In Marion County, Sellers & Builders Sweetening Deals to Move Houses
The once-frenzied housing market in Marion County has cooled substantially, and sellers are getting creative in order to strike a deal, the Ocala Star-Banner reports.
From paying closing costs or even several months of the buyer’s Florida home loan payments to offering vacation packages or new home appliances, sellers are going out of their way to sweeten their sales pitches to area home buyers.
“There are quite a few incentives being offered today, now that we have more inventory here. Negotiability is back,” Wilbur Van Wyck, President of the Ocala-Marion County Association of Realtors, said.
While it’s a method real estate agencies have encouraged agents to use in previous years when the market favored the seller, it’s certainly more of an enticer now that home sales continue to wane. It’s definitely a buyer’s market out there in Central Florida today.
Paying off a buyer’s closing costs — which can typically range from 4-6 percent of the home’s purchase — has become a common practice in this new era of seller incentives.
Heath Fleming, owner of Fleming Mortgage Services, agreed that the buyer now holds all the cards.
“A year ago, a seller could name his price and say ‘That’s it. I’m not going to go one dollar less.’ That’s not the case now: You see signs all over saying reduced, reduced, reduced,” he said.
Edie Ousley of the Florida Home Builders Association in Tallahassee said builders are looking to unload properties in a flooded market and as a result, they are offering a smorgasbord of incentives.
“They include complete appliances, trips being offered. We’ve even seen some builders offer to put new cars in the garages,” Ousley said.
The sagging sales in Ocala for existing single-family homes are evidenced in recent numbers reported by the Florida Association of Realtors, which shows that existing-home sales in the Ocala metropolitan area, a big part of the Central Florida housing market, have fallen 32 percent in August from the same point last year.
Statewide, the housing market outlook also continues to look dour, even as Florida home mortgage loan costs remain at relatively low levels (though they have risen since a year ago). Prices have simply gone up past what most families are willing to, or are able to, pay.
That’s why when they are willing to buy, many people in Florida and other areas of the country are demanding that cash be given back to them as part of the closing terms. By enticing buyers through the payment of closing costs or other means, the seller gets to move their house at above market value while the buyer gets extra cash kicked back to them, money that can be used in any number of ways.
In many of those cases, the cash is kicked back to the buyer without the Florida mortgage lender being told. Van Wyck said that he hasn’t seen straight cash-back proposals being encouraged by lenders in the Marion County market.
“I would think banks would have a big problem with that,” Van Wyck said.
Fleming said he encourages buyers to accept offers from sellers who are willing to pay closing costs.
“I always tell my buyers keep money aside for a rainy day; you don’t want to be real estate rich and cash poor. To get the seller to pay closing costs is definitely an advantage,” he said.
But Fleming said if a builder or broker ever offered straight cash as part of the closing terms he would advise his client against taking the deal, especially if it meant an inflated value for the home.
“I would never advise anyone to buy a house above the appraiser’s value,” he said.
As for the downturn in the county’s housing market, Fleming said he expects lagging sales to continue for at least for another year, but not to bottom out, due to the continued arrival of baby boomers.
Some areas of the U.S. where the market has substantially slowed are expecting quicker turnarounds, but Fleming said Central Florida is a different animal.
“We have a tremendous growing baby boomer population, so the market is going to adjust itself differently,” Fleming said.
