Need Condo Financing In Miami?

Securing financing to purchase a condo in Miami is challenging. We have a myriad of challenges to overcome, including conservative appraisals, financially strapped condo associations, foreclosures, and owners behind on maintenance fees. But all is not lost, you just have to work that much harder to secure a deal that makes sense.

This year, Fannie Mae has already approved twenty-six condo projects in South Florida for financing, which is a dramatic increase over the past two years. There are several new construction buildings in downtown Miami where one may obtain purchase money financing. Yes, larger down payments are required and the banks want to verify your income and assets, but financing is available.

So in which projects are buyers successfully obtaining financing in Miami Dade County? Based on the data provided by the Southeastern Florida Multiple Listing Service, the top five condo projects to receive financing during the past 90 days reflects the following:

1. The Madison, Miami
2. Lago Grande, Hialeah 
3. Winston Towers, Sunny Isles Beach
4. Atlantic at the Point, Aventura
5. Mystic Pointe, Aventura

There has also been deals financed in several buildings which may come as a surprise, including:

1. Akoya, Miami Beach
2. Jade on Brickell, Miami
3. The Waverly, Miami Beach
4. Blue Lagoon, Miami
5. Decoplage, Miami Beach

While obtaining a mortgage may appear to be an impossible task in South Florida condominiums, in the past ninety days there were 932 total closed sales that involved conventional, FHA or VA financing, versus 1,569 transactions that closed as all cash deals.

The data used to generate this chart/data is gathered from the Southeast Florida Multiple Listing Service (“MLS”). The data in the MLS is deemed reliable but not guaranteed. This data is for the most recent 90 days, unless otherwise indicated. The prices are the actual sale prices of all condominiums, villas, townhomes or coops, that closed with some form of financing during the period indicated. This information is not represented nor warranted in any way by Miami Angel Properties, LLC.

Buying Cash vs Financing – The Facts

In today’s market, everyone is looking for the angle to purchase property at the biggest discount. One of the most common expectations is “I am paying cash, so therefore, I should receive the biggest discount and have the most leverage.” Before handing over that big bag of cash, you may want to look for more information.

We have far more active buyers in the Miami market today compared to six months ago. Sometimes the number of agents and their clients chasing the same “sweet” deal is quite overwhelming. Massive bidding, inside deals and multiple offers are now the norm.

Unfortunately, with so many struggling real estate practitioners out there you have to be vary wary of being misled as to the facts.  The scenario is always similar. Listing agent wants to get both sides of the deal and maximize their commission. So instead of encouraging offers and playing by the book, they work to misrepresent the facts and turn you off the deal.

So where is the “sweet” spot? Just how much leverage does one have when paying cash? My analyses of the sales of bank owned properties [REO] for most recent six months of this year revealed the following:

• Condos, Townhomes purchased with Financing – the average discount [Selling Price to Listing Price] has significantly decreased from 95.6% in January to 102% in June 2009. 
• Condos, Townhomes purchased with Cash – the average discount has significantly decreased from 92.8% in January to 99% in June 2009. 
• Single Family Residences purchased with Financing – the average discount has slightly decreased from 97.3% in January to 99.4% in June 2009. 
• Single Family Residences purchased with Cash – the average discount has decreased from 88.6% in January to 93.9% in June 2009. 

The results show that the cash buyer is obtaining bigger discounts in both the purchase of condos, town homes and single family homes. However, the spread between the financed and cash deals may not be as great as what you expect.

These numbers do not take into consideration seller concessions, which is much more common on financed deals than cash purchases. The average seller concession on a financed purchase has been just over $5,000 or 4% of the average purchase price, whereas the average seller concession on a cash purchase has been just over $2,900 or 3% of the average purchase price.

When comparing the total number of purchases with cash to financing, there are clearly more condos and town homes being acquired with cash versus financing. The reverse applies to single family homes. This is not a surprise as it can be challenging to obtain financing to buy that condo in Miami. However, buyers are obtaining financing more often than you may think. During the past six months, there have been 931 closed sales with financing compared to 1,476 cash transactions in the REO condo market.

Clearly, the Miami real estate market has picked up steam this year. Bank owned properties are on the market for less time and demand is pushing up selling prices. If you have not secured that distressed property do not get discouraged. The bank owned property pipeline is about to open up again and there will be more deals out there to consider.

If you would like more information on the Miami REO’s or foreclosure market, properties for sale, or financing, please contact us via email at info@miamiangelproperties.com.

The data used to generate this chart/data is gathered from the Southeastern Florida Multiple Listing Service (“MLS”) and the Miami Dade Clerk of the Courts. The data in the MLS is deemed reliable but not guaranteed. This data is for January through June 2009 for single family homes, unless otherwise indicated as condominiums/townhomes. The prices are the actual sales prices of all single family or condos/townhomes that closed during the month of January through June 2009.

Miami’s Preliminary 2009 Tax Roll

This week the Miami Dade County Property Appraiser published the 2009 Preliminary Tax Roll. So now it’s official, the countywide taxable value of existing properties has declined by 13 percent, to $222.1 billion. With an adjustment of $8.4 billion in new construction value, this represents a net decline of $23.4 billion or 9.5 percent over the the previous year’s taxable value.

For those of us in Miami’s real estate circles, this announcement is very disappointing. Miami’s Property Appraiser, Pedro J. Garcia, was appointed to office just a few months ago. With Garcia’s promises that the “department will take a look at comparable sales, foreclosures and short sales in a community to establish the right value of properties in each market area,” he has fallen way short of this commitment.

Let’s consider the Appraiser’s taxable value percentage changes from 2008 to 2009 - 

• Miami Beach declined 8.2 percent
• The City of Miami declined 6.4 percent
• Miami Shores declined 13.5 percent
• Sunny Isles Beach declined 2.6 percent
• Homestead declined 24.7 percent

When I posted the blog titled Property Tax Front Lines earlier this year, it was this exact outcome that I feared. I don’t suppose our elected officials have attempted to quality a first time home buyer that is interested in purchasing a bank owned property lately. 

Let’s consider the example of the bank owned, single family residence located at 11205 NE 8 Ave in Biscayne Park, with an asking price of $179,500. With a 2008 assessed value of $299,921, annual property taxes in the amount $9,455.97 and monthly tax payments of $788, how are most people supposed to feel comfortable taking on this huge tax liability? There is no clear directive that a foreclosure sale will be considered a market sale, so I assume they just expect us to convince the buyer to take a swing and hope for the best.  

While our elected officials do not want to deal with reality, the rest of us have to swallow the dreaded real estate tax pill to support crony capitalism. Please, make your voices heard!

MAP is now Mobile

Based on worldwide numbers, mobile devices outnumber computers 20 to 1. While not all mobile phones have the ability to access the internet, the turnover of mobile devices is significantly higher than that of computers.

With so many technophiles claiming that mobile applications today are similar to where the internet was at the beginning of the century, we decided to get with the program and launch MAP Mobile.

Here is a list of the features of the MAP Mobile site: 

• The site will determine if you a using a mobile browser and then serve the content based on that browser.
• The site has been tested and functions on most mobile devices, including iPhone, Blackberry, Nokia, Palm, Opera Mini, Windows CE and other generic handsets.
• The main Navbar offers links to our available Properties, Blog, Services and Contact information.
• The footer offers additional links to properties that are Hot Picks, News, Miami Beach Community, plus a description of the Company and Associates.
• The front page offers the most recent posts.

Check it out and let us know what you think?

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