I normally do not watch a lot of television, but when I got home last night my wife had the TV on and I started watching the commercials.  It was amazing to me that every single commercial was about saving money – Walmart says if you buy certain meals you can save $400/month and the car dealers say if you buy a particular car you can save money because it gets better gas mileage. 

These major corporations have done their homework and they feel that in a tight recession people are very sensitive to saving money.

The question is, how does that apply to the buying and selling of Hilton Head Island Real Estate.  If someone is selling real estate, they have to make the purchaser think they are saving money and that they are getting a good buy or an excellent value.  This is the way purchasers are currently thinking.

The purchaser is only interested if he feels he can “save money” on the real estate property he is buying. 

This will obviously change the way real estate is bought and sold in our country.  I do not know how long I will have to keep selling real estate this way, but if we want to succeed, we have to follow the lead of the national marketers and understand the needs of the buyers.

I have been getting more hits on my website under the “foreclosure” tab than I have any other place on the web.  I think this shows that buyers are looking for value and there is no difference where you are buying at Walmart, a car, or a house – everyone is looking for value in today’s market.

One of the agents in my real estate office just sold a house yesterday for $345,000.  I had taken the bank an offer on the same house six months ago for $565,000 which they turned down because the bank was owed $620,000.  I tried to convince the bank that $565,000 was a good offer.

So many times when a house is foreclosed on, the person losing their property takes everything in the house out.  In this particular case, the seller took all the appliances, granite counter tops, ceiling fans, and all the fixtures – even the knobs off the cabinets. 

Obviously this particular house did not show well because who is going to buy a house that has been torn apart.  So the bank lost a lot of money because the house was in such poor shape. 

They also lost a lot of money by not taking the $565,000 offer that I had six months ago.  Believe me, the real estate market has not dropped that much in six months, its just that they did not take the offer when they should have because they did not own the house yet – it is a short sale situation and they were probably thinking they could get more. 

One of the main questions people ask me about real estate foreclosures is what the bank thinking of?  Many people ask me if they paid the bank’s loan off if they would give me the house.  Of course they would always do that because in 99% of the cases the house is not worth the amount of money owed on the loan.  If it was worth more, the previous owner would have sold it and stuck the money in his pocket.

It is hard to predict exactly what banks will do; some banks are good at getting back to us and negotiating with us, others are trying to hold out for everything they can.  In essence, banks are no different than regular sellers.  Some are more motivated than others.

If you have any questions concerning the best buys on foreclosures, please visit my website and click on my Hilton Head Island Foreclosure Listings.

In the next week we will also be releasing our own website; HiltonHeadForeclosures.com.  I will keep you posted on that.

Now is a great time and there are some great foreclosures out there.

There are many factors that go into real estate cost of ownership. 

Most people normally think of the costs being the price and therefore the monthly payments.  When interest rates are down, it allows people to buy a much larger place for the same monthly payment or pay less for the same property.  With the current interest rates, it makes it much easier to own property in our corner of paradise – Hilton Head Island.

The other costs are usually associated with insurance, taxes, homeowners association fees, utilities, yard maintenance, pool maintenance, cable TV, water/sewer, and telephone service.

Most of these costs normally do not increase.  The only ones that do have a tendency to increase are taxes and insurance.

Look at it this way, if a guy in Cincinnati is looking at buying a $500,000 condo at the beach for his family to enjoy.  He is trying to figure out what it is going to cost him after he rents it out.  Let’s say hypothetically that cost him $20,000/year.  He thinks that he can probably handle that plus they can benefit by using it four or five times a year, it adds some tax benefits and my friends can use the condo.  This is how he figures his cost of ownership. 

Now let’s say his insurance and taxes increase.  Instead of costing him $20,000/year it is costing him $30,000/year.  That is a little harder for him to stomach for a vacation getaway and he might decide to sell.

When Hilton Head Island taxes and insurance increase, you have less people buying and more people selling.  You have an imbalance in the Real Estate market causing prices to drop further.

Most politicians do not understand the effect that taxes and other costs have on the economy.  I am pleased that South Carolina has recently reduced tax for single family homes, but they should do the same for 2nd homes on Hilton Head Island as well.

I think this example proves to us that the cost of ownership is more than just the cost of the property and that is what property buyers and sellers are looking at.