Tuesday, October 26, 2010

The Golden Egg


One of the most frustrating and difficult aspects of being a REALTOR in Miami is what I like to call the "Golden Egg Syndrome". This is the misplaced myth that there is always some other REALTOR that may have a "special", "unique", and/or "private" listing (property) that nobody else has. This mistaken belief is founded on deep seated misconceptions amongst most consumers of what a REALTOR really does and how he/she does it. To the horror of some REALTORS, and to the elation of many other of us, I will give you a slight insight on how our business works so that it can help you understand what you actually have to consider when choosing an agent in any investment or apartment-searching.

Let me put it in very simple terms. Every single REALTOR that you speak to will have access to the exact same properties than any other (this is true at least 99% of the time). Every single REALTOR will be able to show you the same properties. Every single REALTOR can negotiate fairly easily to lower the listing price on any of said mentioned properties on your behalf. This is because MOST properties that wish to be sold/rented quickly and effectively, will be placed on the Multiple Listing System. This system is there to help units move quickly by sharing themselves with every single agent who is a member of a REALTOR association. This is good for EVERYBODY involved and it means that we all have the same "inside scoops" on new properties, status changes, price drops or hikes, etc. The ones that are not listed in this system might exist, but most agents don't deal with them and you as a consumer will probably never come in contact with them.

This means that if you already started with one agent, and he has done the work for you and showed you particular properties, you are truly wasting your time if you really think that by having 4 of us looking simultaneously, you will be able to get any different results. If a REALTOR shows you all available properties within a particular margin you specified, the only difference between him and a "new" one would be how he approaches your requests, or his ability to convince you to step away from some of your harder requisites, etc. But in essence, you are really dealing with professionals who all share the exact same information on the market. You are truly walking in circles without even knowing it.

Is there a difference then? Of course! It is called SERVICE.

As an example, you can buy the same stocks from the same company from any broker in Wall Street, but what you want is the trust, loyalty, and hard work that said broker will provide you. You want somebody who will assure you that he/she has your best interests in mind and that he will guide you through said murky waters to your benefit. Finding this is obviously more difficult than it sounds, like most things worth anything, but when you do find it, you better hold on tight.  A good agent can make the difference between aggressively pursuing listings, creatively coming up with ways of fitting you into the unit that you like, and a good eye to recognize what you will and will not like without making you waste time walking through countless properties.

What you have to look for in a REALTOR is the comfort of somebody you can trust will do all the work for you so that in the end you can find the right match. You need to also learn to listen to your agent when he tells you that certain properties should be taken quickly without much wait, since this means that he/she understands how the market is moving. Do not presume that this is the REALTOR's "sale's pitch" to get you into a property for his benefit, or that he is being "pushy". Usually, most REALTORS will make their commission on your investment no matter how long you take (if you actually use him until the end of course). If you are convinced that your agent is educated and sophisticated, then you have to trust his/her advice and understand that you might be inadvertently wasting your (and his) time searching for that infamous "Golden Egg" that truly doesn't exist.

A lot of times, an agent works hard for you to find the right property, spends his time negotiating trying to find you the best deals, and then the client suddenly finds a listing in some advertising that sounds "amazing" (usually on Craigslist), calls said agent, and he ends up doing exactly the same thing that the other agent did but now gets the commission on the coat tails of the other REALTOR's work.

News Flash folks. Most posts on Craigslist either don't exist to begin with (that is why they sound so great) or they are old listings that are gone already. For most agents, these ads are the only way to get clients calling looking for help. But please trust me on this one, if you have an agent that tells you that there is no 2/2 with direct water views on Brickell for $1100, THERE ISN'T. We all look at the same screen, we will all tell you the same thing, and we have absolutely no "hidden agenda" to screw you out of anything that you really want. On the contrary, such golden eggs would always move fast, something that all agents love.

As a consumer, find an agent that you feel cares enough to listen to your needs, asks all the relevant questions, works hard to tailor said needs to the available properties in your area of interest, and is responsible and diligent enough to get you to the properties quickly so that he can negotiate aggressively on your behalf and get you moved in. You also want somebody who answers your calls or at least responds quickly to your messages. You want somebody who constantly calls you to let you know of any new developments. Somebody who dedicates time to educate you about real estate, how the market is working, and helps you adapt your expectations to it.

The true Golden Egg is not an illusory fake property that you expect will appear eventually around the bend, but the REALTOR who dedicates himself to help you find the right property.

Home Association Foreclosures??

kicked-outTo many people who are new to South Florida (either as investors or second home owners), the concept of a Home Owner's Association (HOA) foreclosing on a property, before the bank even considers doing it for themselves, is a very weird concept. In many states, the HOA is not able to go above the bank in a foreclosure, which is why many attorneys in those states tell their clients to stop paying their HOA while they negotiate with the bank (they rightly assume that the bank will end up paying for your dues anyway). This dynamic is VERY different here in Florida, and it can be both a benefit for interested investors, who may not need to wait for a bank foreclosure to make lower offers to struggling owners (nor have to deal with the complication/strings of a judicial sale), and a headache for an owner who suddenly finds him/herself fighting the association for their properties.

If you are an owner who is underwater on your mortgage, but can pay the HOA, I highly reccomend that you continue to do so. Most properties, even the most expensive in Miami, are not above the cost of paying the mortgage, and you will probably be able to stay in your home for a long time before the bank decides to foreclose.

But, if you make the determination to not pay your HOA, for whatever reason, know that the association will more than likely take you all the way to the foreclosure sale if you don't pay. Every association is different, but the end result is the same.

What can you do? You can force the association to stall their own action against you if you can shortsale the property, since this option will cover most of the dues owed to them without complicating themselves too much. If you want to learn a few tricks that I know of how to achieve this effectively, please contact me and I can help you in the process. My fees as a Realtor are paid by both the buyer/bank, so you don't have to worry about digging into your own (already hurting) pocket.

A lot of people seem to think that because their properties are expensive (above $800,000) their chances of negotiating or selling are more difficult, but I can assure you that this is NOT the case if you deal with the right people.

**If you want help in getting yourself out of your HOA mess, stay in your property for free while we negotiate with the bank and sell your property, please call me and I will help you through the process: (305) 342 9742.


Medicaid Transformation Grants
When it comes to those of you who wish to invest in great properties, you can benefit from homeowners that are facing the HOA in court (even better if they are in the earlier stages) and wish to sell before there is a judgement and/or sale date for their properties. I have personal knowledge of a couple of these very high end properties, some owned by corporations, that are ripe for investment. Not every building is great for this kind of purchase. If the building can't keep up with their expenses and are now in bankruptcy, you should always re-consider (or at least you should KNOW about it, so ask your agent).

Smart investing requires FOREKNOWLEDGE.

As a buyer, you may end up paying for some of the HOA dues, splitting fees with the bank, or covering other miscellaneous expenses (they are all contracted so don't worry), but these are clearly offset by the value of the investment. As such, these are part of your calculation. The good thing is that these deals are very flexible in how they come together, giving you a lot more flexibility in the process than most sales.

**If you are an investor and would like me to help you find GREAT investment opportunities in properties that are facing the problems mentioned above, call me and I will guide you through the process. Once you have the firm offer accepted, you will be able to sit and wait for the negotiations to end and acquire your property free and clear. Call: (305) 342 9742

You can also write me at: jcllovet@gmail.com