5 Must Do's Before Rushing Into This Insane Housing Market in Destin Florida

Trying to find a house in Northwest Florida right now or anywhere in the Destin area? Absolutely insane right now. So, one thing I want you to do prior to continuing this entire crazy search is, please listen to this video about the five do’s before rushing into this absolutely insane housing market here in Destin, Florida. So, stick around.

So, for those of you that aren't familiar with Destin, where is it? Now, let's smack dab right in the middle of the Emerald Coast. If you look at Pensacola and Panama City here in Northwest Florida, it's pretty much right there in the center. It's where most people come to vacation when they come down here. If they're not going to Panama City beach or they're not going to Pensacola Beach, we come right out here to beautiful Destin. Destin's got a population of 13,702 as per niche.com. And, this area is best known for, well, it's the luckiest fishing village. Strangely enough when it comes to Destin that it was just a fishing village and then tourism just kind of took hold and man, it is what it is today. They're best known for those white sandy, gorgeous beaches. Of course, you've got Crab Island if you've got a boat to go out there. And of course, boating all throughout here, snorkeling, all the water activities that you'd want to do. The food, especially seafood out here is pretty amazing. Of course, the vacation atmosphere and I could go on and on and on. But probably you're watching this video because you've already decided to move here. So Tim, what do we need to do prior to trying to purchase something here in Destin?

Well, number one on our list is, please reach out to a lender, reach out to your bank credit union, get pre-approved. Or, if you're not pre-approved to get a loan, and you have cash on hand, make sure that you have proof. You've got the cash on hand, right? So, we call that a proof of funds letter here in the industry. Basically, the reason we want you to do this is that you know your numbers first. We hate for you to go out and say you're looking for a condo out here in Destin and you're looking at $400,000-$500,000. If you're curious here in 2022, the average sales price of the single family home in Destin is $515,000. Okay? Condos are a little bit lower, but it depends on what you're getting. And of course, you got to consider HOA fees. But in case, we'll just continue our scenario. We say that we find something around five hundred and you've been looking, you get really, really emotionally, like, excited about it. You get out, you see the house, you put in an offer and then you finally apply for the loan and realize you can't afford it. This is emotionally debilitating. It's not just for you guys, it's also for us that represent you. I, as a young inexperienced real estate agent, had gone through this. So please, live vicariously through me and please make sure you know your numbers prior to going out in either investing or looking for your next primary or secondary home or condo. 

Number two is, you're going to want to have funds on hand for cost outside the sales price. So again, we'll take the scenario of $500,000. Are you putting down a down payment? If this is your primary home, is it a conventional home? Are you a veteran and have a VA? Are you using FHA? They require 3.5% down. What do you have enough for your down payment? I can tell you right now that if you're looking for an investment, secondary property that won't be a secondary home, right? That you're going to need 20-25% down for them. So make sure that you have that on hand. If it is your primary home, you could as low as 5%. And of course, if you're a VA, it's as low as zero percent which is pretty awesome for our veterans. Just know that you are going to have to get inspections. If you purchased a home or a vacation property, in another state, I've been licensed to others or in another place of Florida. I can tell you, from experience, that is absolutely different. The inspection costs will depend upon what sort of property that you're looking into. But know that you will spend anywhere from as little as $300 on your inspection, all the way up to almost $1,000 in inspections depending on who you go with. Okay? But the average is going to be somewhere around five to six, seven hundred dollars depending. EMD, earnest money deposit. This is good faith money to say, hey, I'm serious with this contract. At least in our area, Florida, EMD is not due with an offer. It's due on the acceptance of an offer within typically three days. Right now, in 2022, it's typically about 1% of the purchase price that you'll need to have. So, $5,000 in this scenario. Most agents to include my myself, write a contract or rather an offer that is going to take that $5,000 deducted from your closing cost. Okay?

One other thing too that you'll need to be aware of is that our our market is incredibly competitive. Incredibly competitive. And with that being said, there are a lot of times that you'll go into offer on a property of some sort, and there's somebody else or somebody else's, I'm not sure it's a word, that is also offering at the same time. Here, we never know what those other offers are. So, a lot of times it's like, hey, put your best foot forward. What are you willing to offer? So we do, hey, we'll do an escalation clause that says, hey, we'll pay, I don't know, a thousand dollars over any competing offer not to exceed whatever your max is, right? And then, we know it's listing agents that, hey, this isn't necessarily going to appraise that. So, what else are we going to do? How are we going to cover the gap? So, what we do is we have an appraisal gap. Appraisal gap could be, hey, if it appraises for this amount, I'm actually going to pay a little bit more at closing to kind of fill that gap in. Somewhere like a thousand, two thousand, five thousand, whatever that is. So just keep that in the back of your mind as as you are moving forward and getting prepared to be a buyer in this market. Okay, that wasn't enough info. Let's keep going.

Number three, have a firm understanding of the current state of the market. Now we are talking about this now and as recording of this video is in April of 2022. I can almost guarantee that if you're watching it any time after April that things have changed. So I could give you what's going on now, but it could change a couple of months and I'm pretty sure that it is, because it's been moving very fast at what's going on. So big part is, know what the process looks like for your type of property. So, if you're looking for a vacation rental, it's going to be very different than if you're looking for a single family home in the Destin area, right? If you're looking for an investment property, multifamily, commercial, all those things are going to be way, way different depending on what you're looking at. Those markets are pretty similar, but there are some small nuances that you'll need to know moving forward.Who are you competing with? Are you competing with investors or competing with somebody that's got a really big emotional feel to this that is buying it for the primary purposes, okay? Those are some things. If you're an investor, well, most of you, if you're purchasing property, are investing, right? What is the purpose that you're after? Are you after a return on investment or ROI? Is it cash flow that you're worried about? Or is it appreciation? Is there an appreciation goal that you're looking at? Is it a cap rate, capitalization rate that you're after? These are some things that you need to figure out prior to getting your head around what you're going to offer for a specific type of property. So, talk to your real estate professional and make sure that they understand your goals upfront.

Next, how far am I willing to go for the right home? That's right. So, I have a saying that I teach all my agents here on our team, if it's priced right and dressed right, it's going to go very, very quickly. So, if it looks pretty and it's in a competitive price, it's going to go quickly. And, in our market right now, it's going to go for at least list price, if not for ten, twenty, thirty thousand dollars more depending upon its price point. Right? So, you have to kind of wrap your mind around it. If I see something for five hundred thousand, and it's the perfect condo or it's the perfect house. How much more are you willing to go up to in order to procure that? Does it make financial sense? Does it make emotional sense? Is it still going to meet your needs if you go up to them? Being mentally prepared is you're going to have to go in swinging to get some of these things that you probably will have to offer on multiple property. As I just said to a buyer today, resilience is the thing that's winning in this market.

Number four, understanding competition in a seller's market. Yes, we're in a seller's market. It was five years ago. I mean, I'd have tons of condos, at least a handful of single family homes that meet your criteria, we get pick and choose, kind of have some leverage. In a seller's market, we don't have any leverage. Well, a little bit. We don't have a whole lot of leverage until we are under contract. Okay? What are some key things that you need to keep in your mind when going in for these? Well, first and foremost is speed. If you see something come up, don't be afraid to put something in as something as an offer, site unseen, meaning you haven't seen it. Maybe just based on its virtual tour, maybe your agent went through and did a virtual tour with you by Zoom or whatever, face time. Right? If you got Apple. But make sure that you get into that. Okay? If you're a little worried that, hey, I never put eyes on it, I'm not sure if this is going to be the right thing for you. Is it worth it for you to come back maybe seven, ten days after an accepted offer to go walk through it after? And, at least see it during its inspection period so you only have to spend so much on your inspections, but you can still get out and get your earnest money back. Or, is it worth competing with everybody else and having to go ten to fifteen thousand dollars over. Speed, with the correct offer, may actually alleviate you from actually having to compete with other buyers, which would be amazing. Right? So, first and foremost, I say speed. Try to get something in, try to get that emotional pull from the seller, and you may not have to compete at all. Next, know that it is going to be multiple offers. And we don't get to know what any of those offers are, typically. I always ask but they laugh at me. It's kind of a running joke at this point. But when it comes into multiple offers, know that you have to put your best foot forward. Be ready again to come out swinging and if you really want it, you have to be competitive with that. And hopefully, your real estate agent will give you the right knowledge based on the market when you were looking to purchase of what that's going to take. Okay? Again, like I said before, site unseen. You also will have to look at that even if you're going to rent. Most people renting have to find something online and go, yeah, I'll sign a lease right now or something like that. Site unseen could also be, if you're doing a virtual tour. Right? You never got to feel what the property or the condo or anything like that felt like. So, expect that, you might be putting an offer site unseen a lot of people are right now. And, last but not least, know when the seller's market is, buyer you don't have a whole lot of leverage. There's a lack of leverage. But I can tell you that the objective at least for our buyers is to at least get you under contract. If you can get under contract in this market, then once you are, then you as a buyer finally have some leverage against the seller. Okay? And then you can kind of manipulate over time. I hate saying that, but that's the reality of the market as that, hey, we'll go in with this, but just know that we may have to change some things to actually get to closing. Know that we may not win on certain things. You may not get everything that you want to be fixed after your inspection to go, hey, there's fifty things on here. You may only get a handful of those fixed or maybe you get none of them fixed, but at least you'll get the property. And right now, timing in this market, the interest rates are rising. So over time, how long are you going to own this assets of repairs that you would have just went? No, I don't want to deal with that. So, think about that.

Last but not least, number five, talk to real estate professional. Please, that's what we're here for. Right? Please, here are some things that you'll want to know. There's three things that a real estate agent should be doing for you. First, you want to find somebody that knows the market. Okay? Make sure you find somebody that does a good amount of transactions. You can look at different resources online. You can check out Zillow, realtor.com I believe has that or simply just ask them, hey, how many sales did you do in the last year? Right? And that way, that person's going to know the market. If they're brand new, maybe they have a brokerage or a team that they work for, and you can ask them that, hey, who else am I getting with this deal? How much knowledge am I getting? On our team, we've got everybody here to include myself to make sure you guys are taken care of. Know that an agent also knows the process. This is very important. Okay? You want an agent that's going to set realistic expectations for you, just like you watch this video so far, we're getting you realistic expectation about this market here in the Destin area. You also want to know somebody that knows how to negotiate and when to negotiate. Right? Knows to negotiate when they have leverage. Okay? So, if somebody is asking you permission to be realistic with you, this is probably somebody that you can trust. Last but not least, have that agent that knows your goals and listens to you. Find an agent that someone that can listen and has your best interest in mind. There's nothing better than that gut feeling knowing that the person on your other side for this big asset that you're about to purchase, has your best interest in mind. Not somebody that's just trying to get a sale under to get to the next person. You know, that it takes all kinds to run this world. And unfortunately, some of them do exist in our market and as being in different markets in Ohio, New York, hate to say, but it was more prevalent in those areas as well. But you can always find them and do so by interviewing your real estate agent to make sure that that's the person that they want to go with. If they offer a buyer's consultation, buyer's strategy session, whatever they want to call it, that's usually indicative that they know with talking about and that might be the best person for you.

Alright. Well, that's all I have for the five do’s before rushing into this absolutely insane housing market here in Destin, Florida. If you do have any questions about anything we mentioned here, please feel free to call/text us at 850.320.7757 or email us at Admin@WhittemoreGroupRE.com