Tuesday, April 30, 2013

New Vista Properties, the Acorn doesn't fall Far From the Tree

The following blog has been modified at the request of New Vista's President, Bob Erling. Mr Ehrling points out that my memory may be flawed, that he was not involved with this sort of sales, but he did apparently engage a master broker whose role was to call on Realtors with the idea that the local agencies would be a fine conduit of leads to sell the lots in question. In an email received today, Mr Ehrling goes on to say that the company that I have mentioned in my April 30th article was not New Vista, nor was the call I received from New Vista, and further it was not a New Vista tour I took.  Here I quote him, "As a "real estate professional" I'm sure you can see how unfair it is to weave your unconfirmed story into the erroneous story written in your local paper and even refer to us as "these guys" and "the boys from New Vista."

I must say Mr Ehrling's insistance in my making the changes in this matter is both complimentary to me, in that the readership of this blog is minimal at best, and proper for the sake of accuracy in that it is possible that the "New Vista sales team" that I met may not have even been employed by him, but were in fact only a commissioned outside contractor, loosely using his name. Because I didn't agree to represent them, I have no paperwork to pinpoint who my "host" was.

The story, in case you somehow missed it partly follows: One dreary November day I was sitting in my real estate office looking out the window at the dusting of fresh snowflakes on the parking lot when the phone rang—this was 10 years ago in New Hampshire.  The voice on the other end said he was calling from Florida, I thought he said he was from from a company called New Vista Properties, but maybe he only implied that...but he did say he was looking for a few NH based Realtors to help sell vacant lots in Florida's Charlotte County. I liked the concept right away.

The offer was—well—too good to refuse.  “Come on down here and see what we have,” said the voice.  “We’ll give you an all-expense paid trip to Florida, over a weekend.  Fly down on a Friday and go home Sunday, all on us.” Ehrling says this never happened.

In answer to my many questions of what the weekend was to hold, he told me that he represented a Florida land developer; they had some 5000 lots, and crews to build houses. My role would be to funnel interested New England buyers to them and they would pay me a referral fee of 10% and take the buyers from there. 10% was about 8% more than I would get for doing a similar thing in New Hampshire.

My answer was that my partner (who is my wife in real life) and I would come to evaluate their offer and the properties, and to hear the offer in a face-to-face meeting with the “management team”. And so the event was scheduled, this was November 2003.

As it turned out there were non-stop from Manchester NH to Ft Meyers where they met us—and 9 or 10 other folks at the airport. The other folks who were a part of our “group” were from Canada New York and Europe. There were German Realtors, Brits, and a couple from France as I recall. Most of us owned real estate firms or were “estate agents” who could focus on bringing in new buyers.

We were given VIP treatment, and once we were all rounded up, we took a “unmarked company” van to North Port, where we were shown a few model homes and then whisked off to cocktails at the hotel in Port Charlotte, where we were both staying and where the “management team” wanted to welcome us. It was pretty clear by this time that they had done this kind of thing before and were good at the planning and execution.

After cocktails we were invited to have dinner in the dining room—“we can't join you, but just charge it to the room—order from the dining room menu or room service, you’re on your own for dinner,” said the marketing manager “Get some sleep tonight, we’ll see you at 9 AM to go out and look at the lots.”

The next day at 9 the company van picked us up and took us to a huge pontoon boat docked at a marina in El Jobean, and took us on a boat ride through the canals of South Gulf Cove. The marketing guy led the discussions about which lots were “ours” and the lot pricing was on everyone’s mind. I could see the interest from my fellow real estate sales agents. And of course I was interested too. These were nice lots.

We returned from the boat ride just before noon and were taken to Boca Grande to a little beachfront restaurant for lunch.  We walked the unspoiled beach, waded in the Gulf briefly and then back in the van to go see North Port—where there were another 3000 lots.  Finally, back to the hotel, with the instructions that the “developers” would meet us Sunday morning—they wanted to show us a presentation and discuss the offer they had for us. And if we liked it, they would ask us to agree to become a bonafide representative of theirs in our own area.

That evening my wife and I walked the half-mile to the Fisherman’s Village waterfront bar and talked over the opportunity. On the walk back I found a newspaper vending box and bought a paper.  Remember 10 years ago was a long time before smart phones and hotel emails. That night in the hotel room I read the classified ads in the paper and discovered a bundle of lots for sale in the very areas we had driven through earlier that day; but what stuck with me most was that the price of lots for sale in the areas we had been looking at were for sale in the newspaper for significantly less than our hosts were charging—I mean MUCH less.

Listen, when you come right down to it, there's no law precluding overcharging a buyer in a real estate deal. A contract is a contract, if I offer you a watch for $100 and you accept the offer, we have a deal. If I offer you a bridge for $100,000, and you accept the offer, we have a deal. So if I offer a lot for $30,000 and you say yes, well that's how it's done. Due diligence allows a cooling off period for the buyer to review his decision, but as the law says, let the buyer beware--caviet emptor. 

Well, we didn't sign up to become a representative for our hosts, but we still happened to move to the area—a decision we made largely through that November weekend with the salesmen who claimed to represent New Vista, but then again maybe actually didn't.

Dane Hahn is a real estate professional serving Sarasota and Charlotte Counties. You can reach him at 941-681-0312 or at dane.hahn@gmail.com.

Sunday, April 21, 2013

A Quarter of Florida's Real Estate Sales Are to Canadians

This week Canadian Wealth magazine had a piece that covered the Florida real estate market. Because they report mostly to Canadians,  their view of us if from 1550 miles away. Sometimes that makes for errors, sometimes clarity. But in any case, their reporting is motivating buyers from Canada to come to Florida and purchase real estate.

From the pages of their article, they wrote (and I quote), Florida experienced one of the biggest property booms in America. But lax lending policies coupled with borrower greed led to massive growth in a relatively short period of time. Despite the meteoric rise in prices, many believed that market couldn’t fall. But when the U.S. market imploded, Florida was one of the first states to crash. And, like the rest of the country, many watched helplessly as prices and demand plunged.

As ‘Foreclosure’ and ‘For Sale’ signs popped up like weeds, many Canadians – retired snowbirds and keen investors alike – started taking interest. Florida prices plunged more than 40 per cent peak-to-trough on the FHFA Index and top destinations such as Orlando experienced a 56 per cent drop in prices from an average $258,000 (U.S.) at the peak, down to $113,400 in 2011. Rock bottom prices and a high exchange rate made purchasing U.S. property an attractive proposition for northern neighbors.

According to the National Association of Realtors, nearly a quarter of home sales in the 12 months ending in March 2012 were by Canadians.

Times, however, are changing. A 2012 report from BMO indicates that while the housing market in Florida is relatively stressed, the worst is over. “Florida was one of the epicenters of the housing bubble-bust cycle, but there are mounting signs that a recovery is under way,” it said.

Economists indicate that the Florida economy is recovering at a modest pace with real GDP expected to grow 1.9 per cent in 2013. Unemployment is trending down, but it is still an above-average 8.7 per cent. Certain pockets of the housing market are showing promise, with prices in Miami and Tampa bouncing up 9 per cent from their late-2011 lows. Another positive sign is a reduction in the supply of homes.

There are bidding wars and multiple offers on almost every property. As long as a home is not overpriced, the market has delivered a buyer within the first week of listing and sometimes it’s sold before it even hits the public MLS. Building starts are up and more and more people are paying builder prices for a new home due to the lack of inventory available.

However, it should be noted that the foreclosure rate is still the highest in the U.S. at 13.7 per cent.
Overall, Florida’s housing market is one of the most stressed (second of 50) in the country, behind Nevada, but a draw down in inventories and upward price momentum are positive indications that the worst is over.
We may be seeing the beginning of the end for Florida’s negative market cycle, Florida Home Finders of Canada vice president Brian Ellis, says it’s not too late for Canadians looking to buy.

Most savvy real estate investors will tell you the best time to buy is just when the market has turned a corner and is starting to go up – and that’s where Florida is now. All of the factors that have made U.S. property an attractive real estate proposition still hold true; Florida real estate prices are low, the Canadian dollar is strong, and low interest rates at home make it easier for Canadians to equity out of their home and put cash down on a U.S. property. The only drawback to the Florida market, says Ellis, is that this situation will not last forever.

Canadians have to jump and they have to jump fast if they want to take advantage of this marketplace.
Florida has unique economic advantages that set it apart from other destinations. Florida – which is already the fourth largest state in the country – has long been one of the fastest growing regions in the U.S., and by the next census will surpass New York to become the third largest state in population.
Florida’s attractions make it one of the top tourist destinations in America and its weather will always be a selling point for retirees looking to escape cooler climes. As Jerry Seinfeld quipped, “my parents didn’t want to move to Florida, but they turned 60, and that’s the law.”

There is no state tax for individuals and business structures in the state, making it attractive for entrepreneurial activity. Major changes to the Panama Canal – which will allow container ships to reach Florida in 2014 – will make the state a stopping point for distribution of imports to the Eastern Seaboard. And on top of that, major inter-modal expansion is being planned for Central Florida.

The recovery in Florida is not happening uniformly across the state. As a top tourist destination, Orlando is starting to benefit from a recovery in tourism-related employment and expansions to Disney World’s Magic Kingdom Park, SeaWorld Orlando, and Universal Studios Florida. Meanwhile, Miami is experiencing a turnaround in prices, thanks in large part to foreign investment. The Miami Association of Realtors reported a 34 per cent increase to $160,000 in median sales price of condominiums in Miami-Dade County in 2012 over the previous year.

The hottest market is currently central Florida, from Orlando to the Tampa region, with returns yielding on average 8–12 per cent. In the south Florida market returns are less, ranging from 6–10 per cent, but appreciation and prices are much greater. However, it depends on the investor’s appetite for risk and investment goals.

80 per cent of Canadians buying real estate in Florida are purchasing condos. Condos allow owners to lock the door and walk away and not have to worry about the exterior maintenance. So that’s what most Canadians are buying. Vacation rentals are also a very popular option right now for those not as concerned with the short-term return but are looking to win big on the capital gain over the long run.

Dane Hahn is a real estate professional serving Sarasota and Charlotte counties. You can reach him at dane.hahn@gmail.com or by phone at 941-681-0312.

Sunday, April 7, 2013

Rain Brings Good Fortune, Honest.

Florida has suffered from no rain for months, which keeps the Snowbirds happy, but for those of us who live here (most of the year) it's been a long dry spell. So after this long drought, we were pleased to see it rain hard almost all day Thursday and even overnight into Friday morning. And Friday was the day that I had a closing in my own neighborhood between a really nice couple from Maine and a neighbor I had recently come to know as a seller for whom I was the listing agent.

I listed that house about 6 weeks ago, and the market being what it is, I had a showing there nearly every day—sometimes 2 or three showings the same day until a buyer was found. My seller was a bit difficult from the very start, and would not agree to leave the home when there was a showing. He felt that he could answer any question a buyer might ask, and he had no place to go anyway, plus his dog apparently didn't like riding in the car.

Left at home the a barking dog wanted to jump up on every visitor, we did manage to have the dog caged for showings. But my lister, living alone with no one else at home—well, he liked to talk. My opinion was if his dog didn't scare away buyers, he might easily talk a buyer out of buying his house. My own conversations with him always seemed to come around to his getting a deal on this item or that. He would wax eloquently about his conquests on Craig's list, or how he took care of his own pool with acids and chemicals he would be leaving in the garage for the buyers.

It became evident that if the house were going to sell, I could not have him and the dog at home by themselves. And because they wouldn't leave, I would have to accompany any showings and act as a buffer between him and any agent or client who wanted to see the property. This is NOT the way we Realtors would like to run our business, today a real estate agent usually puts a lockbox on the front door, and when a showing is requested, tells the owners to go for a drive, or go shopping (or some similar suggestion) so the house can be shown in peace and quiet.

The electronic keys that we Realtors use unlock the house are smart keys and tell the listing agent which Realtor was the one that accessed the house and at what time of day they went in. About the only thing they don't monitor is how many people came through at the showing. So when a Realtor makes an appointment to see a house, the listing agent knows who is coming and when, and when the electronic key is used, it confirms that agent opened the door and at what time. This provides a good sense of security to home owners and limits the liability a real estate agent would assume if he or she let “just anyone” into a home. But we had no lockbox for this home, or even a key for the Realtor because he was always there.

But again, that was not my biggest problem. My biggest problem was the inability to provide a good showing environment. I would arrive for showings early to be sure the place was straightened up and turn on the lights. My lister would follow me around his house turning off the lights I was turning on. I would move the dog's food and water bowl out of the way to the garage, and part-way though a showing, it would magically be back in the traffic pattern. But it was a nice house, well priced, and soon enough a buyer came forward.

Once the buyer was found, he became worried about the home inspection. “What if they want me to fix things—I'm not going to,” he told me. More Realtor headaches come from this sort of attitude than almost any other. I work hard for my clients, and frankly I want them to do their part. But this seller made this a difficult transaction.

The bad news was the home inspector found a half dozen issues that needed correction, and the seller was good to his word, he wouldn't make the repairs. The good news was the buyers understood that the total expense to make the corrections was minimal and agreed to accept a sofa bed in trade instead of demanding the repairs. So, as they say, “all's well that ends well.”

And back to the rain. Some years ago I was a party to a sale of several churches. The other agent was a Native American, full-blooded Wampanoag Indian, and chief of his tribe. There were many spirits with us the day we closed the transactions with the Methodists and Presbyterians, and it was raining hard with thunder and lighting as we met to finalize the transaction. My Indian friend asked for a moment to “bless” the proceedings, and time was granted by the several ministers and clergy in the room, who normally would have handled this religious aspect but were upstaged that day. My Indian friend went on to ask for blessings on the parties and to say that Native Americans see rain as a blessed omen, it signifies cleansing and rebirth. This week at our closing I was able to take a moment and share the Shaman's thoughts--if not quote his exact words--that luck and good fortune, and a complete cleansing will favor the home and it's new owners.

For the seller, he's starting again too, this time in Delaware, and we all wish him well.

Dane Hahn is a real estate professional practicing in Sarasota and Charlotte counties. He can be reached at 942-681-0312 or by email at dane.hahn@gmail.com. See him on the web at www.danesellsflorida.com