Allan Kleer

As the current Miami Beach Real Estate market is recovering, I am receiving a lot of inquiries and requests from buyers (both American and international clients) on the possibility of buying a foreclosed or bank owned Miami Beach home. However, there is still a big gap between high-end luxury homes and less desireable waterfront and non-waterfront properties. Most importantly, there is a significant increase in buyers activity on the market due to unfreezing of the credit market for qualified buyers.

To highlight the gap between the turnkey foreclosure waterfront homes and hard-to-sell mid-to-lower range single family homes, I've selected few closed sales bank owned homes in and around Miami Beach. Note that these are not short sales, but only classified as REO sales (Bank owned and approved).

North Bay Road- Bank Approved Sale

Bank Owned, located on prestigious North Bay Road with nearby mansions and waterfront estates. Corner lot surrounded by privacy hedge. Open floor plan, designer stainless steel kitchen, terrazzo, limestone floors, formal dining room, family room, breakfast room, alarm system, sprinkler system.

+ : Great Location
- : Small corner lothouse needed some work due to recent neglect

Sold Price: $520,000 Original
Asking Price : $1,350,000 (2007)

Bedrooms: 4
Bathrooms: 3
House S.F.: 2,474
Land S.F.: 6,978
Sold Date: March 6, 2009
Original Asking vs Sold Price: 39%

Alton Road- Significantly Reduced Turnkey Waterfront Home

A 1930's Mediterranean large home with guest house. Renovation was completed in 2006 with luxury touches throughout The additional amenities of this beautiful estate include: polished marble floors, a custom masonry fireplace, gas appliacnces,movie theater out door fountains with 5 bed and 4 and 1/2 baths.

+ : Complete renovation & charm
- : Located on busy Alton Road & limited appeal

Sold Price: $520,000
Original Asking Price : $2,200,000 (2006)

Bedrooms: 5
Bathrooms: 4
House S.F.: 3,223
Land S.F.: 7,320
Sold Date: April 22, 2009
Original Asking vs Sold Price: 24%

Biscayne Point- Gated Community Land Value Teardown Sale

Bayfront vacant home that was sold "as is" by the lenders, gated community with wide bay views. Minutes from the Ocean, rare Bayfront lot with 75' of waterfrontage.

+ : Waterfront lot with Wide Bay Views, Gated Community in Miami Beach
- : Complete rehab / teardown house

Sold Price: $500,000
Original Asking Price : $1,200,000 (2004)

Bedrooms: 3
Bathrooms: 2
House S.F.: 1,816
Land S.F.: 7,500
Sold Date: March 12, 2009
Original Asking vs Sold Price: 42%

Finally, to illustrate the dramatic difference with turnkey waterfront homes, I'd like to highlight another recent sale on Miami Beach's North Bay Road, where the home was on the market for just TWELVE DAYS:

North Bay Road- Wide Bay Home

This was one of the best waterfront deals on Miami Beach. Wide bay views with 77 FT on the water and a 254 FT deep oversized lot. This home is sparkling clean and livable "as is".

Sold Price: $3,200,000
Asking Price : $3,900,000

Bedrooms: 4
Bathrooms: 5
House S.F.: 4,006
Land S.F.: 19,685
Sold Date: March 11, 2009
Original Asking vs Sold Price: 82%

The buyer activity in Miami Beach Real estate has increased significantly over the past month for "A-grade" real estate properties. The grade "A" properties are defined as:

- Waterfront South Beach condos such as the Murano, Murano Grande, Icon South Beach, Portofino Tower, Continuum South Beach, and other affordable bayfront condos such as The Waverly and The Floridian on West Ave.

- Luxury waterfront single-family homes located on the island communities of Venetian, Palm, Hibiscus, and Sunset Islands.

Whether it's a waterfront home or luxury condo, aside from being an "A" grade property in today's buyers market an additional requirement is that the property be a turnkey, or completely remodeled and updated. In other words, the only additional expense a buyer has to be concerned with is moving in with their furniture and personal belongings

It's been our experience recently that single family homes and condos, when priced RIGHT, are bombarded with buyer interest and generally receive multiple offers. We are witnessing a new surge of buyer interest in these "A" location properties in the South Beach and the greater Miami Beach real estate market. Our real estate websites are also seeing a dramatic increase in traffic, with local cooperating brokers calling with inquiries and sending us multiple sales contracts.

All of these signs are indicators that the bottom is very close to being reached, and sales are beginning to come back, with prices to GRADUALLY follow as the "A" inventory diminishes.

A few examples of "A" real estate properties currently on the market:

Venetian Island - Greatly Reduced Waterfront Home

Romance is felt throughout this Mediterranean waterfront home situated on 10,500 sf of land, spanning 60 feet of wide bay waterfront facing the Miami skyline. This timeless residence with unique architectural features contains over 4,117 sf of living area, with 5 bedrooms, 6 full and 2 half baths.

Current Asking Price: $3,199,000
Original Asking Price : $4,250,000
Bedrooms: 5
Bathrooms: 8
House S.F.: 4,117
Land S.F.: 10,500
Waterfront: 60 ft. with Dock

San Marino Island- Significantly Reduced Turnkey Waterfront Home

A fantastic opportunity to own an oversized waterfront lot. This Mediterranean waterfront estate has 90 feet on the water, located on the Venetian Island causeway between Miami and Miami Beach. Beautifully redone with gourmet kitchen, brazilian cherry hard wood flooring, fireplace, office/library, and award winning landscaping!

Current Asking Price: $2,950,000
Original Asking Price : $4,599,000
Bedrooms: 4
Bathrooms: 5
House S.F.: 3,370
Land S.F.: 15,750
Waterfront: 90 ft. with Dock

Portofino Tower Condo- Spectacular Atlantic Ocean, Fisher Island, and Miami Beach Skyline View

This high floor condominium is a real flow through floorplan with two expansive and very private terraces with the most stunning views of Fisher Island, Downtown Miami, Miami Beach and the Ocean. A Grand Foyer entrance, floor to ceiling windows, a unique floorplan, and the most exquisite upgrades make this condomimium one of a kind.

Current Asking Price: $1,500,000
Original Asking Price : $1,795,000
Bedrooms: 2
Bathrooms: 3
Condo S.F.: 1,960

The state of the Miami Beach Real Estate sales industry is currently in a state of change and consolidation. Having started my career in 1998, I have been very much successful during the "boom" market of 200-2006 and in the current "bust" market. During the "boom" years, everyone and their uncle had a real estate license. Real Estate was "the" topic of discussion- due both to the lucrative commissions and also the cultural and social appeal of shows such as House Hunters, HGTV, etc. Everyone wanted to be part of this Real Estate phenomenon, and this was easily attainable via easy mortagages and equity lines of credit.

The "easy" money in earning a real estate commission from the sale of a property is long gone. Today's market requires Agents and Brokers who have strong organizational skills, attention to detail, intimate knowledge of realistic market values, a close relationships with lenders, patience, and most importantly strong negotiation skills. The task of taking a buyer around and showing him some good "deals" is just the beginning of a successful real estate transaction. In this market, the key is to provide a strong value-added service to the customer (both to buyers and sellers).

My professional strategy for the last few years has been to focus on investing in both the people who comprise my team and in marketing resources for our clients. This involves such mundane but important tasks as maintaining meticulous files and a system for following up with pending offers and contracts, as well as investing in new marketing resources that allow us to promote our clients properties to influential Brokers around the world. My highest priority, however, has been to build and retain a trained, motivated, knowledgeable, and honest team of agents that are committed to the business.

A few of the latest successfully CLOSED sales of Miami Beach single family homes that are worthy of note:

Palm Island Luxury Home

Palm Island Luxury. Granite kitchen counters w/stainless viking equipment. Marble floors and terrace with hard wood in bedrooms. Large master with walk in closets & balcony. Infinity set river rock pool w/paver deck and wet bar. Seperate maid quarters. Full emergency generator and Gated entry to prestigious Palm Island.

Sales Price: $690,000
Previous Asking Price : $1,150,000
Bedrooms: 5
Bathrooms: 4
House S.F.: 2,694
Land S.F.: 6,000

South Beach Home

Rare single family home in South Beach by renowned 1930s architect. $325k+ renovation incl new: tile roof, PGT impact windows, HVAC, elec, plumbing, lighting, heated salt pool, marble paver deck, prof landscape. New in 2008: sleek custom kitchen w/ Sub-Zero/Thermador/Bosch, exotic stone; 3 new marble baths - Hansgrohe/Duravit/Toto fixts, body sprays, wenge vanities. Original wood floors, 11' ceiling in sunny rotunda Living Room w/ honed coral-rock fireplace, Moorish detail arches. Corner lot in Flamingo Park neighborhood of Miami Beach.

Sales Price: $1,139,750
Previous Asking Price : $1,350,000
Bedrooms: 3
Bathrooms: 3
House S.F.: 2,142
Land S.F.: 7,500

Venetian Island Waterfront Home

Prime Venetian Island property, 60 x 175 waterfront lot with 10,500 Sq. Ft. Minutes from South Beach, The Performing Arts center, and Downtown Miami. Panoramic Bay views of Downtown Miami, the cruise ships, and Palm Island. This home offers Miami Beach waterfront living at its finest!

Sales Price: $1,970,000
Previous Asking Price : $3,350,000
Bedrooms: 5
Bathrooms: 5
House S.F.: 3,268
Land S.F.: 10,500
60 ft. of waterfront

1. Mortgage Modification

If you're facing foreclosure and want to "modify" your mortgage to keep your single family home or condo, you must meet the following criteria:

• Have secured your mortgage before Jan. 1, 2009
• Have a primary mortgage of less than $729,500 (1st Lien holder only)
• You must live in the property (primary residence only)
• Must fully document income with tax returns and pay stubs
• Sign a financial hardship statement
• Go for counseling if your total household debt totals more than 55 percent of income.
• 31% debt to income ratio for monthly home payments is the overall goal of this plan
• No loan to value ratios apply (this is especially good for underwater homeowners)
• Only one modification will be allowed per homeowner
• Loan Servicers must take into account the advantages of modifying versus the financial cost of foreclosing on the homeowner
• Borrower receives $1,000/year in principal reduction for on-time payments (five years maximum)

If you meet all the above listed qualifications, your lender will then determine how much to lower your monthly payment so it's about 31% of your gross monthly income. The interest rate could be as low as 2%.

Homeowners will pay no fees for the modification. However, homeowners could face a balloon payment at the end if your lender reduced your monthly principal payment during the modification. So if your lender reduced your total payments $20,000, you could owe that amount when paid off your loan, refinanced or sold your house. The new loan rate can go up after 5 years. It's only low in the beginning to help the homeowner dig themselves out.

This plan will be in effect until the end of 2012 and can only be used once.

2. Refinancing Option

If your current on your mortgage but your bank won't let you refinance because your mortgage is "under water," here's how you qualify for the government refinancing program:

• Your home must be the primary residence
• Your loan must be owned by Fannie Mae or Freddie Mac
• You must have sufficient income to support the new mortgage debt
• You can't take cash out of the new loan to pay other debt

There's another big restriction, however, that will make many South Florida homeowners ineligible for the program: the value of your house can't have fallen much below the amount of the mortgage.

It is my belief that the loan modification portion of this plan will indeed be helpful to those homeowners that are having trouble keeping up with monthly housing expenses. Especially those who are committed to keeping their primary residence for AT LEAST five years. For eligible homeowners, who have have the ability and discipline to stay current with reduced mortgage payments, this plan should provide much needed financial relief.

The demand for foreclosure and Bank controlled condos in Miami Beach have increased significantly over the past few months. I have seen a tremendous increase in the level of interest for this type of properties from many of my new and former clients looking to purchase properties in Miami Beach. The strongest downward price pressure is occurring due to distressed and short sales. However, premium properties such as the high-luxury condos in the South Beach area (Icon, Murano Grande, Murano at Portofino, Continuum, Apogee and Portofino Tower) continue to experience strong demand and prices still command a strong premium in terms of overall 4/Sq.Ft.

Bank-owned properties, also known as REO, or short sale properties usually a lengthy complicated process with no guarantee of success in actually getting free and clear title for the buyer. Working with a real estate professional who knows the parties involved in the transaction (attorneys, banks, other realtors, and misc. creditors) so that the property can be successfully acquired by the interested buyer. Due diligence, follow up with large volumes of paperwork, and often times complex negotiations with lenders is essential for ultimate success.

If you are a potential short seller, this is especially important to keep in mind in choosing a listing agent, as NOW is the time when savvy buyers are purchasing spectacular waterfront condos in the above mentioned buildings (as well as many others).

A quick look at a few more prominent closed sales (& short sales) in some of the premier condo buildings in the South of Fifth Street area of Miami Beach:

Continuum on South Beach- South Tower #2703

Beautiful unit on a high floor. Great condition! Stunning views of the Bay, Government Cut, Ocean and Downtown Miami. Several upgrades throughout, including a modern Master Bathroom.

Original Asking Price: $2,395,000
Sold: $1,375,000 ($778/SF)
Closing Date: 12/08/08
Price Drop (original asking vs. actual sales price): 42%

Continuum II South Beach- North Tower #2301

This massive two bedroom unit is in a corner location, with walls of glass looking out towards the beach, Government Cut and Downtown Miami.

Original Asking Price: $1,850,000
Sold: $1,535,000 ($798/SF)
Closing Date: 02/18/09
Price Drop (original asking vs. actual sales price): 17%

The Portofino Tower - #PH4306

Breathtaking views of the ocean from this 43rd floor Penthouse. South Beach, Biscayne Bay and Downtown Miami views. 2 large terraces.

Original Asking Price: $1,995,000
Sold: $1,600,000 ($678/SF)
Closing Date: 2/18/09
Price Drop (original asking vs. actual sales price): 25%

The Murano Grande - #1606

Stunning 16th floor direct-bay unit at South Beach's Murano Grande. A middle bedroom was removed, making this one of the largest and most-spacious 2 bedroom units in the building.

Original Asking Price: $1,449,000
Sold: $1,320,000 ($652/SF)
Closing Date: 1/28/09
Price Drop (original asking vs. actual sales price): 9%

The Bentley Bay #412

DIRECT BAY VIEWS to Star Island & DOWNTOWN Miami with extra large Balcony.

Original Asking Price: $539,000
Sold: $325,000 ($417/SF)
Closing Date: 1/28/09
Price Drop (original asking vs. actual sales price): 40%

Statistics from: The Southeast Florida Regional (SEFR) MLS