Yes, there are plenty of great buys if you are in the market for a Miami Beach condo. However there is an issue that most buyers don’t realize exists.
Not all the prices you see advertised are actually achieveable !
What does that mean ? Aren’t the advertised asking prices and usually a starting point for a downward negotiation ?
One traditional sales, the answer is yes, they are. However a little over 20% of all South Beach condos currently on the market are foreclosures or short sales. While that percentage is comparatively low, it drastically increases when you look at the lower end of the market, e.g. out of the currently 67 bank owned south beach condos available, 47 are priced at 200k or less.
Now to get back on track. What does that mean if for me if I’m in the market for a Miami Beach condo ?
The main thing you have to realize that there are a lot of condos that you will find on the internet which either aren’t really for sale or aren’t for sale at the advertised price.
If the market value of a property (based on recent comparable sales) is approximately 250k, it doesn’t matter how many of them are listed at 150k. Unless they are traditional sales, with a drunk seller and an incompetent listing agent, you will not be able to obtain them at the list price and here’s why:
If bank owned condos are listed below market value, they create a bidding frenzy and ultimately sell very close to market value. If short sales are listed below market value, the lender is not very likely to approve the price, since they base their decision on an appraisal of the property, which in return will reflect the market value. Yes, there is a little room for negotiation, but not nearly as much as most people have come to believe.
Now to back up my claims, let me show you some examples of recently sold bank owned Miami Beach condos.
|5 ISLAND AV # 4F||1||1||950||7/12/10||160,000||185,000|
|1500 BAY RD # 244S||1||1||729||7/9/10||143,000||151,800|
|1619 JEFFERSON #26||1||1||462||7/13/10||99,900||108,000|
|1925 WASHINGTON #15||1||1||400||7/2/10||79,900||90,715|
|1441 LINCOLN #310||1||1||370||7/9/10||74,000||80,500|
|818 PENNSYLVANIA #12||1||1||756||7/6/10||65,835||85,000|
As you can see, all of these Miami Beach condos recently sold and they all sold for more than their asking price. They still went for prices that are very competitive and definitely good deals for however got them, however the people that saw the units listed and thought they could buy for 80-90% (or even 100%) of the list price where left empty handed.
Another pitfall for both buyers and their agents is that a lot of listing agents do not update the status on their listings (especially when they are short sales) after submitting offers to the lender. That means that lots of units that actually show up as being available are really pending sale and thus no longer available unless the current contract falls through.
As you can see, while there is a lot of information that you can gather on your own, what you see is not always what you get when it comes to Miami real estate !
The moral of the story: While you can (and should) do your online research on Miami Beach condos currently for sale, it takes a qualified and experienced real estate agent to dig deeper, find out the status of the units you are interested in and guide you towards making an offer that has a chance of not only being accepted, but also beating the competion.