Cynthia Calisch and Preston Larus

So you've gotten a new lead on a listing: Someone who knows someone who knows you, finds you, and wants you to list their home. It's a small one, but it's in a popular neighborhood and a small paycheck is better than no paycheck, right? Then you find out the seller is upside down and does not have the ability to write a check at closing. So now it's a short sale - congratulations!

Whether you're a short sale expert, what just happened is, you took a pay cut. I figure you'll spend 2-3 times as much time selling that property, and sometimes a lot more. And once you've gotten a buyer, submitted all that paperwork, spent all that time getting an answer and negotiating ... the deal doesn't work out and you start over. When you finally put one together that looks like it will stay together, the bank comes back with, "Oh, by the way -- you'll need to cut your commission to 4%."

Hey, a small pay cut is better than having no job, which is the boat a lot of people are in, so don't complain, right? Except this is not a small pay cut. If you double the time required to perform the job, and cut the compensation by 33%, that means that by the hour, you're making 1/3 of your former rate!

Ouch! So Cynthia and I were lucky enough to be in the right place at the right time and met an investor who buys short sales exclusively. He has a professional negotiator and a dedicated BPO person, and they negotiate a below-wholesale price from the bank, then resell the property at wholesale and pocket the spread. The negotiator does her best to get the bank to forego deficiency judgements and promissory notes against the seller, and is willing to use a portion of the spread to buy those concessions (win-win).

The best parts of this are, the process is much faster, the success rate is much higher (which means fewer sellers going into foreclosure), and the investor's staff handles all that time-consuming negotiation with the bank(s), and does a better job than I could. That frees me up to stick to what I know, which is real estate! The commission paid is almost always much better, too.

Wrangling with banks was not what we got into real estate for. It's nice to feel like we're in the RE business again -- and short sales are no longer a headache. People need help, and we can give it to them again -- finally!

By the way: If you're an out-of-town realtor with contacts in our area who need to short sale -- send them to us and we'll give them their best shot at staying out of foreclosure AND pay you a refrral fee. Ditto if you're a local realtor and you have a short-sale candidate you don't want to handle for whatever reason.

Time was, not so long ago, that you couldn't get a house in Sarasota for under $100,000 -- or anywhere near that. At least, not a house in any kind of decent condition.

That has all changed, now that prices have tumbled to pre-2004 levels in many areas. Not just in Sarasota, either, according to this story released today by the Florida Association of Realtors.

We have seen a spate of new buyers in this price range, and there is certainly a lot available. Interestingly enough, the really desirable properties -- in reasonable condition AND priced realistically -- are not around very long! Many buyers have been surprised to find that the home they were "thinking about" was already off the market when they got around to making an offer.

Interesting times!

Preston here. I have launched myself upon marketing my talents as a waterfront property specialist here in Manatee and Sarasota counties. As a sailor and water-lover for all of my life, it makes sense that I focus more time on the kinds of properties that I have a real affinity for, and that means properties where you can tie up BOATS.

(this picture is of Hornblower, the Baba 40 I sailed on to Tahiti, in about 1987)

I grew up in Gloucester county Virginia on the 5 rivers of the Mobjack Bay, just across the York River from Williamsburg and Yorktown. When I was a kid there, individuals could still make a good living for their families operating a single boat, usually fishing crabpots in the summer and tonging oysters in the winter. Crabs were so plentiful that walking down the shore, you'd see one in the shallows every few feet, and if you went wading, like as not you'd get bitten!

Later I sailed as far as Tahiti and Bora Bora via the Panama Canal. The time I've spent working on boats both as an amateur and as a professional have been some of the best times of my life.

I have been thrilled to work with buyers on waterfront property. Their passion for their new waterfront homes, and the life it calls forth for them and their children, has been a delight to share. Believe me, when you understand how much that dream means to them, there is little you wouldn't do to safeguard them in the transaction of their lives!

I have dreamt up a website that combines resources for the buyer and for the boat nut at www.BoatsAndWaterfront.com. Please visit and leave me your feedback -- I'd like it to be interesting and useful, and your help is appreciated (as are your referrals).

I have a waterfront listing in downtown Sarasota that was owned by the same family continuously from about 1946 until recently. I attended the estate sale held there today, and an old scrapbook of the owner’s was for sale. A couple of pictures caught my eye, and I asked to have them. The Ruth Luise, named after the matriarch of the clan, is shown here, and I believe the body of water is Whittaker Bayou, just down the way from the house. In other photos, she was shown with the Clewiston locks in the background - these are in central Florida, separating Lake Okeechobee from the waters leading to the Gulf of Mexico. Apparently the owners got around a bit in her. When I was a boy, boats like this were common. Now that they are scarce, I can’t help but feel that something precious has been lost.

Just before the holidays, I attended a seminar given by David Levin, prominent local attorney specializing in waterfront property transactions. Entitled “Red Flags on the Waterfront,” it outlined some of the things Realtors should watch out for as they assist their clients in buying and selling.

Many possible pitfalls await the unwary buyer.

Now, regarding making changes to a property after you’ve bought it, you would certainly expect to have to comply with all regulations and get permits and such, and you would look into all that prior to buying, if it was critical to your plans. You might also assume that if you intended to use the property as-is, in the same way that the previous owners did, that you would have no problem doing so. But that would be a dangerous assumption.

David related a story of a man who bought a property with a dock, specifically because it would accomodate his boat. The buyer asked for, and the seller furnished, a copy of the County permit for the dock. But the buyer did not investigate whether the dock was built according to the county-approved building plans. In fact, it was built 10 feet longer, but no one noticed at the time of constrcution, and it subsequently had been used without incident by the previous owner.

The problem arose when the County became aware of the violation, which could been prompted by any number of happenstance events. But in this case the new owner contracted to have a boat lift installed. The contractor routinely applied for a permit, and that’s when it got ugly.

The County refused to grant the permit and refused to retroactively permit the dock. Instead, the owner was required to remove the extra ten feet, which rendered it unusable for his boat! And that dock was one of the prime reasons he selected this property to buy over all the others on the market.

The moral of the story is to do a thorough due diligence by involving a real estate attorney experienced in waterfront issues. Doing so is not costly at all; in fact, if the transaction closes at Mr. Levin’s office, routine due diligence is included in the usual closing costs. It is vital that the buyer’s Realtor build in to the sales contract an adequate amount of time for due diligence. This is easily done at the outset, but if overlooked, can be difficult to remedy afterwards.

The goal is to uncover potential issues BEFORE the closing so they can be dealt with appropriately. Due diligence good; surprises bad!