How to get the biggest bang for your real estate buck in the Virgin Islands.

If you checked out my post on September 5, 2007 I wrote about why buying real estate in the Virgin Islands during hurricane season might be a GOOD idea. Well, I have had further discussions with my friend, Chris, who is selling real estate in St. Thomas and I have suggested that he target market the Buyers from the U.S. with an idea of how to organize a “low ball” offer strategy for Virgin Island real estate.

Here goes…I pulled up a condo in Cowpet Bay, St. Thomas in the Nazareth section of Red Hook and used it as a testing site. It is a 2-bedroom, 2-bath condo right on the water with spectacular views of Cowpet Bay. It is priced at $595,000 and has been on the market for over 65 days. So, I decided to use this condo as a test site for my theory of why it makes sense to buy Virgin Island real estate during Hurricane season – July through October. Here are my simple strategies. ( In fact, these could be used anywhere to see if a “low ball” offer has a chance of being accepted.)

• Do your homework regarding the what the price is of similar properties that have sold in the last two months. Notice any downward trends during this two month period, because as hurricane season progresses, home prices seem to decline. ( I should mention that to get this information you will need to contact a Realtor to assist you.)
• Notice what the length of time the properties that actually sold were on the market. If the property you are considering has been on the market longer than the ones that have sold in the last two months you can make an assumption that there is flexibility in the listed price.
• What is the price per square foot of similar condos that have sold in the last two months in the Cowpet Bay area? The more you can pinpoint where the property is the more accurate this number will be. How does this number match up with the price per square foot of the condo you are considering to purchase in Cowpet Bay?
• What are the terms and conditions you can structure in your offer that will make it very attractive to the owner to consider given that you are asking him/her to sell it for a much reduced price for the listed price? For example, can you close escrow quickly – less than 30 days? Are you comfortable accepting the property in an “as-is” condition? Are you able to provide the seller with a non-contingent financing feature – this means you already have all of your financing arrangements completed.
• Present your homework findings in writing to the seller regarding what you and your Realtor have discovered – pricing, days on the market, price per square foot, etc.

If I was representing the Buyer, I would have a very compelling presentation to the Seller’s Realtor as to why this offer made sense and why the Seller should accept it immediately. (My homework concluded that the price this condo may sell at is around $525,000 given a strategy with the outline of the above terms.) This has been a strategy that has been very effective in Buyer’s Markets. Take a moment and consider it as a game plan for you to use anywhere with your real estate purchases. ( Note: Several years ago in a Seller’s Market, this strategy did not have a chance of working because properties sold within days instead of months, for more than what the asking price was.)

Let me know how this strategy works for you on your next purchase. Until next time…