Tuesday, March 4, 2008

Buying & Selling Real Estate in Carova Beach.

I have harped on this to many of you individually, but there is no ammunition like education when it comes to buying or selling property in Carova Beach. There are properties out there that either the Seller does not know what they are sitting on, or Buyers that don't realize what they just bought, worse the real estate agent thinks they know the difference...and don't. Let me explain via 2 examples:

Case 1: A couple buys two lots side-by-side years ago and never had any site evaluation done on the properties and have no idea of the elevation of the lots. They place them on the market with an agent who does NOT work in the 4WD and has no idea where the lots are even located. An offer comes in for both lots at $115K and $105K contigent on a site evaluation and elevation survey. These lots are located in a flood zone that would require flood insurance but the survey reveals that there is enough elevation to be removed from the flood zone and thus no flood insurance requirement if a house is built on either lot. (Note: application for removal of flood zone with FEMA in this case is free) Who paid for the Survey? The Buyer. The Buyer's agent already knows these properties are more valuable if removed from the flood zone and the Buyer is the only one with the survey information. Seller mistake #1. Then the site evaluations come back and one of the two lots will not support a conventional septic system. Buyer and agent know this a $2-3K problem. Seller and Seller's agent assume property is unbuildable. Mistake #2. At this point the Buyer is not obligated to purchase either lot but decides to renegotiate. One lot is fine and he will pay the $115K contract price but will only offer $50K on the other unsuitable lot. Seller agrees for fear of losing the deal. Buyer pays $165K for two side-by-side lots totaling 1.2 acres close to the beach. Both are now buildable and in an X flood zone.

Case 2: Buyer decides to buy a risky lot with little dune in front of it for protection. Buyer's agent, who actually sells her fair share in the 4WD, advised against buying the lot. Buyer's transient ego compels him to ignore his agent's warning, because he "works for the government and knows the risks involved." He buys lot for $375K three years ago. He never looked at the CAMA small structure setback line which because of the virtually non existant dune in front of him, rendered his lot unbuildable. He is listed under $99K and is finally under contract. Sadly, he bought more than just one of these lots, some for more than $375K.

Folks, in this market right now, there are lots listed for $400K+ that are unbuildable and worth about $5K. There are also lots that are listed for about 50-75% of what they are worth. With all the potential changes coming down the line in the years to come, knowing the ins and outs will make a huge difference.

Get Smart or Find Smart.