Inventory Rising, but We're Keeping the Candle Burning

After stating the following past 6-month figures for our resort community area here is Georgia, you may wonder how the news is not "All Bad".

Single family lakefront homes: Active listings...244 Sold past 6 months...23 A 5 year-inventory

Lakefront lots: Active listings...167 Sold past 6 months... 7 An 11-year inventory

Golf on-course / interior lots Active listings...365 Sold past 6 months...10 An 18-year supply

So..."aside from that, Mrs. Lincoln, how was the play?"....Not all bad?...You gotta be kidding!

First, it's amazing that anything is selling. In spite abysmal jobless rates and a general wariness, 23 families decided there has never been a better time to buy a home, so they spent between $200K and $2M on something they thought would bring happiness and pleasure to them and their families. In spite of dire warnings of a double-dip recession, 17 families decided to buy a lake lot or a golf community lot to build a home sometime in the future.

Two of those sales were mine. One is a lake lot with a great view, in a very nice, upscale community near the Ritz-Carlton. The buyer got it for about two thirds the price paid for the lot right beside it 5 years ago. The other is one of the nicest homes I've seen anywhere here at the lake. The owwners were ready to sell (not desperate, but definitely ready), and they had overbuilt for the lot. My clients got a home that will serve their fairly young family wonderfully for the next 10 years, and will be a great place to call their permanent home after that.

Neither party "stole" their property. Both got absolutely great buys on an investment in lifestyle. So...Buyers are definitely in the drivers' seat, and more sellers are adjusting their goals to a more realistic expactation. A little common sense, some faith in the future, (and, hopefully, some good advice from their buyer's agent) kept the candle burning at Lake Oconee.

The "Due Diligence" period when buying lake and golf property

A couple of years ago, Georgia began using a Due Diligence period as an option for buying real estate. Its effect has been to simplify the process for both buyers and sellers between acceptance of an offer and closing.
The Due Diligence period is part of the initial Purchase and Sale agreement by which the buyer makes an offer on the sellers' property. It is a period mutually agreed by both parties during which the buyer conducts all investigation of the property...home inspections, surveys, soil tests, neighborhood eveluations...whatever the buyers choose to do to assure themselves that they wish to proceed to closing.
The typical Due Diligence period ranges from 7 days to a month, and during that period the buyer may terminate his agreement and have the earnest money refunded, no questions asked. Obviously, the seller wants this period to be as short as possible, while the buyers want as much time to evaluate the property as they can get.
If the buyer finds deficiencies in the property, there is a proceedure for revealing the deficiency to the seller and negotiating a solution...either the seller fixes the problem, or a price is agreed to reduce the purchase price and enable the buyer to fix it after purchase.
Advantage to the buyer?..the contract can be unilaterally terminated and the earnest money refunded for any reason during the Due Diligence period.
Advantage to the seller?..the property is "off the market" for a limited period of time; once the buyer passes the Due Diligence period without terminating the agreement, and any other special stipulations are met (there may be a financing contingency that extends beyond the Due Diligence period), the earnest money is non-refundable.
My observation is that, properly handled, the entire process is less prone to dragging out over weeks or months, and both parties know exactly what is expected of them.