Why are there such large price differences between similar apartments in South Beach?

Asked by Brian Rogers, 33139 Sat Jul 17, 2010

I am looking to buy a studio or 1/1 unit, with a bay view, in the Mirador on West Avenue in South Beach. There seems to be a huge price difference between similar units shown on Trulia, sometimes up to 100%. What could possibly justify such a price difference? Are the listing prices usually negotiable? Thanks, Brian

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Nicole Grosm…, Agent, Miami Beach, FL
Wed Sep 1, 2010
It depends on the type of listing. There are some "distressed" properties in that building. Also, take a look at an overhead key plan. In Mirador North some of the units face NORTH with an east west view off of the balcony. Some face East , but on a low floor they do not have a view.
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Wenceslao Fe…, , 33130
Mon Aug 2, 2010
Hey, Brian. This is a very interesting question. Specially when you go to a condo building where typically, you find identical units below and above the one, with great price differences between them.

Sometimes, you can justify a higher price because the view in a much higher floor is usually that much more spectacular. Other times, the owners of the one unit in a lower floor may have done so much more to the unit, while the one in a higher floor may need so much work.

In this market however, I also find that many of the criteria once used to determine price between units (even in the same line of the same building), have literally been, blown out the window.

With so much inventory, buyers and sellers are finding different points of agreement. Some of the circumstances have to do with repossessed property sellers (usually lenders selling their REO or Real Estate Owned), motivated, pre-foreclosure sellers (typically owing more than the property is worth and selling in a Short Sale), and regular sellers looking to move for other reasons - all require different approaches.

By the same token, buyers come to play with many different levels of sophistication, reasons for buying and abilities (to buy cash in particular).

In addition, one similar building may be in financial chaos whereas the one next door is doing quite well. Typically, the one if financial chaos can only offer buyers the opportunity to pay cash for the units in that building since most lenders will not risk making a loan in a building in distress. In addition, there may be too many renters and/or too many owners behind in their maintenance fee payments and/or the payment of assessments for common area repairs, for instance.

Then of course, you may have other building and unit features that affect price such as upgrades, parking, balcony as well as facilities and amenities.

Finally, there is always that interaction between what the seller wants, needs or thinks he/she can get for the unit and what the agent is able to convey and educate that seller the unit can sell for. Unfortunately, many agents find themselves unable to help the seller understand today's market forces and how to properly price a unit for sale.

In the end, it is "the market" (like it is in the stock market), that determines what the property will sell for. The right formula is - what a ready, willing and able buyer is willing to pay for a unit, when matched to what a seller is willing to receive. With good statistics and factual data, a strong, professional agent like myself is able to let the seller discover by him/herself when a deal is on the table that they should say 'yes' to.

If the seller is on the market to sell (as opposed to simply having the property 'for sale'), and is open to listening to their professional real estate representative (as they would a competent doctor for what ails them or attorney for that legal headache's solution), there is no reason why a qualified buyer could not have the deal they want in today's market and for the seller to move on, head up high, and also get what they want considering today's market.

Seller's of a particular stock who must sell on a particular time/day can't get more for that stock than 'the market' (buyers), are willing to pay based on the news and circumstances of that day. Given time and other variables, that transaction may take place at a different price. If it must happen at that moment, the transaction can only happen based on what's circumstances dictate then.

Therefore, sellers must remain honest with themselves and carefully evaluate their motivations for selling with their agent and be clear as to what market forces are affecting sales. Buyers must listen to their agent and work with one that can hep them capitalize from today's opportunities.

Remember: Luck, Is When Preparation Meets Opportunity

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Josette Wys+…, , 33139
Tue Jul 20, 2010
Hi Brian. I am a Realtor in South Beach; and the Mirador is in my backyard. I deal day in and day out with all the condos in South Beach

The Mirador has had a lot of turnover during the past 12 months. The major variance is pricing is all based upon what the Seller currently owes (for the short sale) and what the bank is wiling to take (on the REO's). The other reasons for the variance is view, exposure, balcony or no balcony, etc.

If you review the floorplan for Mirador 1000 and Mirador 1200 you will notice they all have different views. When we speak, I'll also be able to share info regarding the financial stability of one building over the other. Call me today at 305-523-9323.

Long story short, Mirador 1000 and 1200 continue to be strong buys. The days are gone for the $108k unit at Mirador as we now see them averaging around $128k. Yes, you can find them but they are small studios with no view (and no balcony) on low floors. all the good ones have been gobbled up. The units that were the least attractive were sold in auction and next month we are expecting some of the shadow inventory for Mirador 1200 to be released.

If you have an interest in purchasing in these buildings or any of the fine bldgs earmarked for short term rental / investment properties in South Beach, Miami Beach or Brickell please call me direct at 305-523-9323

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Randell Simp…, Agent, Miami, FL
Sun Jul 18, 2010
In highly speculative buildings where most of the units are investor owned, the price swings will be greatest. The Mirador was one of the last large conversions on the Beach before the market turned and is thus fillied with investors. Lower priced units generally require a cash buyer; either they must be sold quickly, ie: a short sale, or they are bank owned ie: an REO. Unit owners not quite ready to take a financial hit will generally have their units priced too high. More than likely you will need to make offers on more than one unit before you will be able to feel as though you got a proper deal.
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Alma Kee, Agent, Tampa, FL
Sun Jul 18, 2010
Hi Brian,

The "price" on a pre-foreclosure short sale is "ficticious", unless it has been previously approved at the list price. Some agents recommend a very low price so an offer can be submitted to find out the "real" required price.

As far as being negotiable on the price, if the short sale is "approved" at the asking, the seller may not want to waste time with a lower price--unless no one wants it at the asking price after a few weeks.

Good luck!
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Dan Chase, Home Buyer, Texas City, TX
Sun Jul 18, 2010
A house is a lot like a car. You have the asking price, and you have the sales price. If you are willing to haggle you can almost always get a better price than is being asked.

Yes, all real estate prices are negotiable. Anyone who says otherwise will need to explain how they would not drop the price by $5 to make a sale happen.
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Dan Chase, Home Buyer, Texas City, TX
Sat Jul 17, 2010
Take a closer look. Are the real low priced ones foreclosures?

If they are you need to understand that all of trulia's foreclosure listings are made by realtytrack.

realtytrack has a real bad habit of saying for sale when in fact the place is not even foreclosed on yet. Not only is it not for sale it is not even foreclosed yet.

It really is a bait and switch tactic. Ignore all realtytrack foreclosures here on trulia. That means leave out ALL foreclosures during your search.

You may get better more honest results if you search at http://www.realtor.com It is the site that is the best a buyer can get without using a professional agent.

If after leaving out these fraudulent foreclosures you find the prices are fairly close you found out the reason why. If not perhaps some condo complexes are more desirable, or some sellers are not understanding what the sales price really is now and they are asking way to much for their condo. If that is it the appraisal will NOT justify that high price.
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Kevin O'Rour…, Agent, Miami Beach, FL
Sat Jul 17, 2010
Hi Brian,
Generally speaking the major factors that help determine the list price of units in the same building include,
square footage, floor level and views. Other reasons include the condition of a particular unit, upgrades, length of time on market, motivation of owner to sell and price the property accordingly and whether or not the property is a foreclosure or short sale. I am looking at current listings in the Mirador and see that the prices do vary quite a bit as you mention. The square footage of the 1/1 units listed varies from 543-969 sq.ft so this is probably a major factor here.
Yes, you are always free to submit an offer below the asking price and the seller may negotiate. A lot depends on the motivation of the seller and how you can justify your offer. Checking recent sales in the building and similar nearby buildings will help you to determine fair market value. If you are not already working with an agent, I would be happy to help you.
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