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Miami Beach condos – a buyers market or is it ?

I’m sure that you would agree with the general consensus that the real estate market for Miami Beach condos is currently (and has been for a while) a buyer’s market, right ?

Well, you might want to re-think this notion. While the general parameters defining a buyer’s market (supply > demand) are definitely there, most of the Miami Beach condos that are actually selling these days are distressed properties like short sales and foreclosures (bank owned properties). As you can see from the research we did a few months ago, most of the condos selling in Miami Beach these days are in the below $150k price range, which means that most of these miami beach condos were distressed sales.

When it comes to getting a great deal on a distressed Miami Beach condo, keep in mind that the rules of the game change drastically.

a) you are not dealing with a “live person” as a seller, but more likely with an employee at a bank of loan servicing company, who neither knows the property, nor cares about anybody’s intentions, motivation, etc, but
rather just looks at hard, cold numbers to determine the price they will accept.

b) sometimes the prices that a lender will accept are based on appraisals or opinions of value that might be off. This can work in your favor or against you.

c) You want a deal, don’t you ? Of course you do. Unfortunately it’s not only you, but you and everybody else.
That actually means that when it comes to the best deals out there, it is a seller’s market.
Well priced bank owned South Beach condos more often than not will receive multiple offers within a matter of days and end up selling above list price. Short sales on the other hand, will generally sell somewhere close to market value, with the list price having no bearing whatsoever on the price the lender will accept for the unit.

What does that mean for me as a buyer ?

Since most bank owned South Beach condos sell for close to list price or even above list price and receive multiple offers it is important to put your best offer in immediately. If seen it happen countless times that somebody lost a good deal, because the got too greedy and demanded an unrealistic price. Now I know that seeing is believing, so here’s chart showing some South Beach condos that sold last month with the list price, selling price and closing date. These Miami Beach condos were all bank owned.

South Beach bank owned condos sold Dec 2010

Bank owned condos sold 12/2010

If the list price is not a good indication of the sales price, how do I know how much to offer ?

This is where your real estate agent comes into play. He or she should be able to conduct a comparable market analysis showing the recent comparable sales and giving you a recommendation on the offer price that offers the best balance between having the best shot at obtaining the South Beach condo you like and not overpaying for it.

I don’t trust my agent’s opinion…

Well, in that case there’s only one solution. Find an agent that you do trust or start making offers on your own. I honestly don’t see why anybody would want to work with a real estate agent if they do not trust their judgement and the information they can obtain for them. After all, that’s the reason you decided to hire a professional realtor to begin with, isn’t it ?