How to find and buy a house in the Ocala Marion county Florida area including 55+ retirement homes, golf course homes, short sales and foreclosures.

Ocala house hunting

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I get people who want to make a quick pit stop and check out a house or 2 on their way to a cruise ship or Disney. I assume this is unique to Florida but I think it’s a waste of time. A cross country move is a big deal and requires extensive planning. I know I moved all the way to Ocala from the western mountains of Maine. You shouldn’t even bother looking at houses in a city you’ve never been to. You should pick the city first. Then look for few communities in that city. Finally you look at houses.

How to make a low offer on an Ocala area home

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If you want to make a low offer on a home here in Ocala you have to give the seller a good reason to accept your offer. Here are a few things that make for a “strong offer”.

1. Cash. Cash means no finance contingency. The seller can be confident that their sale won’t blow up at the last minute because the loan gets rejected by the banks under writing department. Happens more often than you might think. Not all loan pre approvals are created equal.

2. AS IS. A contract that gives the buyer the right to inspect the home and walk away if the inspection is not satisfactory. The seller makes no repairs and knows exactly what they will net from the sale. Attractive to out of area sellers who would have a hard time getting repairs accomplished.

3. Fast Closing. A cash offer can close very fast, 7-14 days. The seller may not like the offer but is tempted by the fact that the deal will close fast and they can move on saving money in taxes, utilities, insurance, mortgage ect.

If you think that making an offer using a loan with little or no down payment, asking for closing costs or expecting the seller to throw in their furniture or a golf cart is the way to get a deal on a house then you’ve been watching way to many real estate shows on cable TV.


How to establish fair market value

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I spend about 95% of my time as a buyers agent here in Ocala. One question that comes up is “what should I offer?”. I suggest that a buyer look at comparable sales to come up with an offer. A good comparable would meet the following criteria.

same sub division

sold in the last 90 days

within 1 mile of subject property

+/- 10% of the sq ft of living area

same # of beds, baths and size garage

+/- 5 years in age, 10 years if home is over 10 years old

same construction type

All this above can be used by a buyer to come up with an offer on a home or it can be used by a seller to find a proper list price. In the end it doesn’t matter what a buyer or seller thinks a house is worth. What matters is the price that similar homes have sold for in the past 90 days. Sellers should keep in mind that in order for a buyer to get a loan a bank will send out an appraiser who will use very similar criteria for an appraisal.

There’s more to buying a house than just a low price

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Here in Ocala we have the lowest median home prices in Florida. We have foreclosures, estate sales and even great prices on traditional sales. I mostly work with buyers and I’ve seen 100’s of such homes.  I’ve come to the conclusion that it’s a big mistake to concentrate on just the price. Buyers don’t think enough about condition.

I think the big 4 are the age of the roof, the AC heat pump unit,  the flooring and the kitchen appliances. When looking at newer foreclosures I’d add landscaping to this list.

The roof. Standard shingles here last about 15 years. Some insurance companies won’t insure a house with a standard shingle roof over 15 years old. Architectural shingles are good for 20 years or so.  The heat of our summers give a roof a real beating.

The AC unit, which in most cases is a heat pump, is harder to judge. An AC guy told me that they can break in 5 years and I’ve seen them 20 years old.

Flooring is really taken for granted. To carpet an entire house, as can be the case in an estate sale or even a newer foreclosure, can cost as much as a roof. For some reason buyers who would walk away from a house with a bad roof will have no problem replacing flooring. Flooring prices vary a lot from builder quality carpet to tile and wood floors.

Kitchen appliances can be 20 years old in an estate sale and missing altogether in many foreclosures. Here again there is a big difference in price between builder quality and top of the line. I do think appliances are at the bottom of the list price wise though.

Landscaping is often totally absent in foreclosures. No shrubs or trees, dead sod in the front of the home and a back yard that never had grass in the first place because builders here for some reason give an amount of sod that won’t cover the whole yard. You don’t over seed a bad lawn here. You rip out the old sod and lay down new sod.  Mature trees and shrubs won’t add anything to an appraisal. However I owned a landscape company and I can tell you an extensive landscape job on the house in an empty field can cost as much as all the four items above combined! Curb appeal is what makes a house a home.

Am I trying to sell more expensive houses? No I just believe too many people are “Penny wise and pound foolish”. I’ve walked out of what at first appeared to be low priced homes and said to my buyers that they couldn’t buy that house cheap enough to make up for all the work it needed.

New home sales in Ocala Florida

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I often get buyers looking for newer homes here in the Ocala Marion County area. Many are interested in a new or newer Ocala 55+ retirement home. I end up telling these buyers that there has been very little building here since the market crashed in 2007. The reason for this lack of new construction is that resales are selling at prices below the cost of new construction and in some non retirement communities much less.

The below survey is based on active listings on the Ocala Marion county MLS as of July 7, 2011

Total residential listings 3915

new homes dated as 2011…..19

homes from 2010-2011………32

homes from 2009-2011………55

homes from 2008-2011……..114

homes from 2007-2011……..311

homes from 2006-2011……..571

homes from 2005-2011……..769

What does this all mean? It means that despite the fact that vacant land is available at fire sale prices and Marion County has suspended impact fees on new homes, builders still think it’s not worth trying to compete with newer resales. This is the time to but a house in Ocala.

The above numbers include both 55+ communities and non retirement communities and all types of construction including mobile and manufactured homes. They do not include homes offered by builders that are not listed on the OMCAR MLS.

Ocala median home price plummets 20%

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I’m writing this blog post in response to a recent article in the Ocala Star Banner about how the Ocala area has the dubious distinction of having the largest decline in homes values in the entire country in the 3rd quarter of 2010 as compared with the same period in 2009.

I thought the Star Banner article was too negative, just like most of their articles about local real estate. Low home values are bad if you’re a seller or a Realtor (my average commission is down 50% since 2006) but not if you are a buyer. Low home prices are great if you are a first time buyer or looking to retire here in sunny Florida. The Ocala area has a low wage structure and local people who couldn’t afford a home in 2006 can afford a home today. Homes in The Shores or Marion Oaks, built in the last 5 years, that originally sold for over $200,000.00, are now available as foreclosures for under $100,000.00.

The current median home price in the Ocala area is $82,000.00. I think this needs some explanation. The median home price is being brought down by really cheap sales. For example there were 77 sales in October under $50,000.00. Of this total there were 19 mobile homes, 27 were homes with fewer than 2 full bathrooms and 18 homes were smaller than 1,000 sq ft of living area. There were also 10 55+ homes in the under $50K category most of which were villas in On Top of the World.  Now there’s nothing wrong with homes like these. Every area needs extremely affordable housing. I’m just pointing out that homes in the under $50K range require compromises that not everyone might want to make and it’s these under $50K sales that are bringing down our median home prices.

Lastly I want to make a few comments about foreclosures. As you know I like foreclosures but I haven’t sold one his year. I showed plenty of them but my buyers elected to spend more money on traditional sales. Why was that? When my buyers looked at what it would cost to get the foreclosed home up to the same condition as the traditional sale they decided it wasn’t worth the trouble. If you’re interested in foreclosures you should prepare in advance. You need to know what it costs to replace carpet, install tile or laminate flooring, the cost of appliances or even an AC unit or roof. To a lesser extent this would apply to some 55+ estate sales too.

Ocala real estate a once in a life time opportunity

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Right now is the opportunity of a lifetime to buy an Ocala home. Here are 12 reasons to invest in Ocala real estate right now.

1. Interest rates are at historical low with no where to go but up.
2. Many Ocala area home sellers will pay part or all of a buyers closing costs.
3. Fannie Mae Homepath Financing doesn’t require an appraisal and also offers renovation loans for their Ocala and Marion County foreclosed properties.
4. USDA offers 100% financing with no Private Mortgage Insurance (PMI) on many Marion County homes. Mostly homes that are not in the Ocala city limits.
5. FHA loans allow the seller to pay many of the buyers closing costs.
6. Conventional loans rates are at all time lows. Local banks want to loan money to buyers with good credit. Don’t let anyone tell you different.
7. Foreclosures are selling at a 50% discount from 2005-08 highs.
8. Most Ocala foreclosures are in good condition and easily pass a professional home inspection.
9. Many “traditional sellers” have dropped their prices to better compete with distress sales.
10. In the 55+ communities there are always great deals on estate sales.
11. Estate sales also exist outside the 55+ communities and are a hidden secret often over shadowed by Ocala area foreclosures and short sales.
12. Principle, interest, taxes and insurance are often not much more than renting.

If you are a first time buyer, a renter, a retiree or investor now is the time to buy.

It’s termite swarm season here in Ocala

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Its termite swarm season again here in Ocala. As the weather warms up termites go out and look for a new home. You do not want that new home to be yours.

Termites cause $700,000,000.00 in damage each year here in Florida. Despite this scary statistic about half the homes in Florida have no form of protection.

There are 2 types of termites, subterranean and dry wood. The subterranean variety is considered the worst because they have much larger colonies and thus eat more wood. Obvious from the name they live in the ground and prefer moist conditions and wood. The subterranean termites enter your house through a sort of tube that connects their colony to the food source. Dry wood termites like dry wood, like the rafters in your attic. They have much smaller colonies and are harder to detect.

The University of Florida has a great web site dedicated to termites with loads of information and great color images. Take a good look at the pictures and so you can identify the little buggers if you see one.

 

There are several warning signs of a termite problem.

1. Little black winged insects about 1/4″ long that are attracted to lights at night.

2. Wings on your window sills and in spider webs.

3. Wood pellets, smaller than a grain of rice that is 6 sided when viewed under a magnifying glass. Yes, these are termite droppings.

4. Mud tubes look like mud caked to the side of a house and are actually engineered by industrious termites to create access to your house and their food supply.

There are several things you can easily do to avoid termite problems.

1. Have a termite inspection.

2. Keep fire wood piles well away from the house.

3. Water is your enemy and a termite’s friend. Check that gutters and down spouts drain away from the house. The same goes for air conditioners.

Termite control is not a do it yourself project. Homeowners should get an annual inspection by a professional. It is essential to have a termite inspection before buying any house in Florida. Although a concrete block house may be preferred, it is no guarantee that you won’t get termites.

Ocala Florida weather March 2010

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The winter of 09/10 will be one of the coldest on record here in Ocala. The weather guy on the TV station I watch says it is one of the 5 coldest since they started keeping records in the 1800’s. It seems every day has been 10 to 15 degrees below normal. Winters in Ocala are usually a great time of year with temperatures in the low 70’s. This year the low 60’s were the norm.

March is the beginning of spring here in Ocala, although this year is off to a slow start. Temperatures in March should be in the mid to high 70’s, the grass should green up and the azaleas should start to bloom.

Check out my Ocala Weather page on my web site to see weather information for each month of the year here in Ocala

New web site page about Ocala property taxes

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I’ve added a new page to my web site, Ocala House Hunter.com, to help people understand property taxes here in the Ocala Marion County area.

The first thing to understand is that there are several cities in Marion County. Ocala, Dunnellon, Belleview and several smaller ones. Now here’s the difference from other parts of the country. Many sub divisions are not in any city at all and are just within Marion County. This is important when you are trying to figure out your tax rate.

Another thing to be aware of is that the taxes you see online on an MLS listing are probably not what you’d be paying. This is very deceiving.

For more about Marion County Property Taxes see my new web page.