael Burke

Well, the news is out for September 2011's real estate market report. And, depending who you are, it could be good news or it could be bad news! If you're a buyer looking for that perfect Southwest Florida home at a great deal, your time is running out! This is the 4th month that inventory has shrunk! The good news is… that inventory has shrunk and median home prices are increasing…this means our market is showing signs of ascent. It still has a way to go, but our markets along with many other markets across the country are showing positive and consistent signs of recovery. If you haven't figured it out yet, my point today is that it is a great time to buy in Southwest Florida! First, let's look at some facts for Estero, Bonita Springs, and Naples.

The number of new homes for sale listed in September is down 13% compared to September 2010. Total available inventory in the Naples, Bonita Springs, Estero market on October 1, 2011 stands at 7,459 units (4,052 condominiums and 3,407 single family homes). This represents a 24% decline from October 1, 2010. Closed sales through September 2011 are up 5% over the September 2010. Median sales price year-to-date remains approximately the same as 2010, but higher than 2009. Although the closed sales are down slightly from September 2010, they remain among the highest for the month during the past 12 years. Pending sales in September is the highest since March 2011 and one of the highest on record for the month. For July, August and September 2011 combined, inventory is down in every price segment in both condominiums and single family homes, with the exception of condominiums priced above $5 million. The largest decreases in inventory was for condos priced between $2- 5 million, which decreased by 27% and single family homes priced above $5,000,000, which posted a 24% decline.

In Naples, several neighborhoods are experiencing shortages in homes for sale. If you're looking at buying in Aqualane Shores, Collier's Reserve, Royal Harbour, Quail West, Port Royal, or The Crossings, you'll be out of luck for the moment as these neighborhoods are experiencing a shortage in inventory as of October 1, 2011.

Specifically in Estero, the actual number of Estero homes for sale increased from August to September, with homes for sale increasing by 19 homes. The total available homes were 456 in August versus 476 at the end of September. However, due to the level of closed sales the months of inventory for Estero homes for sale has remained level at September from August's 20 months. Since the beginning of February 2008 with 32 months of inventory, the months have dropped 12 months to its present level. The real estate market for Estero single family homes still remains a strong buyers' market. In Bonita Springs specifically, inventory has stabilized. Inventory is the most relevant market statistic today. The supply of active listings has dropped dramatically since Jan 2011 and even more from a year ago where it peaked at 14,000 listings compared to 770 at the end of September 2011. Inventory is now at around 7,500. The closed sale volume fell to 141 properties in September 2011. Compared to last year, closed sales are at 102% over this time last year. Overall the average price paid is 23% up from one year ago.

Diminishing supplies in all price ranges, historically low prices and mortgage rates, and the allure of Southwest Florida seem to support an active real estate season in our market. If you're looking to buy, now is not the time to wait for prices to fall, as it seems like this will not be the case in Southwest Florida. If you're looking to sell, things are looking up for you. If you price your property right, you could walk away with a good and fair deal.

Lastly, how you'll do all comes down to who you have representing you. The last thing you want to do in this market is have poor representation. You'll need an agent who can provide the market stats and knows how to read them, assuring that you get the best possible deal whether you're a buyer or seller. I cannot stress enough the importance of hiring a REALTOR® with market experience and GOOD marketing resources

If your not sure who to call, I'm confident that I can help you sell your property. Call me today at 239-498-7600 or email Michael@CoconutPointRealEstate.com

Southwest Florida as a Real Estate Investment: Make Sense?

By D. Michael Burke

Right off the bat, I'm just going to say that investing in property in Southwest Florida absolutely makes sense - if you do it the right way. Not only is now a great time to invest in Southwest Florida real estate, but it is still a great way to build your wealth and retirement fund. The point is that there is a simple strategy to doing this and now is the time to consider it, as we've seen rising home prices and decreasing inventories in neighborhoods from Marco Island to the Cape. Why wait 30 years for your stocks and bonds to mature when you could be enjoying the fruits of your labor now! I'm sure by now you're wondering how exactly this works.

Whether you're a full time resident in Southwest Florida or somewhere else, this strategy will work for you. When looking for an investment property in Southwest Florida, choose a good locale that is easy to lease. Consider the following:

• Waterfront Property - Investors can choose between Ocean front properties, freshwater lake homes, and canal homes.
• Pool / Waterfront Property - Some of the area's pool homes also happen to be waterfront. That's common here, with prices under $250,000.
• Gated Communities - Southwest Florida has communities for almost every recreational desire. Investors can choose between golf course, boating communities and retirement neighborhoods. Gated communities offer have pools, sporting facilities, workout centers, clubhouses, bike paths and more.

So, once you find that property, the idea is that your tenants will help you pay off your mortgage. If you're not a full-time resident, you can use it for holidays and then rent it out seasonally or as a vacation rental. The income from renting it out can pay for at least half the mortgage. Hang on to the property, and then sell in the future paying off the remaining mortgage. Then buy another. This will allow for a successful retirement fund that produces income and continues to appreciate in value and we gain in years to come in our real estate market. Those who invested in this manner prior to the recession may have experiences devaluation of the home, but still have plenty of equity built from just a small initial investment.

If you want to actively pursue buying rental property, there are some great deals on the market and there is no better time. As we know, the rental market has grown since the recession started, making it easier to find renters. Mortgage rates are low enough to take advantage of the opportunity. Current investment property opportunities in Southwest Florida are at levels that we may ever see again. With access to a good source and having a proven system for evaluating deals you will find a plethora of single family homes available at less than what it would cost to build them today. Those with cash to invest in Florida properties it is hard to beat private mortgage investments. What could be better than making a fully secured and over-collateralized loan that pays 8-12% interest? This means being able to invest in vacation homes in Florida and other properties without having to deal with all of the hassles of negotiating with sellers and agents or day to day property management.

Another consideration that changes the rules for investors is upcoming legislature. According to the Miami Herald, a property tax bill that will assist investors and new home buyers is up for consideration. Under the proposed new law, if you buy a home from 2012 and onward, you'll receive an additional homestead exemption of half of the property value. If you aren't eligible for homestead, there will be an increase cap of 3%, which is better than the current 10% cap. An additional bill plans to look at conducting commercial foreclosures outside the courtroom in order to speed along the residential foreclosure process and return them to the market. This bill will serve to help the Southwest Florida property market recover more quickly, but will allow less time for investors to grab a bargain. With this bill coming up, you may want to invest now.

I mentioned earlier having access to a good source and having a proven system for evaluation deals. This is critical to navigating the market and finding the deals. If you're new to investing, you definitely do not want to go it alone. Even the smartest investors have trusted real estate agents who assist in evaluating the deals. It's a good idea to consider the same route. You'll need to find an agent who knows this market well and has experience in investment purchases, as not every agent does. A good agent will help you understand what to realistically expect from your investment and ensure that you're looking in the right places for that ideal investment property. (11.12.11)

3rd Quarter Market Overview

By D. Michael Burke

Well, the news is out for September 2011's real estate market report. And, depending who you are, it could be good news or it could be bad news! If you're a buyer looking for that perfect Southwest Florida home at a great deal, your time is running out! This is the 4th month that inventory has shrunk! The good news is… that inventory has shrunk and median home prices are increasing…this means our market is showing signs of ascent. It still has a way to go, but our markets along with many other markets across the country are showing positive and consistent signs of recovery. If you haven't figured it out yet, my point today is that it is a great time to buy in Southwest Florida! First, let's look at some facts for Estero, Bonita Springs, and Naples.

The number of new homes for sale listed in September is down 13% compared to September 2010. Total available inventory in the Naples, Bonita Springs, Estero market on October 1, 2011 stands at 7,459 units (4,052 condominiums and 3,407 single family homes). This represents a 24% decline from October 1, 2010. Closed sales through September 2011 are up 5% over the September 2010. Median sales price year-to-date remains approximately the same as 2010, but higher than 2009. Although the closed sales are down slightly from September 2010, they remain among the highest for the month during the past 12 years. Pending sales in September is the highest since March 2011 and one of the highest on record for the month. For July, August and September 2011 combined, inventory is down in every price segment in both condominiums and single family homes, with the exception of condominiums priced above $5 million. The largest decreases in inventory was for condos priced between $2- 5 million, which decreased by 27% and single family homes priced above $5,000,000, which posted a 24% decline.

In Naples, several neighborhoods are experiencing shortages in homes for sale. If you're looking at buying in Aqualane Shores, Collier's Reserve, Royal Harbour, Quail West, Port Royal, or The Crossings, you'll be out of luck for the moment as these neighborhoods are experiencing a shortage in inventory as of October 1, 2011.

Specifically in Estero, the actual number of Estero homes for sale increased from August to September, with homes for sale increasing by 19 homes. The total available homes were 456 in August versus 476 at the end of September. However, due to the level of closed sales the months of inventory for Estero homes for sale has remained level at September from August's 20 months. Since the beginning of February 2008 with 32 months of inventory, the months have dropped 12 months to its present level. The real estate market for Estero single family homes still remains a strong buyers' market.

In Bonita Springs specifically, inventory has stabilized. Inventory is the most relevant market statistic today. The supply of active listings has dropped dramatically since Jan 2011 and even more from a year ago where it peaked at 14,000 listings compared to 770 at the end of September 2011. Inventory is now at around 7,500. The closed sale volume fell to 141 properties in September 2011. Compared to last year, closed sales are at 102% over this time last year. Overall the average price paid is 23% up from one year ago.

Diminishing supplies in all price ranges, historically low prices and mortgage rates, and the allure of Southwest Florida seem to support an active real estate season in our market. If youâ€™re looking to buy, now is not the time to wait for prices to fall, as it seems like this will not be the case in Southwest Florida. If you're looking to sell, things are looking up for you. If you price your property right, you could walk away with a good and fair deal.

Lastly, how you'll do all comes down to who you have representing you. The last thing you want to do in this market is have poor representation. You'll need an agent who can provide the market stats and knows how to read them, assuring that you get the best possible deal whether you're a buyer or seller. I cannot stress enough the importance of hiring a REALTOR® with market experience and GOOD marketing resources.

Southwest Florida as a Real Estate Investment: Make Sense?

By D. Michael Burke

Right off the bat, I'm just going to say that investing in property in Southwest Florida absolutely makes sense - if you do it the right way. Not only is now a great time to invest in Southwest Florida real estate, but it is still a great way to build your wealth and retirement fund. The point is that there is a simple strategy to doing this and now is the time to consider it, as we've seen rising home prices and decreasing inventories in neighborhoods from Marco Island to the Cape. Why wait 30 years for your stocks and bonds to mature when you could be enjoying the fruits of your labor now! I'm sure by now you're wondering how exactly this works.

Whether you're a full time resident in Southwest Florida or somewhere else, this strategy will work for you. When looking for an investment property in Southwest Florida, choose a good locale that is easy to lease. Consider the following:

• Waterfront Property - Investors can choose between Ocean front properties, freshwater lake homes, and canal homes.

• Pool / Waterfront Property - Some of the areaâ€™s pool homes also happen to be waterfront. That's common here, with prices under $250,000.

• Gated Communities - Southwest Florida has communities for almost every recreational desire. Investors can choose between golf course, boating communities and retirement neighborhoods. Gated communities offer have pools, sporting facilities, workout centers, clubhouses, bike paths and more.

So, once you find that property, the idea is that your tenants will help you pay off your mortgage. If you're not a full-time resident, you can use it for holidays and then rent it out seasonally or as a vacation rental. The income from renting it out can pay for at least half the mortgage. Hang on to the property, and then sell in the future paying off the remaining mortgage. Then buy another. This will allow for a successful retirement fund that produces income and continues to appreciate in value and we gain in years to come in our real estate market. Those who invested in this manner prior to the recession may have experiences devaluation of the home, but still have plenty of equity built from just a small initial investment.

If you want to actively pursue buying rental property, there are some great deals on the market and there is no better time. As we know, the rental market has grown since the recession started, making it easier to find renters. Mortgage rates are low enough to take advantage of the opportunity. Current investment property opportunities in Southwest Florida are at levels that we may ever see again. With access to a good source and having a proven system for evaluating deals you will find a plethora of single family homes available at less than what it would cost to build them today. Those with cash to invest in Florida properties it is hard to beat private mortgage investments. What could be better than making a fully secured and over-collateralized loan that pays 8-12% interest? This means being able to invest in vacation homes in Florida and other properties without having to deal with all of the hassles of negotiating with sellers and agents or day to day property management.

Another consideration that changes the rules for investors is upcoming legislature. According to the Miami Herald, a property tax bill that will assist investors and new home buyers is up for consideration. Under the proposed new law, if you buy a home from 2012 and onward, you'll receive an additional homestead exemption of half of the property value. If you aren't eligible for homestead, there will be an increase cap of 3%, which is better than the current 10% cap. An additional bill plans to look at conducting commercial foreclosures outside the courtroom in order to speed along the residential foreclosure process and return them to the market. This bill will serve to help the Southwest Florida property market recover more quickly, but will allow less time for investors to grab a bargain. With this bill coming up, you may want to invest now. I mentioned earlier having access to a good source and having a proven system for evaluation deals. This is critical to navigating the market and finding the deals. If you're new to investing, you definitely do not want to go it alone. Even the smartest investors have trusted real estate agents who assist in evaluating the deals. It's a good idea to consider the same route. You'll need to find an agent who knows this market well and has experience in investment purchases, as not every agent does. A good agent will help you understand what to realistically expect from your investment and ensure that you're looking in the right places for that ideal investment property.

Home Inspections: You need to be represented

By D. Michael Burke

In the Southwest Florida Real Estate industry, you're ahead of the game if you've managed to find a truly dedicated REALTOR® who has a passion for their business. Unfortunately, not all agents have this passion and will go bat for you and are YOUR advocate in every stage of the deal.

There are so many consumers here is Southwest Florida (and everywhere!) that do not know the rules of the game and don't realize when the agent they have hired is doing (or not doing) what they should be doing. One area that is quite common to see a agent not fully representing their client's best interests is at the attendance of the buyer's home inspection.

A good buyer's agent should be at the home inspection representing their buyer client. Likewise, the seller's agent should also be there to represent the seller during the home inspection. How can you properly represent your clients interest in a home inspection if you are not there to hear what has been said by the home inspector? The answer is simple - you cannot.

Buyer's agent attending home inspection

As a buyer's agent, the REALTOR® must put their clients' interests before their own and negotiate for the best terms and conditions for their client. If a buyer's agent is not at the home inspection, it makes it far more difficult to negotiate the best terms and conditions for the buyer. Part of attending the home inspection is understanding how potential defects will affect the value, as well as what the cost is to remedy such defects. A buyer's agent's job is not to just drive a buyer around until they find a home. Complete buyer's representation is seeing the transaction through until closing. For example, if a safety issue is discovered during an inspection, a buyer is more than likely to want to get that fixed especially if it poses a real danger. There is always a fine line though on what is reasonable and appropriate. Part of negotiating is getting the things that are most important addressed in some fashion. This is one of the many roles of a buyer's agent.

Buyer's agent attending home inspection

It is just as important that the seller's listing agent is present at the inspection. Maybe even more so than the buyer's agent! The listing agent should be there to hear exactly what the home inspector says about the property as it relates to defects. There are two very important factors on why this holds true.

There are some inspectors that do an absolutely great job of conveying the facts to a buyer and then explaining how those facts relate to what is or isn't appropriate. On the other hand, some home inspectors may make the most minor defect into a catastrophic event. In the event you have a home inspector that falls into the latter category, a good listing agent in attendance can ask the inspector questions that may alleviate any fears that may have been caused due to the nature in which the issue was explained. There have been plenty of times where I have been able to temper a buyer's fears by just asking the home inspector a few simple questions.

Secondly, a buyer may use the home inspection as a second round of negotiations. In some cases this is warranted and other cases it is not. This could happen even more if the sellerâ€™s agent is not in attendance to hear what the inspector said. The agent can later explain to the seller whether there is a legitimateÂ need to address an issue or not.

If you are thinking of selling your Southwest Florida home and when you interview the a prospective REALTOR®, make sure you ask them if they will be in attendance at the home inspection representing your interests! If you start hearing excuses on why the agent may not be attending, I would give serious consideration to someone who will be there for YOU! You may even hear from a real estate agent that they don't attend home inspections because someone has told them that it increases their liability. Don't buy it! I completely disagree. It's the agent's conduct at the inspection that puts them at risk, not their presence.

Home inspections are an important part of the home buying and selling process in Southwest Florida. It makes sense that both parties have proper representation. The key is to make sure you find a REALTOR® who home inspections part of their business practice.

Should you consider international homebuyers when selling your home?

By D. Michael Burke

Did you know that during this past year alone, a staggering $82 billion of residential property in the U.S. was bought by foreign or foreign-born buyers? The National Association of Realtors (NAR) reported this fact, along with the news that this was a $16 billion increase from 2010. What makes this more interesting yet is that 61% of this total represented single family homes. The NAR profile states that most international homebuyers tend to move to warmer places such as Florida, California, Arizona and Texas but most international homebuyers also mentioned desirable location (45%) and profitable investment (29%) as the main reason for purchasing.

In addition, investors are coming to the United States because they like the idea that our wiring, plumbing and building codes are somewhat up-to-date as compared to those countries overseas.

But of course, thereâ€™s more to it than that, such as our newly affordable home prices, bountiful inventory, a strong U.S. rental market for investors and the availability of experienced property managers. United States home ownership is also seen as a secure investment. In addition, many U.S. Realtors have a global perspective and experience working with clients from different cultures. This allows for a comfortable client-agent relationship and smoother transactions.

This can be viewed as potentially good news for home sellers in Southwest Florida; 31% of real estate sales in Florida in 2011 were international buyers. But whether or not your plans to sell your Southwest Florida homes should include international homebuyers depends on many factors.

What price range are international buyers looking at?

When selling your property pricing is a large part of marketing, more so in the last few years. So what price range are international buyers looking at? The average home price paid by international buyers in the U.S. was $315,000. In South Florida, we've found that many foreign buyers have been purchasing waterfront properties specifically. Some oceanfront homes have been purchased by foreign buyers in excess of $10,000,000. Waterfront condos, going for over $2,000,000, are also popular amongst foreign buyers.

Who's buying in Southwest Florida?

When deciding where to purchase, foreign investors often consider the proximity to their home country, convenience of air travel and airline routes, climate and nearness to attractions and resources such as colleges, job markets and international corporations. Generally speaking, the East Coast tends to attracts Europeans and the West Coast attracts more Asian buyers. Florida is popular among South American, European and Canadian buyers.

As a home seller or Realtor, international buyers are an important market to consider in your home selling efforts. For further insight into this growing group of buyers, read the National Association of Realtorâ€™s 2011 Profile of International Home Buying Activity

Preparing to target foreign buyers

With the trend of international buyers considering Southwest Florida continuing to increase, you may want to consider marketing your home not only to those within your city or state or even nation, but to the world at large. Opening your property up to national as well as international buyers will give you the advantage you need to sell your home quickly and for a good price.

While you'll want to be sure you retain a REALTOR® who has experience in International buying, here are some strategies that can jumpstart your international home selling marketing plan.

• Advertise your property in a foreign newspaper. You can easily do a quick search for a newspaper in the countries you wish to advertise to, and through their website either place an ad directly or locate contact information for their classifieds department. Remember to keep in mind foreign currency rates when getting prices.

• Make your own website. One of the quickest and least expensive ways is to create your own website for the property. You can easily find a cheap or free website hosting service and can even hire a web designer to help you post the site if you feel like you are not technologically prepared to build a website on your own. Also, keep in mind that many hosting companies now offer very simple website building software that just about anyone can use, and on top of that most of these companies offer the software for free.

• Place an ad in a foreign magazine. If you truly have a great piece of luxury property, you may want to consider taking out an ad in a foreign magazine. Look for aspects of your home that are unique and look for magazines that match that uniqueness. So, for example, if you have a gourmet kitchen, you may want to put an ad in an international cooking magazine. Or, if you have waterfront property with water access, you may want to take out an ad in an international boating or fishing magazine.

• Post an ad on Craigslist or other international classifieds sites. Craigslist has made it as simple as possible to advertise your property to an international audience. Posting an ad on Craigslist and similar sites is also quite simple as well as free. You will not only be able to post a large amount of text regarding your property but you will also be able to post photos, and even a link to your website featuring the property if you have one.

• Make your home stand out. The best way to sell your home to any buyer, including an international buyer, is to find its selling points. Find what makes your home stand out among the many luxury properties and lofts and really sell that point. Whether it's the view, the square footage, the location or the amenities, highlight them as much as you can in your ad to get your potential buyers hooked on learning more and potentially buying your property.

I cannot stress enough the importance of hiring a REALTOR® with International selling/buying experience. Not only will you benefit when it comes time to negotiate and solidify the contract, but a REALTOR® with this kind of experience can protect your interests as well.

Getting the Best Mortgage: What you should know.

By D. Michael Burke

Once you've decided to purchase a home in Southwest Florida, it may be time to think about financing. While many homes in Southwest are purchased with cash, there are still many, many who will utilize financing for their purchase.

Your REALTOR® can help you secure financing of course, but you'll still want to educate yourself on how to get the best mortgage. The point is that nowadays, while it may be more difficult to secure a home loan, you can still find yourself in a financial situation that spells t-r-o-u-b-l-e if you unknowingly deal with the wrong company.

Here's a "crash course" in mortgage lending and finding the best deal you can without compromising yourself or your finances!

Get information from several lenders, not just one

Home loans are available from several types of lenders--thrift institutions, commercial banks, mortgage companies, and credit unions. Different lenders may quote you different prices, so you should contact several lenders to make sure you're getting the best price.

You can also get a home loan through a mortgage broker. Brokers arrange transactions rather than lending money directly; in other words, they find a lender for you. A broker's access to several lenders can mean a wider selection of loan products and terms from which you can choose. Brokers will generally contact several lenders regarding your application, but they are not obligated to find the best deal for you unless they have contracted with you to act as your agent.

Obtain All Important Cost Information

Know how much of a down payment you can afford, and find out all the costs involved in the loan. Knowing just the amount of the monthly payment or the interest rate is not enough. Ask for information about the same loan amount, loan term, and type of loan so that you can compare the information. The following information is important to get from each lender and broker:

Rates

• Ask each lender and broker for a list of its current mortgage interest rates and whether the rates being quoted are the lowest for that day or week. Ask whether the rate is fixed or adjustable. Keep in mind that when interest rates for adjustable-rate loans go up, generally so does the monthly payment.

• Ask about the loan's annual percentage rate (APR). The APR takes into account not only the interest rate but also points, broker fees, and certain other credit charges that you may be required to pay, expressed as a yearly rate.

Points

Points are fees paid to the lender or broker for the loan and are often linked to the interest rate; usually the more points you pay, the lower the rate.

• Check your local newspaper for information about rates and points currently being offered.

• Ask for points to be quoted to you as a dollar amount--rather than just as the number of points--so that you will actually know how much you will have to pay.

Fees

A home loan often involves many fees, such as loan origination or underwriting fees, broker fees, and transaction, settlement, and closing costs. Every lender or broker should be able to give you an estimate of its fees. Many of these fees are negotiable. Some fees are paid when you apply for a loan (such as application and appraisal fees), and others are paid at closing. In some cases, you can borrow the money needed to pay these fees, but doing so will increase your loan amount and total costs. "No cost" loans are sometimes available, but they usually involve higher rates.

• Ask what each fee includes. Several items may be lumped into one fee.

• Ask for an explanation of any fee you do not understand. Some common fees associated with a home loan closing are listed on the Mortgage Shopping Worksheet in this brochure.

Down Payments and Private Mortgage Insurance

Some lenders require 20 percent of the home's purchase price as a down payment. If a 20 percent down payment is not made, lenders usually require the home buyer to purchase private mortgage insurance (PMI) to protect the lender in case the home buyer fails to pay. When government-assisted programs such as FHA (Federal Housing Administration), VA (Veterans Administration), or Rural Development Services are available, the down payment requirements may be substantially smaller.

• Ask about the lender's requirements for a down payment, including what you need to do to verify that funds for your down payment are available.

• Ask your lender about special programs it may offer.

If PMI is required for your loan:

• Ask what the total cost of the insurance will be.

• Ask how much your monthly payment will be when the PMI premium is included.

Obviously, get the BEST deal that you can!

Once you know what each lender has to offer, negotiate for the best deal that you can. On any given day, lenders and brokers may offer different prices for the same loan terms to different consumers, even if those consumers have the same loan qualifications. Once you are satisfied with the terms you have negotiated, you may want to obtain a written lock-in from the lender or broker. The lock-in should include the rate that you have agreed upon, the period the lock-in lasts, and the number of points to be paid. Lock-ins can protect you from rate increases while your loan is being processed; if rates fall, however, you could end up with a less favorable rate. If that happens, try to negotiate a compromise with the lender or broker.

Yes, fair lending is STILL required by law!

The Equal Credit Opportunity Act prohibits lenders from discriminating against credit applicants in any aspect of a credit transaction on the basis of race, color, religion, national origin, sex, marital status, age, whether all or part of the applicant's income comes from a public assistance program, or whether the applicant has in good faith exercised a right under the Consumer Credit Protection Act.

The Fair Housing Act prohibits discrimination in residential real estate transactions on the basis of race, color, religion, sex, handicap, familial status, or national origin.

Lastly, it's a good idea to review your credit report for accuracy and completeness before you apply for a loan. You can order a copy of your credit report by visiting www.annualcreditreport.com. And remember, your REALTOR® has experience working with brokers and lenders. He or she can refer you to trusted resources as well as assist you in understanding the process.

Market at a Glance: Locally and Nationally

By D. Michael Burke

Here we are...already in mid-September! It's hard to believe how fast time goes. We are in "pre-season" warm up mode and gearing up for a new Southwest Florida season that is steadfastly approaching! It will be upon us before we know it! The point is that now is the time to get that home for sale on the market! Don't wait! As we'll talk about here, inventory is decreasing and that window of opportunity is closingâ€¦so, if you're looking to buy, you should have been looking already. Speaking of inventory, let's take a look at the market for August 2011.

Local Market at a Glance

For Southwest Florida, specifically Naples, Bonita Springs and Estero, closed sales in August 2011 are approximately the same as last year at this same time and is the third highest for the month in 11 years. The year-to-date closed sales are up approximately 5% and volume is up 6.5%. Sales of properties priced above $1,000,000 are up 11% through August. Pended sales remained approximately the same in August as July and a rolling 12-month comparison (8/1/10 - 7/31/11) ranks them among the highest on record for this period. The number of properties placed in inventory during August is 12% lower than August 2010. Available inventory in the Naples, Bonita Springs, and Estero markets stands at 7,263. This represents a 26% decrease from last year at this time. Overall inventory suggests an eight month supply based on the number of closed sales during the past 12 months.

Nationally Speaking

On September 15, 2011 RealtyTrac released their U.S. Foreclosure Market Report for August 2011 which shows that foreclosure filings we're reported on 228,098 properties in the U.S. in August, a 7 percent increase from the previous month but a decrease of almost 33 percent from the year before. In August, 1 out of every 570 homes in the U.S. had a foreclosure filing.

Highlights from the U.S. Foreclosure Market Report for August, 2011:

Default notices were filed for the first time on a total of 78,880 U.S. properties in August, a nine-month high and a 33 percent increase from July. Despite the monthly increase, default notices were still down 18 percent from August 2010 and were 44 percent below the monthly peak of 142,064 default notices in April 2009.

Default notices increased more than 40 percent on a month-over-month basis in several states, including New Jersey (42 percent), Indiana (46 percent) and California (55 percent), but were still down from a year ago in all of those states.

Foreclosure auctions were scheduled for 84,405 U.S. properties in August, a decrease of 1 percent from the previous month and a decrease of 43 percent from August 2010.

Lenders repossessed a total of 64,813 U.S. properties (REOs) in August, a 4 percent decrease from the previous month and a 32 percent decrease from August 2010. The REO total in August marked a six-month low and was 37 percent below the monthly peak of 102,134 bank repossessions in September 2010.

Nevada, California, Arizona post top state foreclosure rates

Nevada posted the nation's highest state foreclosure rate for the 56th straight month in August, with one in every 118 housing units with a foreclosure filing during the month. There were a total of 9,677 Nevada properties with foreclosure filings in August, a 3 percent decrease from the previous month and a 28 percent decrease from August 2010.

Nevada's overall decrease was driven by a 30 percent month-over-month drop in scheduled auctions and a 6 percent month-over-month decrease in REOs. Default notices in Nevada increased 31 percent from July, but were still down 32 percent from August 2010. Florida does fall into the top 5 states.

Looking ahead

While we know it isn't 100% accurate to gauge national activity against our own because we are a unique market that doesn't have a lot of the same lifestyle and working-class criteria as other markets, it is still worthwhile to review the market on a national level to understand where the rest of the country is in relation to Southwest Florida. Here, it is still a buyerâ€™s market, but as I mentioned earlier, that window is closing very fast. Also, if you have a home to sell, don't wait to get it out there because you can bet we are going to have a lot of activity this season and you don't want to get lost in the shuffle - start marketing now! Make sure you have a REALTOR® who knows and understands the market well - and follows local and national market statistics. A good REALTOR's® knowledge in invaluable to you finding the perfect home of selling the home you have now in Southwest Florida.

Looking to buy or Sell in Southwest Florida?

By D. Michael Burke

I was recently interviewed by Christine Patrick for a national real estate publication and wanted to share the interview with my readers. Please email me any questions you may have about the current real estate market: Michael@CoconutPointRealEstate.com and I can answer them for you.

If you've read recent articles about the Real Estate market in Southwest Florida, it isn't news that things are starting to heat up. Inventory is decreasing and median home prices are increasing. For International buyers, their interest in Southwest Florida has been jumpstarted. And, there are still local residents and visitors interested in getting good deal or selling a property.

I recently set out to find the best source of information for residents and visitors alike. I started by making a call to Michael Burke, who is a top producing Realtor® in Southwest Florida and the publisher of the Coconut Point Press, a publication dedicated to bringing buyers and homeowners up-to-the-minute real estate news and information.

The interview is as follows:

Q: There's so much out there on the news and the Internet about our market. How does a homeowner or buyer find a good real estate agent?

A.There are many Realtors® selling in Southwest Florida, but finding a good one is harder than you think! A good RealtorÂ® should know the market inside and out, and has the sales track record to prove it! I always recommend interviewing a Realtor® as you would a potential employee. Ask for credentials and sales history, and don't forget to ask for licensing information as well. Once you find a qualified experienced Realtor®, the best market information to follow is the information provided to you by your Realtor®. Your RealtorÂ® should be following the market closely and bringing you that information as it happens.

Q. If you want to sell a home here in Southwest Florida, what specifically should your RealtorÂ® be doing for you?

A. Your Realtor® should first be helping you set the right price for your home. This is probably the single most important thing you'll do to sell your home. It must be priced to sell, meaning that pricing with large margins are not advised. You have to price competively just to get someone to consider looking at your property.

In addition, your Realtor® should be offering you marketing tools that will get your house sold. My team uses a variety of online and print marketing tools to get our clients' homes seen and is extremely effective at capturing out-of-town buyers in the summer and targeting in-town buyers during season. The newest addition to our superior market campaign is our interactive floor plans and videos. The more 'eyes' we get to the home, the better chance we have at getting top dollar for a seller's home.

Q. Are those marketing tools all free to your clients?

A. Yes!!

Q. What about listing your home? I know we're getting close to our upcoming season and many people are waiting to list their homes until season starts. Is this a good idea?

A. Absolutely not a good idea to wait! The September market offers the lowest inventory of the year. By October, home sellers will see increasing inventory and price reductions, and sellers become more aggressive to capture the early bird buyers. More competition means less money. Sellers should list right now and, with 90% of buyers starting their searches online, professional photos, detailed descriptions, videos and search engine optimization are critical to getting the listing seen now!

Q. What if I'm looking to buy? What can I expect to see in the market right now and will it get more difficult to find what I'm looking for when season starts?

A. Good question! Obviously, it is a buyer's market, but I would not expect it to last. Over the last 3 months, we've seen inventory decline in many neighborhoods in Naples, Bonita Springs, and Estero. In some neighborhoods, we've also seen the median home price continue to rise. In season, we may see a lot more of this and it will definitely be more of a challenge. Our team tracks data each month to assess exactly where the market is going and what homes are selling where.

Our team also tracks sales and activity per neighborhood. For example, if you're looking to buy a home in Shadow Wood, Bonita Bay, or Mediterra, we can tell you exactly what's going on in that neighborhood and what to expect for inventory and pricing.

Q. Michael, it looks like we're down to the last minutes of our interview. Tell me lastly why your team is who I should choose to buy or sell my home in Southwest Florida?

A. Sure! The Coconut Point Team is fully equipped with the resources to buy or sell your home â€“ period! Not only do we have the best, most comprehensive marketing tools to sell your home in Southwest Florida, we have our finger on the pulse of the market and we have the track record to prove it, thus the banner year in sales we are currently experiencing.

We offer our clients free tools, such as my exclusive newspaper publication, the Coconut Point Press, which showcases my clients' homes and is available through an email edition as well. We also have an award-winning website, www.CoconutPointRealEstate.com and with my Elite Seller Feedback System, you'll know what prospective buyers have to say about your property after they have viewed it. If you're selling your home, our Exclusive Monthly Market report will also keep you updated monthly as to the closed sales in your community.

At this time, I would love to offer readers a free consultation because Iâ€™m confident we can help. Readers can contact me, Michael Burke, directly at 239-498-7600, or email me at Michael@CoconutPointRealEstate.com.

Q. Thanks, Michael! It sounds like the Coconut Point Team is one to follow for up-to-the-minute information and resources to buy or sell in Southwest Florida! Thanks again for your time!

A. Upon the commencement of our time together, I will say that I was pleasantly surprised and the multitude of marketing services and tools that Michael and his team, the Coconut Point Team, provides to its clients. I really got the impression that Michael knew the market and could be a great resource and very helpful to any resident or winter visitor looking to buy a property in Southwest Florida. But, you'd better hurry! According to the Coconut Point Team, now is the time!

If your not sure who to call, I'm confident that I can help you sell your property. Call me today at 239-498-7600 or email Michael@CoconutPointRealEstate.com

Pricing Your Home Right

By D. Michael Burke

Once you decide to sell your home, the biggest challenge is pricing. This is a question I get asked a lot by readers and clients alike, "When setting a price for my home, how much margin for negotiation should I leave?" So, why would you ask these questions? You may ask this question because you don't want to give anything away or leave money on the table. You may also be prompted to ask these questions due to past experiences in buying or selling a home. In Southwest Florida, you may even be asking because you know it's a buyer's market at the moment. These are all very valid reasons, but the point is you'll want to price your home to sell!

Pricing your home to sell has never been as critical as it is in this market. Pricing is everything! Consider this: some estimates have shown that 70% of listed homes will not even be looked at due to pricing! In a market with steady or declining values, lost time equals lost money. Lastly, setting the initial market position correctly could save you thousands of dollars!

The best way to sell your home is to think about how to buy a home. When we think about buying a home, we already know that 94% of homebuyers are utilizing the Internet to search, which quickly removes unwanted homes not in the search criteria. We also know that todayâ€™s buyers are smart, informed, and they will choose a price range when they search. Gone are the days when homebuyers had to search through homebooks! Information is at the buyers fingertips and they will go where the information is!

The trick for you, the seller, is not to get your property removed or disqualified from the buyers online search criteria. For example, if you were willing to sell your home for $350,000, but through bad advice you priced your home at $366,000. A buyer performs a search online for a price range between $340,000 and $360,000, which is reasonable for your home and neighborhood. Unfortunately, your home is now eliminated at $366,000. Just the same, pricing your home at $339,900 would have equally hurt you in that same search. In this market, more people can afford a lower priced home than a higher priced home. And, it takes more than one interested buyer to get a bidding war started.

Also, consider these additional reasons how pricing your home right can be an advantage:

• When your home sells faster, you save carrying costs which include mortgage payments, taxes, insurance, and maintenance.

• A quicker sale creates less inconvenience to you when it's time to move.

• Proper pricing creates fewer demands on you, by helping your homeÂ sell faster.

• Priced at market value, your home will gain exposure to more prospectsÂ who can afford the price.

• The final sales price is probably one that will be affordable by more purchasers.

• sellers often accept a much lower price at a much later date since that one buyer willing to pay the higher price never comes, costing you more in time and carrying costs.

• The three major things that affect a sale are location, condition, and price. You cannot control the location, but you do control the condition and the price.

In overview, a lower price brings more buyers to your home as well as makes you look good compared to mispriced homes around you. Lastly, you can always say no to an offer, but you can't say anything if there is no offers at all! So, when asking "how much margin for negotiation should I leave when pricing my home?" my answer is a none, nada, and zero! Price your home right the first time and not only will negotiations be fair, but you'll actually sell your home, which is the end result you want, right?

To price your home right, I highly recommend hiring an experienced real estate professional who not only knows the market, but knows your neighborhood as well. If you hire the right agent, youâ€™ll be on the right track to selling your home!

Thinking of buying? What type of property should you look at?

By D. Michael Burke

Unless you've been living under a rock, you know that now is undoubtedly a great time to buy a home - at least when it comes to affordability. According to economists with the National Association of Realtors, the Housing Affordability Index, a measure of the relative affordability of purchasing a new home, isÂ at the highest level since the index was created in 1971.

While you are considering this purchase and you know that you are in a financial position to do so, you're now asking yourself what type of property to consider buying. Perhaps a single-family home? Or maybe a condo or townhome? The point is you have your emotional preferences, but you should also know the pros and cons of each property type before you make a rational choice. Here's a review of each for your reference.

The Fixer-Upper

First-time home buyers often find when they first start looking at homes that there is a difference between what they want and what they can afford. A fixer-upper can often bridge that affordability gap because the market discounts properties that need work. First-time home buyers can, however, easily find themselves in over their heads if they're not careful.

Pros

• Fixers can be found at a deep discount to properties that are in "move-in" condition.

• Fixers can be a good investment as cosmetic improvements can dramatically improve marketability.

• Ownership is fee-simple and you can do what you please with your land and exterior of the dwelling.

Cons

• The novice can easily miss serious and expensive repair items with a typical walk-through inspection.

• Minor repair items can develop into full-blown structural problems if not properly attended to after taking ownership.

• Major repair work can keep you from occupying the property immediately.

• Construction projects are almost always more expensive than you expect.

Protect Yourself

• Don't overestimate your ability to do the repair work yourself.

• Pay for your own home inspection from anÂ American Society of Home Inspectors (ASHI) certified inspector.

• Get contractor bids before you close so you know what you are up against.

• Create a project plan and budget for improving your fixer.

• Assess the livability of the property during needed repair work.

Condominiums

Condominiums have long been popular with first-time home buyers. In this form of ownership, you own the inside of your unit and have a percentage ownership of the land and common areas of the development. You do not own or have the right to change the exterior of the unit. Every condo project has its own homeowner's association (HOA) that is responsible for maintenance of common areas and enforcement of HOA policies and restrictions.

Pros

• Affordability is generally much better than a traditional single family house.

• Maintenance work requirements are minimal.

Cons

• HOA fees can be significant and can rise when the HOA budget runs dry or when major repair work is needed.

• HOAs can be dysfunctional and poorly run.

• HOA rules can restrict your ability to rent out your unit.

• Can be more difficult to sell in a slow real estate market.

• Condos in projects that do not meet FHA (Federal Housing Administration) or FNMA (Fannie Mae) standards can be difficult to sell or even refinance.

Protect Yourself

• Be careful to review provisions of condominium by-laws and conditions, covenants and restrictions (CC&Rs) carefully.

• Due to project approval requirements, avoid condo projects that are anywhere near the following percentages: 30 percent of the units are non-owner occupied, 15 percent of the units are delinquent on HOA dues or 10 percent of the units are owned by one individual.

• Check to see if your project isÂ FHA and/orÂ FNMA approved.

• Review (or better yet, have an accountant review) the HOA budget carefully.

• Avoid any HOA where there is any hint of issues with construction defects.

• Planned Unit Development (PUD) Townhome

• Townhome is a descriptive term for a dwelling that shares a common wall with other dwellings. Many townhomes built these days are located in so-call planned unit developments, or PUDs. A PUD is a planned community that generally has common areas and roads maintained by an HOA. The HOA is also generally responsible for maintenance of the exterior of the units and insurance.

Pros

• Affordability is similar to condominiums.

• Lender project approval requirements are not as stringent as condominiums or co-ops.

• Maintenance requirements are minimal.

• HOA fees are generally lower than condominiums but do not include property taxes.

Cons

• Neighbors and privacy can be an issue.

• Typically have little outdoor yard space compared to detached dwellings.

• Can be more difficult to sell in a down market compared to detached dwellings.

Protect Yourself

• Review the PUD by-laws and restrictions carefully.

• Review the HOA budget to ensure the stability of the HOA.

• Ask other homeowners about how they like living in the PUD.

• No matter what property you decide to purchase, the best way to protect yourself is to hire an experienced RealtorÂ® who understands your needs and will work hard to find the perfect property. Beware of the agent who insists you can afford something that you know you cannot, or seems to know what you want before you've had the opportunity to discuss your thoughts in detail. (9/2/2011)

What are homebuyers looking for?

By D. Michael Burke

Here's a little preview:

a home in great condition with rooms that can do double duty

Areas that mingle indoor and outdoor living -- patios, porches, decks and outdoor rooms -- are always a plus.

And so are those features that offer a little luxury, like garden tubs, first-rate appliances and high-dollar countertops.

Buyers are also searching for solid, well-maintained properties that will give them their money's worth. But, more than anything, buyers want to drive a hard bargain. The point is that buyers simply want great deals and are looking to negotiate at any price. Are you looking to buy in Southwest Florida?

Here are eight items popular with buyers this year and may help you decide what you want!

Homes in Good Condition

Buyers demand homes that are well maintained. Buyers would rather spend the money getting into the house and not have to spend more money later. Buyers don't want an unknown expense hanging over their heads. Not a lot of buyers are looking for fixer-uppers because with most transactions, buyers have limited amounts of cash and don't have the money or time to do a fixer-upper.
Rock-bottom Bargains

Buyers are more focused on negotiating, setting limits in their mind and focusing on how to get the home they want. And, of course, many buyers just really want a great deal too. Buyers want value and are very picky. They know they don't have to settle. If you're a seller you may want to become really focused on home repair, updating, cleaning and staging.

The more-for-less approach even holds when buyers consider bank-owned properties as well. They want the short sales and the foreclosures, but they don't want to paint, put flooring in, or clean. And, buyers will keep searching until they find the ideal situation.

Outdoor Living Areas

The thing that we've also seen over the past couple of years is more outdoor living areas. Some popular features have been outdoor kitchens and two-way fireplaces. If a house already has this, it's a selling point and it will be a more competitive property on the market.

Incentives

Along with pricing, it's all about incentives. To gain buyer interest, sellers offer everything from gift cards for new furniture and paint to financial assistance at closing. This naturally has made things more difficult for sellers. Not only are buyers asking them to lower the price, but they are asking for a lot more, complicating negotiations.

Practical Green Features

Buyers are also looking for things that make the home easy on the planet, as well as the wallet. Items like triple-glazed windows, high-efficiency boilers and energy-efficient appliances are some items on this green list. The buyer of today wants to make sure that the ongoing operating costs of the house are as controlled and economical as possible.

Buyers are also considering the sun exposure in relation to energy efficiency, which will vary from region to region. In Southwest Florida, you may want larger overhangs to minimize the sun. While up north, you want lots of windows on the southern side to maximize the sun.

Open Kitchens

Apparently, the wall between the kitchen and the family room is going away. The kitchen is now part of the gathering space. Families and friends are now congregating here and it's become the social hub of the house. Buyers like a material that looks or feels natural, even if it's not the genuine article. Granite counters are still popular, but it doesn't have to be the real thing. It can be stone, another natural material or something that looks like stone. There is a trend with using reusable materials as well. Also, some original uses of hardwood, like pine flooring and glazed terra cotta slabs, reused for countertops.

Smaller, Less Formal Homes

Buyers are buying smaller homes, but they want to be able to use every inch of space and make their use of space efficient. Formal spaces that might only be used three or four timesÂ per year are disappearing. There is now a repurposing of space. For example, formal living rooms have been added to great rooms or converted into home offices or entertainment rooms. Buyers are being much more realistic about what they can afford and how much responsibility they want. Things to consider include how much house to clean.

Touches of Luxury

Buyers still like luxury. And, sometimes the amenities that convey that feeling of living large are relatively simple or inexpensive. Here's one interesting example: coffee bars in the master bedroom to resemble a butler's pantry in the bedroom. This feature has been popular, especially in high-end homes for several years now, but is now being seen in less expensive homes. Another luxury touch now seen in less expensive homes are high-dollar finishes, such granite counters and stainless steel appliances, marble tiles in the bathrooms, and under mount sinks. Buyers also like a living space where you can have barstools and entertain.
After reading this article, you may know exactly what you want. Or, you may be more undecided than ever! Whichever you feel right now, you know it is a great time to buy in Southwest Florida and take advantage of all you can get in a home purchase! As always, just be sure to have a great Realtor that know the market well and can help you find what you want at a great price! (8-20-2011)

Home Prices Cheapest in 40 Years, but is ownership declining?

By D. Michael Burke

Nationally-speaking, it seems like now more than ever home prices are at the lowest they've been in forty years according to Bloomberg BusinessWeek. However, potential buyers nationwide are taking the option to lease instead of Buy. But why? Especially when home prices are affordable for many that otherwise could not afford a home, specifically here in Southwest Florida. The point is why rent when you can own, right? It seems like a no-brainer. However, here are what some are saying despite the obvious good deals that are out there right now.

In the last few years, many have watched their home values get cut in half, and it is true that many people have lost their homes. It's almost as if the American Dream of home ownership is slipping through our finders before our very eyes.

The most affordable real estate in a generation is failing to lure buyers as Americans sour on the idea of home ownership. At the end of 2010, the fourth year of the housing collapse, the share of people who said a home was a safe investment dropped to 64 percent from 70 percent in the first quarter. The December figure was the lowest in a survey that goes back to 2003, when it was 83 percent. But this would seem typical for a national housing market crash, wouldn't it?

Unfortunately, the magnitude of the housing crash caused permanent changes in the way some people view home ownership. Even as the economy improves, there are some who will never buy a home because their confidence in real estate is gone, which may be a bit hasty. Never say never!

Worse Than the Depression?

Historically, homes have been a safer investment than equities. During 2008, the worst year of the housing crisis, the median U.S. home price declined 15 percent, compared with a more than 38 percent plunge in the Standard & Poor's 500 Index.

Americans stay in their homes for a median of eight years, according to the National Association of Realtors in Chicago. Someone who bought a home in 2002 and sold in 2010 saw a 4.8 percent increase in value, based on the annualized median price measured by the group. The average annual gain in the past 20 years was 4.2 percent.

Falling prices have made real estate the best buy in at least four decades. Housing affordability reached a record in December, according to National Association of Realtors data that go back to 1970. The group bases its gauge on property prices, mortgage rates and the median U.S. income.

The median U.S. home price tumbled 32 percent from a 2006 peak to a nine-year low in February, data from the Realtors show. The retreat surpassed the 27 percent drop seen in the first five years of the Great Depression, according to Stan Humphries, chief economist of Zillow Inc., a Seattle-based real estate information company.

Not 100% Risk-Free

If we've learned anything, it's that housing is not a risk-free investment. Everyone knows someone underwater in their mortgage or struggling to sell a home. About 11 million U.S. homes were worth less than their mortgages at the end of 2010, according to CoreLogic Inc., a Santa Ana, California-based real estate information company. An additional 2.4 million borrowers had less than five percent equity, meaning they'll be underwater with even slight price declines, according to the March 8 report. The two categories add up to 28 percent of residences with mortgages. But when is purchasing a home 100% risk free? Even when the market was at its peak, there were still risk factors as with any home purchase.

Future Plans for Homebuyers

The share of Americans who said they plan to purchase a home in the next six months tumbled 23 percent in March, according to the Conference Board research firm in New York. The National Association of Realtors probably will say tomorrow that existing-home sales were at a 5 million annual rate in March, up 2.5 percent after a 9.6 percent plunge in February, according to the median estimate of 74 economists surveyed by Bloomberg.

Work began on 549,000 houses at an annual pace in March, up 7.2 percent from the prior month, figures from the Commerce Department showed today in Washington. The gain failed to make up for ground lost in February, when starts fell to the lowest level in almost two years.

The drop in homebuyer confidence may be temporary. Home sales probably will rise 4.1 percent to 5.1 million in 2011, with the biggest increases in the second half of the year, the Mortgage Bankers Association said in an April 14 report. In 2012, sales may climb 5.9 percent to 5.4 million, the highest pace since 2007, the Washington-based trade group estimated.

A rebound in home sales depends on the availability of jobs, the mortgage association said. The unemployment rate probably will decline every quarter of this year and next, falling to 7.9 percent by 2012's end, the trade group said. It was 8.8 percent last month, the lowest in two years.

Improving Employment may be the Key

On the bright side, purchase activity will pick up slowly as the improvement in the job market eventually leads to greater willingness to buy.

Borrowing costs are at historic lows. The average U.S. rate for a 30-year fixed mortgage was 4.69 percent last year, the lowest in annual data going back to 1972, according to mortgage financier Freddie Mac, based in McLean, Virginia. The rate in March was 4.84 percent, the company said. By 2012's fourth quarter, the average fixed rate may rise to 6 percent, according to the Mortgage Bankers Association.

However, if you can jump through the hoops to get a mortgage, and there will be hoops, then this is an amazing time to purchase real estate. There are going to be a lot of people kicking themselves a few years from now because they didn't take advantage of the low prices and the low mortgage rates, despite the usual risks.

Tighter Lending

Cheap financing hasn't done enough to boost home sales in part because lenders are being more selective with applicants, according to Federal Reserve Chairman Ben Bernanke. Federal policy makers have described the housing market as "depressed" in statements following their last eight meetings.

Although mortgage rates are low and house prices have reached more affordable levels, many potential homebuyers are still finding mortgages difficult to obtain and remain concerned about possible further declines in home values according to Bernanke said in Congressional testimony last month.

The share of banks reporting tighter mortgage standards in the first quarter rose to 16 percent, the highest since 1991, according to the Fed's Senior Loan Officer Survey.

Federal regulators are proposing rules that may make lending even more stringent, including a requirement that banks and bond issuers keep a stake in home loans they securitize if the mortgage borrowers have imperfect credit and down payments of less than 20 percent. Borrowers who don't meet the criteria would pay higher rates to compensate lenders for risk.

Fannie Phase-Out

As mortgage requirements rise, rates could follow as Congress and the Obama administration consider phasing out government-controlled Fannie Mae and Freddie Mac. The companies hold federal charters mandating they increase the availability of mortgages through securitization. In Fannie Mae's case, that order goes back to the Great Depression, when it was created as part of President Franklin D. Roosevelt's New Deal.

There are a lot of unsettled policy issues on the table right now that, if they're not handled right, could further set back the housing market. Fannie and Freddie have historically lowered interest rates, and eliminating them will increase the cost of home ownership.

Lowest in Decade

The U.S. home ownership rate dropped to 66.5 percent in the fourth quarter, the lowest in more than a decade, according to the Census Department. The rate probably will retreat another percentage point by 2013, according to Meyer, of Bank of America Merrill Lynch, and Lea, the finance professor. That would put it back to a 1997 level.

All in all, people will still aspire to own their own homes, but they'll just be a lot more practical about it. If you're looking to buy in Southwest Florida especially, you're still making a wise decision and you'll be able to pick up a great deal! Just be sure to hire a professional Real Estate Agent who knows the area and can help you sift through the market and find a great buy!

Who is working for and with you?

Agents wear different hats when it comes to representing buyers and sellers, depending on state law. Requirements by the agents' real estate company and the agents' personal business practices differ further. Just because an agent puts you in their car and drives you around for several weeks looking at houses doesn't necessarily mean they are working for you at all. Rules and laws around representation are very specific and usually confusing.

Avoid this mistake by understanding agency law in your state is critical to knowing how (or if) the person helping you house hunt is working for the seller, working WITH you or working FOR you. It is codified in each state, and there is little consistency between states. And always ask for a buyer agreement, in writing. It's not always the law, but it's always an option you should exercise for your protection.

Saving money is always about hiring the right people.

For most buyers, a home is the single biggest purchase they will ever make, and hope, fears, dreams and equity often get tied up in the transaction. The number of buyers wondering how to go through the process without professional help was frightening. Even with continuing education requirements, keeping up on daily news, keeping up with new legislation, going to education seminars and conferences and doing the business daily, real estate is a moving target. Thinking you'll save money by going to the listing agent directly, or buying yourself, is penny-wise and pound foolish. Any buyer agent worth their license should be able to save a buyer thousands of dollars with simple, good negotiation and knowing what is usual and customary in the local market.

Avoid this mistake, by knowing how much earnest money is required locally, how much an initial offer "should be" and when someone can get out of a contract. Few people know these answers and they are different in every area, not just every state. Hire someone who knows the ropes and wants to teach you why they are recommending what they do...you'll be a savvy buyer and will save money.

Don't get put in a bad position by not being in the know! Hire a professional REALTORÂ® with years of experience to help you buy or sell your property and get the most for your money.

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