Archive for January 4, 2012
Florida Real Estate – The Sunshine State
Florida real estate is definitely worth a look if sun and fun is your ticket. Florida real estate, even close to the beach, is a very good deal.
Florida
Florida is a well-known haven for people living through winter storms in the northeast. Sun and warm water are an obviously attraction, but there is much more to Florida. Orlando seems to be one giant theme park with Disney World, while Miami offers entertainment of a distinct adult variety with a legendary nightlife. Throw in the Florida Keys, tons of college and professional sports teams, the Kennedy Space Center and you have a state with a lot to do besides loaf on the beach. Then again, loafing on the beach should never be denigrated!
Miami
Miami is a city that really needs no introduction. With Cuban influences, the city is an explosion of styles, colors and fun loving people. Palm trees are plentiful as are beaches, bars, outdoor cafes and walking streets. When you need a break from the beach, Miami hosts professional sports teams in baseball, basketball, hockey and football. The real key to the area, however, is simply the festive atmosphere and people. Nearly half of the population is Hispanic with a heavy influence appearing throughout the city. Every day is a party in Miami.
Orlando
If Orlando isn’t the capital of theme parks, I feel sorry for the place that is. Orlando is home to no less than Disney World, Universal Studios and Sea World. The theme parks are actually located on the edge of the city, which makes Orlando proper a bit bland. Humidity can be a bit of a bear during the summers, but the winter is incredibly nice.
Tampa
Tampa is an underrated city in my opinion. The chief criticisms seem to be it is overly modern and a bit boring. In fact, it is just the opposite. Tampa has a funky cultural feel, particularly in Ybor City where multiple cultures clash in free wheeling fun and you can get a Cuban cigar hand-rolled by a Cuban artist. Museums, art galleries and theme parks abound. The beaches of Clearwater are white, clean and a good place to roast in the sun.
Florida Real Estate
Florida real estate is very reasonably priced considering much of it is so close to an ocean or lake. The average home price in Orlando will run you just above $300,000, roughly the same amount as Tampa. In Miami, prices vary wildly depending on the part of the city you are looking in, but you can expect price ranges from $250,000 to $800,000.
If you want to get in on Florida real estate, now may be an ideal time. For 2005, property in Florida appreciated at a rate of nearly 25 percent!
Real Estate in Florida – Boom or Bust
In the first few years of the real estate boom in Florida, buyers went crazy at the sight of empty houses and plots for sale. Speculators bought under-construction apartments but after 2005 the frenzy subsided. Price undercutting, falling sales and auctioning of properties were as rampant as defaulting on mortgage payments and foreclosures.
While beaches, amusement parks, casinos, nightclubs in their proximity do help make lucrative sales when it comes to real estate purchases, yet buyers today are exercising more caution. For bargain hunters too, the time is right to cash in on a property and cash out eventually once the market heats up. Discounting is prominent where sellers are desperate to get the property off their hands. Massive price cuts in a bid to lure buyers result.
Southwest Florida witnesses prices for properties on golf courses or in their proximity or even closer to the waterfront steadily rising. Conservative architecture on the other hand is being pressurized and prices elsewhere are tumbling fast. Brokers involved in selling existing properties are competing with those selling newer ones and the situation is getting more difficult for the former who have to compete with upgrades and generous incentives of the latter.
While smaller cities in Florida State are faring better than those cities with not much development, they are being spared the impact of the real estate bust. Florida Keys is one area which is witnessing restrictions in new construction because of a shortfall in land available. Naturally investing in residential real estate has also fallen in response. However, there are adequate brokers willing to bet that buyers will have the purchasing power to invest in a spacious second home between Miami and Florida Keys.
In the soft market, conditions are such that there is no saying what kind of properties will be lapped up and what will remain unsold. Property auctions though allowing the sellers to get some returns on their investment are highly unpredictable. If the piece of real estate is at the lower end of the investment hotspot, there is a chance it will get sold, for a buyer can either rent it out or build on it. Speculating on a bigger property has its risks with no knowing of which way the market may turn.
Seeing this, a question that echoes in many minds is how long will this downturn continue? The higher priced and top of the pick real estate properties are queuing up and by the end of 2008 the numbers will increase. Though the purchasing power of the rich has not been affected there is a limit as to the number of residences even the millionaires will want to invest in, in Florida. So where are the buyers?
Some of the key problems of real estate investing in Florida stem from the high property taxes and home insurance premiums which soar post hurricanes. In the event of these being resolved, Florida’s real estate market is all set of witness a second boom. Those of us who have been watching the trends very closely especially in Florida agree that it is just a matter of time.
Real Estate Agent – How They Make Money
Have you ever wondered how your real estate agent gets paid? Sure, there is talk of commission, percentages, fees, closing costs- all of these are broken down at closing. But, what does he actually get? Surprisingly, you do not pay your agent a commission. Only a licensed broker can get paid a commission and he is the one who pays your agent. There are also a number of ways to divvy up the pay. The person who worked so hard to sell or find your house may not be making as much as you think. Here are some of the ways the money makes it to your representative:
A real estate agent works for a licensed broker or brokerage house. When he brings a client to the table, either for buying or selling, an agreement is signed between the client and the brokerage house. Typically when a sale is made, an average of 6% of the sale price is commission for the brokers. It is not always a straight split, but close to half, which goes to the broker representing the seller and the buyer.
Once the commission is divided up between the houses, the brokers then decide how much to pass down to the agent who actually did the leg work. This amount varies depending on experience, time with the company and the productivity level of the representative. A brand new representative may only get thirty percent of the cut where as a seasoned pro that brings in a ton of business, may get half or more of the proceeds.
Another option is that the agent gets all of the commission, but pays a monthly fee to the brokerage house. This is sort of a rent. He gets an office and uses the company name to back his reputation. This is an attractive deal to many representatives, because they pay the same amount every month, no matter how much they make. For new people to the business who have not built up a client list and do not benefit from word-of-mouth yet, the traditional split is usually preferable, because they may not make enough every month to make the set payment.
There are some factors that eat into the final profit made by the brokerage house and the representative. If the house is a franchise, there is a fee that must be paid to them out of every commission. Sometimes referrals come into play as well. If a brokerage house sends a customer to you, they will want a referral fee. There is a percentage that also comes out of the commission.
Typically, this commission is paid by the seller at closing. However, depending on the type of market, this is negotiable. Another negotiable point is how the commission is divided. If you are having a difficult time in selling, because the market is flooded with houses, you may want your representative to offer a bigger cut of the commission to the buyer’s representative. This may help close the deal.
So, as you can see, there is more to the payment than simply figuring 6%. After everyone else gets the money, your real estate agent is then paid the amount.