Florida Mortgage Advice: How to Successfully Navigate a Buyer’s Market

By now, you must have read numerous reports stating how poor of a Florida housing market we’re living in.

But that only applies to sellers. Buyers, conversely, possess a unique bargaining position. How can you best take advantage of it? Consider a few suggestions …

Free yourself to act fast: Buying may be easy, but selling isn’t, so you have to guard against getting stuck with two Florida mortgages. The best way to avoid that trap is simply to sell first.

That’s what Veronica and Maxwell Green, both 28, did last year after the birth of their baby. Realizing they were outgrowing their two-bedroom Tampa condo, they were desperate to find a bigger place. But they held off on house hunting until they had a sales contract on their condo.

“We didn’t look. We didn’t research. We didn’t do anything,” says Veronica. “We didn’t want to find something we loved and not be able to sell our house.”

Freed of their condo, they bid $275,000 for a four-bedroom home listed for $289,900. Two weeks later the seller took the offer.

Another option is to include a contingency clause in your purchase contract, which lets you exit the deal on your new home if you can’t sell your old one. Shortly after the Sullivans put their home up for sale, they signed a contract to buy a newly built one but added a clause that they could bail on the deal if their home didn’t sell by the time the new house was finished.

It didn’t, but their only loss was $800 they paid for upgrades to the new house, which the developer subsequently sold. “Lesson learned,” says Vinse. “I’m not losing sleep over it.”

Know how strong you are: The longer a house has been for sale, the more powerful your position as a bidder/Florida mortgage loan applicant. “Time on market is a good indication that someone is likely to be really hungry,” says Gary Eldred, author of “The 106 Common Mistakes Homebuyers Make (and How to Avoid Them).”

If you’re browsing a public multiple listing service, don’t trust the date of that listing; sellers can game the system by briefly taking a home off the market, then re-listing it.

Ask your broker to look at the privileged MLS data, which details a home’s full listing history, complete with time on market and any asking-price changes.

Pick allies carefully: You can often hire an agent who works exclusively on your behalf. Typically, these buyer’s Florida mortgage brokers earn a 3% commission, usually paid by the seller (though if you buy from a seller using a discount broker, you may have to make up the difference).

Keep in mind that buyer’s brokers, who theoretically work just for you, may have a financial incentive to push certain homes. In some markets builders and even individual sellers are offering higher-than-usual commissions to buyer’s brokers, which can tempt your pro to skimp on negotiations or steer you to more costly houses.

Hire a broker who will work for a set fee or will sign a contract stipulating that his or her cut will be the same for any home you buy.

Wield your power: If you see a house you like, chances are you can find another one that is similar. Exploit that advantage. Make demands you never would have dared ask for in crazier times, such as requiring the seller to make repairs or the builder to throw in free upgrades.

Don’t be afraid to start with an offer that’s 15 percent below asking price.

In February, Joyce and Louis Bertulfo passed on a house over a $5,000 difference between their offer and the seller’s. Where is it now? Still on the market, with the advertised asking price cut from $475,000 to $440,000, just $5,000 above their best offer.

Some expert advice to sellers: Buyers are scarce these days, so when you find some, don’t let them go - especially over $5,000.

SOURCE: Money Magazine