I looked up 6 properties in Miami Beach that sold for over the property appraiser's market value (some by as much as $100,000 over) and they all had two things in common. 1) The people buying had no other public record in Miami Dade County and 2) All had no record of a mortgage on the property bought, which means they were bought for cash.
From this I can deduce that the people paying OVER market value are first time buyers, probably new to Miami. They have a lot of cash and maybe they are not getting very good deals, since the vast majority of the people buying are paying under market value -- some by almost half. I looked at 51 properties total in Miami Beach for this report.
You realtors out there, what is going on? Where are people getting all this cash, I am talking about properties that sold for $743,000, $690,000, $600,000, $570,000, $460,000 and $425,000. That is a lot of money to have on hand. Where are you realtors digging these people up? There were a few foreign sounding names, perhaps they are here from abroad to take advantage of our falling market but, in reality, they might not be getting the 'deals' they were seeking.
Also see: The need for financial reform, a case study in Miami: Lennar and LNR
13 comments:
A Frenchman bought in our condo development in 2008 for $710,000 cash. All the neighbors were in shock. In 2006 a unit much bigger sold for $470,000. The Frenchman never got an appraisal.
His assessed value was $263,000 in 2009 and was $305,000 in 2008. He was ripped off. I don't think he got a comp - probably doesn't even know what that is. I think the realtors are taking advantage of foreign buyers.
here's another trivial fact: I bought on Miami Beach in Jan of 09 and fell into the gap of time between the first 'first time homebuyer' rebate and the second 'first time homebuyer' rebate. what did I get? nada.
isn't it impossible for a property to sell for more than its market value? what it sells for is by definition its market value. the market may be subject to informational asymmetries, but few markets aren't.
A fool and his money are soon to be parted. But it makes me wonder how a fool and his money ever met up in the first place.
If a property sells for more than it's market value, you can't get a mortgage easily and your downpayment has to be higher.
When a realtor gets a buyer from out of town with a lot of cash, maybe they don't get them the best deal possible. It seems obvious.
I was a Realtor and I quit, and terminated my license 2006. They lie, cheat, and "F you over" every time they can! They lie more than a Chinese Political Officer!
I'm pretty sure most were foreign. I'm also foreign and tried bidding on some properties I'd seen for cash offering 10%-15% of the asking price. However, the realtor told me that buyers don't like cash deals and prefer to sell to those with a mortgage and so i'd have to pay over the asking price. I told the realtor I was not going to fall for that garbage and walked away from the offer. She tried chasing after me later but I told her that I thought she was a sleazebag. Realtors do think they can dupe the ignorant!
I gave up my license too. It is shameful how many real estate agents are unqualified.
Where are these condos, and in which buildings? Some locations on Miami Beach, such as "South of Fifth," are still quite in demand. If a condo has a great view, it will often command a higher premium than the "comps" should suggest. Also, if the unit is upgraded, that might be very appealing to someone who has been through a renovation once or twice and just cannot stomach the experience again. My point is there are people out there who want what they want, period, and will pay for it. There are also people who will not sell until they get the price what they want and can afford to wait it out. Not everyone is broke. Not everyone is looking for a "steal." It's so easy to find all the "comps" you need these days, anyway - on Zillow.com, for example. Maybe they are overpaying, who knows? I am just suggesting there may be other reasons that these condos are being sold. There are 6.8 billion people in the world. Miami is a tropical city within the borders of the United States - there are worse places in the world to suffer through a few months in the winter. I personally can't wait to get out, but that first trip over the causeway is still pretty dazzling to most people and it takes a long time for that feeling to wear off.
I am not an investigative newspaper reporter. If I see something odd going on, I report it to all of you for consideration. My post asked questions about what I found. I am glad you looked at the other side, last commenter. However, your reasoning didn't convince me on all the properties I found because the gap was too large. Someone would need to call all the buyers OVER market value to see what is up.
You are working on a false premise...
1) The people buying had no other public record in Miami Dade County and 2) All had no record of a mortgage on the property bought, which means they were bought for cash.
From this I can deduce that the people paying OVER market value are first time buyers, probably new to Miami.
That is not necessarily so, and if you could supply the property address, I could be more specific as to some reasons why this may be the case.
Just because someone has no other public record, doesn't mean much.
And if they don't have a recored mortgage, that means that they don't have a recorded mortgage, not that they have made a cash purchase necessarily.
One reason you may see a recorded purchase for more than market value:
A buyer may purchase an apartment furnished, with a seller concession, with an extra parking space, boat slip, seller financing, etc.
Another reason may be that the Tax Appraiser's last evaluation came prior to a major rennovation and the market price is now correct.
Another reason may be mortgage fraud.
There are too many variables and reasons why you might see this. Throw out the addresses and we can try to make some sense of it.
No Garages, boat docks, etc. and you can redecorate/renovate till the end of time, no one is going to pay $100,000 over market value when there are bargains galore...unless there is something wrong with the deal.
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