IT was a sunny Monday afternoon, and the scene around the yellow-and-orange cabanas at La Piaggia Beach Club was laid-back and effortlessly chic. Waiters brought trays of chilled rosé, goose pâté and “les mini cheeseburgers.” Women, wearing cunning coverups that manage to cover up nothing, dipped their manicured feet into the sand.

A few attractive young bodies were leisurely sunning near the saltwater pool, but nobody was in the pool itself. It was just for show, as was the plaque on the weathered wooden front door falsely stating that the club was “members only.” With the blue waters and swaying palms, the scene at La Piaggia could almost be mistaken for St. Barts or Mustique. Except, of course, for the surrounding sea wall of beachfront condos that screamed Miami.

In recent years, the triangular district at the tip of South Beach has emerged as a chic yet relaxed alternative to the typical Ocean Drive frenzy farther north. It even has a hip moniker, SoFi, which stands for South of Fifth Street — the four-lane thoroughfare that cleaves the neighborhood from the rest of the area.

North of Fifth Street, club kids work off their hangovers at Ocean Drive madhouses like News Cafe, bachelorettes prowl for gallon-size frozen margaritas (with four straws) and busloads of tourists search for the Versace mansion. All the while, menu-wielding hostesses canvass passersby with two-for-one drink specials.

In contrast, the area south of Fifth almost feels like a gated resort — though, in reality, anyone can waltz in. More European than Daytona Beach-at-spring-break, the SoFi scene skews a little older, a little more arrived than arriviste, cushioned by the base of wealthy second-home owners from the area’s gleaming condos.

And just as downtown Manhattanites joke that they get nosebleeds north of 14th Street, SoFi residents have taken to saying that there is no reason to go above Fifth to socialize anymore.

For brunch-time gossip, locals pull up to Big Pink, a nouveau diner that functions like a general store. At sunset, Smith & Wollensky or Monty’s South Beach are the big draws, particularly on Fridays, to watch the looming cruise ships slowly move out to sea. If the wind is blowing in the right direction, strains of “Y.M.C.A.” or Bob Marley can be heard.

And for a crazier party atmosphere, there is the splashy Nikki Beach Club, where bronze bodies lounge on daybeds under private canopies, bottles of Piper-Heidsieck chill in ice buckets, and young women in turquoise Pocahontas-fringed bikinis dance to entertain guests.

While the beauty of South Beach is often obscured by the partying, SoFi denizens also make the most of this picturesque barrier island. Every day at 7 a.m. and 6 p.m., yogis meet for mixed-level classes at the pink lifeguard stand at the Third Street Beach, mastering their downward dogs in the ocean breezes while following the trajectory of the sun.

More yogis can be found at South Pointe Park, a 17.5-acre esplanade that reopened on the island’s southern tip in March after a $22 million renovation. During the day, the park is filled with young families, bikers and dog walkers — all enjoying the dune grass blowing in the breeze, wildflowers sprouting and waves lapping on the shore. At night, 18 light towers glow in different colors, illuminating an area that was once a scary needle park.

SoFi rose from the ashes of urban decay. For decades, it was a dangerous no man’s land — the only destination worth visiting probably was the venerable Joe’s Stone Crab, where diners ate secure in the knowledge that valets guarded their shiny Cadillacs.

Then, starting in the mid-1990s, as the revival of South Beach attracted developers to the natural beauty of the point, towering condos with multimillion-dollar apartments began to appear. Restaurants and other businesses trickled back in.

Among the pioneers was Myles Chefetz, who opened Nemo, a trendy spot with an outdoor courtyard, in 1995. “There were no signs of life,” said Mr. Chefetz, who now runs numerous restaurants and other hotspots in SoFi, and is known as the Sultan of South Fifth. “Nemo is in a former bum-laden crack hotel where they used to film ‘Miami Vice.’ ”

Hotels soon followed. Today, top-notch accommodations include a beachfront Marriott and the all-suite Hilton Bentley Miami/South Beach. They are joined this month by the Sense South Beach, a luxury boutique hotel with 18 rooms and a rooftop pool.

More hotels are on their way. In August, Mr. Chefetz is opening the Prime Hotel, a modern 14-unit resort next to Brown’s Hotel. Opening rates are set at $300 a night.

Not that SoFi is sleepy the rest of year; the demand for a happening scene is a Miami imperative. On a warm Thursday evening in late April, a crush of leggy patrons in miniskirts and high heels and their older boyfriends converged at the outdoor tables at Prime Italian, an offshoot of Prime One Twelve, the stylish steakhouse in Brown’s Hotel. (Both are owned by Mr. Chefetz.)

Prime Italian, with its clubby macho décor, is a restaurant conceived to separate pro athletes from their money via a culinary invention called Kobe meatballs. A crowd of overdressed and underdressed clamored for tables near the bar, where, recently, the N.B.A. star Antoine Walker sat watching a Celtics-Bulls playoff game. The scene prompted one visitor to tag it as Bentleyville in honor of the gridlock of $300,000 cars.

Yes, it may be SoFi. But it’s still South Beach.

IF YOU GO

WHERE TO DRINK

Ted’s Hideaway Tavern (124 Second Street, 305-532-9869), a dive bar for connoisseurs and after-work waiters, is open from noon to 5 a.m.

Monty’s South Beach (300 Alton Road, 305-672-1148; www.montyssouthbeach.com) is an overgrown tiki hut overlooking the marina, which draws everyone from speedboaters and weathered fisherman to surfers and young women in hip maxi dresses.

WHERE TO EAT

Smith & Wollensky (1 Washington Avenue; 305-673-2800, www.smithandwollenskysteakhouses.com) is called “Smith & Wo” by the chic and coiffed crowd, who all sport designer sunglasses (waiters included).

Joe’s Stone Crab (11 Washington Avenue, 305-673-0365; www.joesstonecrab.com) is a 96-year-old institution, so expect hours of waiting (no reservations taken), although greasing the maître d’ is a local art form. An order of large stone crab claws is $39.95 in the summer.

Prime One Twelve (112 Ocean Drive, 305-532-8112; www.prime112.com) is the original SoFi steakhouse. A 48-ounce Porterhouse for two is $88. Across the street is the new Prime Italian (101 Ocean Drive, 305-695-8484), where the spaghetti with Kobe meatballs is $35. On weekends, the street between the two is a block party.

Big Pink (157 Collins Avenue, 305-531-0888; www.bigpinkrestaurant.com) is SoFi’s commissary. Pizza from $9.95; a classic burger is $10.25.

La Piaggia Beach Club (1000 South Pointe Drive; 305-674-0647; www.lapiaggiabeach.com) offers a European vibe, including the menu. Tuna tartar with mango and soy sauce dressing is $21.50.

WHERE TO STAY

Hotel St. Augustine (347 Washington Avenue; 305-532-0570; www.hotelstaugustine.com) is an Art Deco-sleek boutique hotel, two blocks from the beach, but has no restaurant or pool. Summer rates start at $139.

South Beach Marriott (161 Ocean Drive; 305-536-7700: www.miamibeachmarriott.com) is directly on the beach with an Art Deco-style lobby and a Starbucks that’s filled with dog walkers. Summer rates average about $230.

Sense South Beach Hotel (400 Ocean Drive; 305-538-5529; www.sensesobe.com) is a gorgeous new hotel with a rooftop pool and ocean views. Rates start at $119 in the summer.

SURF AND TURF

F1rst (100 Collins Avenue; 305-397-8103; www.f1rstshop.com) is the shop for all things surf-related. Stand-up paddle board rentals, $30 for 90 minutes; surfboards, $20.

Miami Beach Bicycle Center (601 Fifth Street; 305-674-0150; www.bikemiamibeach.com) has bike rentals from $8 an hour to $80 a week.

MIAMI-The 52-story Infinity at Brickell condominium tower has received approval by the Federal National Mortgage Association, according to its developer, the DYL Group. The approval allows condo buyers to seek financing with the institution of their choice at higher loan-to-value ratios and better interest rates.Few projects in South Florida have been able to obtain Fannie Mae approval because of strict requirements including sponsorship by a lender and a rigorous application process, DYL stated. The review includes a top-down analysis of both the project and developer to ensure that the project’s financial backing is strong enough to make it successful.

“Buyers at developments that have not been Fannie Mae approved will face challenges since major financial institutions will be reluctant to lend money to these buyers, leaving them few options aside from hard money loans where interest rates are unfavorable,” says John Yanopoulos, DYL Group president and CEO. “That said, we are extremely pleased as this approval will open up many more financing possibilities for our buyers.”

Located in Miami’s Brickell financial district at 60 SW 13th St., Infinity features 459 contemporary condo units with floor plans ranging between 488 and 2,700 square feet with prices from $485,000 to $1.5 million. The project also incorporates office suites and ground-floor retail space.

Miami Beach Dodges a Cold Front

By SUSAN STELLIN

MIAMI BEACH on a recent Sunday hardly felt like a city experiencing the aftermath of a real estate collapse. There were cars backed up all along Ocean Drive, pedestrians jostling for shady sidewalk space in the heat and buff bodies dancing to a thumping beat along the beach.

Brokers are quick to point out that all the gloomy headlines about Miami’s condominium glut and Florida’s foreclosure crisis describe the situation on the other side of the causeway, not in the city of Miami Beach, especially the fashionable enclave of South Beach.

While South Beach has certainly cooled — inventory is up, prices are down, and agents say they’re working harder than ever to put together deals — anyone expecting to snap up a vacation getaway with views of the Atlantic for a song better search in a much less desirable part of the state.

“I get numerous phone calls from people who want to buy in Miami Beach, but they’re looking for that $58,000 condo,” said Allison Cotter, an agent with Esslinger Wooten Maxwell. “You have to say to them, ‘That’s not here; that’s over in Miami.’ ”

According to the Florida Association of Realtors, the median sales price for existing condominiums in the entire Miami area was $151,000 in March.

But the properties most second-home owners seek in Miami Beach — condos in luxury high-rises with views, beach access and pools — are still typically priced from $500,000 to $1 million on the low end (smaller apartments on lower floors that may need updating) and at $1 million to $5 million for the condos celebrities, athletes and moguls favor.

For instance, the former New York Mets catcher Mike Piazza has listed his three-bedroom condominium for $4.3 million, a reduction from the previous asking price of $4.9 million. Situated on the 31st floor of the Murano at Portofino near the tip of South Beach, it has panoramic views of Biscayne Bay, downtown Miami, the beach and the ocean, visible through floor-to-ceiling windows or from the wraparound terrace.

“There is no better view in the city,” said Jill Hertzberg, half of the Jills, a high-end Coldwell Banker brokerage in Miami Beach. Even so, the apartment has been on the market for more than half a year — typical these days, whereas condos in prime buildings used to sell in a few weeks.

“We’re starting to see deals now,” Ms. Hertzberg said, citing a three-bedroom condo in the Sunset Harbour complex, with views of Miami and Biscayne Bay, that just went into contract for $810,000, after the asking price was reduced to $949,000 from $1.2 million.

“He decided he really wanted to sell, and the price changed, and we sold it,” she said. “It was below the market, and that’s what this is all about.”

While prices have declined, they haven’t dropped off a cliff in South Beach because many of the newer developments were completed, and sold, before the market shifted in 2006.

But South Beach has not entirely escaped the wave of foreclosures and short sales — deals in which the price does not cover the entire mortgage but is high enough for the lender to forgive the remaining balance — that have swept the rest of the state. An oceanfront town house is listed as a short sale at $1.7 million; it sold for $3.2 million in 2006. A bank-owned condo in a luxury high-rise, stripped of its fixtures, was purchased for $1.35 million in 2006 and is now in foreclosure at $599,900.

Some of these deals even inspire words that have not been heard much lately. “Bidding wars are developing,” said Tom Bellantoni, an antiques dealer who owns a store in Stamford, Conn., but spends most of his time in Florida and has been looking at properties in Miami Beach for a year.

“I was counting on finding a foreclosure or short sale,” Mr. Bellantoni said. “But what has been happening is that as prices come down everybody is trying to take advantage of the opportunities so people jump on them.”

Since he hasn’t found the right property in Miami Beach in his price range — up to $600,000 — he and his brother recently made an offer on a five-bedroom house in Miami, a short sale listed at $499,000.

“It’s not a done deal yet because the bank has not approved it,” Mr. Bellantoni said. “But I am the high bid so far.”

In Miami Beach, a lot of the newer luxury high-rises are clustered in the South of Fifth neighborhood at the island’s southern tip. The influx of high-rises has affected sales of single-family homes in Miami Beach, which these days appeal more to full-time residents or people who spend at least half the year in the area.

“Before we had such nice condos, a lot of people would buy houses as second and third homes,” said Kevin Tomlinson, an agent with Esslinger Wooten Maxwell. “But as condos became larger and more chic, you don’t see that as much. That’s why there’s such a huge back-up of large homes for sale.”

Among those homes is a renovated eight-bedroom villa on the Indian Creek Waterway with luxury amenities like his-and-her bathrooms in the master suite, a built-in coffee/espresso maker in the upstairs morning kitchen, a boat dock and Tahitian pavilions for dining and lounging around the pool. There’s also an outdoor kitchen. The villa went on the market for $11 million; now it’s listed at $7.9 million.

Sheri Falco, a lawyer who bought a two-bedroom bungalow with a yard near Flamingo Park in 2005, has dropped her price from $675,000 to $499,000.

“I show my house constantly, but I haven’t gotten an offer yet because it’s still a little bit high,” she said, explaining that she doesn’t want to go lower based on what she owes on her mortgage.

“I bought it at the height of the market, and I’m trying to sell it at the current low market — that’s how I roll,” she joked, citing efforts to chase millionaire status during the dot-com boom. “Maybe I’ve learned my lesson.”

According to the Realtor Association of Greater Miami and the Beaches, the number of sales for the region has increased almost every month since last summer, though most of that activity is in the lower price ranges, partly because of the difficulty obtaining financing at the higher end.

These days, real estate agents talk about great deals, and for some properties that may not be far from the truth.

“You can make a case that with the foreclosures, auctions and short sales on the market there are now some buying opportunities. And I haven’t said that for five years,” said Jack McCabe, a real estate consultant in Deerfield Beach, Fla.

But Mr. McCabe cautioned that buyers should plan to own a property for five to seven years and that condo shoppers should rigorously vet the finances of the building to ensure that the other owners are current on their association payments. At some developments that are still under construction or were only completed in the last year, buyers have been walking away from down payments and abandoning deals as they’ve seen the value of the units tumble.

“The Lincoln Road area is kind of the dividing line,” Mr. McCabe said, referring to the pedestrian mall that crosses Miami Beach near 17th Street. “The projects that are south of there are doing O.K.; the projects that are north of there are struggling.”

He also suggested that the bargains aren’t likely to disappear anytime soon.

“We really expect that the deals will get better over the next 12 months and there will be even more inventory to select from,” he said. “It’s my belief that we’ll see prices drop another 10 to 15 percent, and then it’s going to stay at that bottom for another couple of years.”

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LIVE HELP AND CHAT NOW ONLINE AT ZILBERT.COM
We have implemented a live help and chat feature on our main website.  Just look for the LIVE HELP buttons as you browse properties on our site.  With the click of a button, you will be instantly connected to a chat session with myself or one of our sales agents.  You can ask us questions, get extra information on properties, or simply learn more about the market.   We are always available, and we continue to invest in technology and tools that benefit our clients.
 
ATTENTION REALTORS!
We want you to join us!  Our business is growing, and we continue to look for experienced and talented realtors.  My management style allows you to work as independently as you like, but with the power of our technology and sales teams behind you.  As you know, the web generates a tremendous amount of business, and our company is on the forefront of technology.  Our realtors are enjoying continued success, despite the slower market.  Let me show you how we do it!  We are also looking for realtors who speak any of the G20 languages, including Italian, French and German.
 
WANT TO SEE WHAT’S SELLING?
Did you know that we post the 100 most-recent South Beach sales on our site?  This list changes continuously, so it’s a good way to keep up on the market.  Visit our online sales list anytime at:  http://www.zilbert.com/100_most_recent_sales.asp
 
You can also learn the selling price of most condos by visiting any of our condo pages.  At the bottom of the page is a quick form that you need to fill out (your name and email address).  Then, we instantly send you a sales history for that condo.
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MIAMI SPICE SPRING EDITION
Every autumn, many of Miami Beach’s restaurants introduce the MIAMI SPICE menu.  This is a fixed price menu that allows you to enjoy some of Miami’s greatest restaurants at bargain prices.  This year, we get to have the SPRING MIAMI SPICE.  Lunch menus are fixed at $23 and dinner menus are fixed at $36 per person.  You won’t be disappointed.  Read more about it here:  http://www.ilovemiamispice.com/

They say you can’t fight County Hall, but thousands of South Florida property owners are trying.With the steep slide in property values, the Miami-Dade Value Adjustment Board has been swamped with a record 70,000 appeals from property owners for 2008, compared with 51,571 a year earlier. In Broward County, the number of appeals to the VAB rose to 29,729 from 26,802 the prior year.

The boards can overrule the property appraiser, doling out big tax savings to property owners.

Special magistrates are currently working through a heavy calendar of hearings on 2008 property assessments, which are based on 2007 property values. Those tax bills were due March 31, but with so many appeals, the sessions will drag on well into the fall.

”Property owners are not happy with their property assessments,” says Robert Alfaro, manager of the Value Adjustment Board in Miami-Dade County. “Market values have come down, and they feel their properties shouldn’t be assessed at the levels they’re seeing.”

But a key point to remember is that property assessments aren’t based on today’s values; they look backward.

CHANGES IN VALUES

That means tax bills for 2008 reflected property values in 2007, before the market really went south. But 2009 assessments will be based on property values between Jan. 2, 2008, and Jan. 1, 2009 — a period when home prices really tanked.

”When 2009 assessments come out, it’s really going to be interesting,” says Gary Appel, who specializes in appeals for property owners.

During 2008, the median price for a single-family home fell 23 percent in Broward and 27 percent in Miami-Dade, according to the Florida Association of Realtors. Median condo prices plunged 29 percent in Broward and 12 percent in Miami-Dade last year.

Will county property assessments match those radical drops? Property owners will find out this summer. TRIM, or ”truth in millage,” notices of proposed taxes are mailed the last week of August.

Many property owners are counting on big cuts.

”They taxed everyone on artificially high numbers, inflated by liar loans and fake appraisals. Now they need to come back down to the real world and real values,” says Philip Logue, a Coral Gables real-estate investor who has appealed assessments on various properties.

Property owners sometimes save thousands of dollars by appealing to the VAB. For the 2007 tax year, for example, taxpayers got back $97.2 million through VAB appeals and shaved $4.81 billion from the taxable value of property in Miami-Dade County.

ADJUSTMENTS SOUGHT

”There are quite a few cases that warrant adjustments,” says Patrick J. Mikus, an appraiser who works as a magistrate in Miami-Dade.

Logue says appealing is worth the effort. This year, he has already won several reductions on Miami-Dade property.

A special master at the Value Adjustment Board, for instance, recently trimmed nearly $54,000 from the assessed value of his Coral Gables duplex at 5411-5431 Granada Blvd., reducing it to $676,000 and saving him $1,058 in taxes.

Logue hopes that his 2009 TRIM notice will more accurately reflect South Florida’s declining property values. ”I’m looking for the county on its own to lower assessments this year without me having to hire somebody [to appeal] to bring the values down,” he says.

One caveat about winning a VAB appeal: Property appraisers, relying on computer-assisted mass assessments, often jack up an assessed value again the next year after someone wins an appeal.

Fanny Behar Ostrow, who owns a rental property at 950 Viera Ave. in Coral Gables, won a reduction last year, shaving thousands of dollars from her tax bill. But the next tax bill raised the assessment again, ignoring the VAB’s action.

”I got like a $3,500 refund last year. Now the [assessed] value is right back up again, and I have to appeal again,” she says.

That helps keep the cottage industry of tax-appeal specialists in business. But now they have new clients: With home prices still falling, even many homeowners with homestead exemptions, which qualify them for a Save Our Homes cap on property-tax increases, are challenging their assessments.

Under Florida’s Save Our Homes amendment, assessed values on homestead properties can increase by only a maximum of 3 percent a year regardless of how much market values increase.

COUNTING ON THE CAP

That cap saved many long-time residents from hefty tax increases as prices spiraled higher during the boom. But now some property owners think their property values have slid beneath the cap mandated by Save Our Homes and have filed appeals.

For 2009 assessments, Broward County property appraiser Lori Parrish says she is finding many cases in which “the just value is dropping below the Save Our Homes value.”

Existing home sales rose 20 percent last month with a total of 9,858 homes sold statewide compared to 8,181 homes sold in February 2008, according to FAR. February’s statewide existing home sales were 16.7 percent higher than January’s statewide sales.

Florida Realtors also reported a 15 percent gain in statewide sales of existing condominiums in February, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 25.1 percent over the total units sold in January.

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in February while 11 MSAs also showed gains in condo sales. It marks the eighth month in a row that a number of markets have reported increased sales.

Florida’s median sales price for existing homes last month was $141,900; a year ago, it was $199,300 for a 29 percent decrease. Industry analysts with the National Association of Realtors(R: 26.48, 0, 0%) (NAR: undefined, undefined, undefined%) report a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in January 2009 was $169,900, down 13.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $254,350 in January; in Massachusetts, it was $321,000; in Maryland, it was $244,820; and in New York, it was $205,000.

Significant variations in local markets continue, according to NAR’s latest housing outlook, which also notes that it will take time for the impact of the economic stimulus to show in housing data. “Some markets appear to have reached the tipping point of accelerating home buying,” said NAR Chief Economist Lawrence Yun. “Improvement from the economic stimulus isn’t likely to show as closed home sales before summer, although we may see an earlier lift from lower mortgage interest rates.”

NAR analysts estimate the impact of the federal economic stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package. By the end of the year, NAR expects inventory to fall below an eight-month supply, which would be consistent with home price stabilization.

In Florida’s year-to-year comparison for condos, 3,198 units sold statewide compared to 2,785 sold in February 2008 for a 15 percent increase. The statewide existing condo median sales price last month was $109,300; in February 2008 it was $173,900 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $174,400 in January 2009.

Interest rates for a 30-year fixed-rate mortgage averaged 5.13 percent last month, down significantly from the average rate of 5.92 percent in February 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s medium-size markets, the Fort Pierce-Port St. Lucie MSA reported a total of 372 homes sold in February compared to 263 homes a year ago for a 41 percent increase. The existing home median sales price was $122,100; a year ago, it was $172,900 for a 29 percent decrease. In the year-to-year comparison for the existing condo market, a total of 71 units sold in the MSA last month, up 22 percent compared to 58 condos sold the previous February. The market’s existing condo median price was $116,700; a year ago, it was $126,700 for an 8 percent decrease.

Two charts showing statistics for Florida and its 20 MSAs are attached. One chart compares the volume of existing, single-family home sales and median sales prices in February 2009 to February 2008 based on Realtor transactions; the other compares the volume of existing, condominium sales and median sales prices in February 2009 to February 2008 based on Realtor transactions.

The Florida Association of Realtors(R: 26.48, 0, 0%), the voice for real estate in Florida, provides programs, services, continuing education, research and legislative representation to its 125,000 members in 67 boards/associations.

CHICAGO (MarketWatch) — Those searching for the best housing bargains on the market might consider buying a short-sale property. But there’s an important qualification for buyers interested in going this route: They need plenty of patience.

In a short sale, a homeowner’s lender agrees to accept less than is owed on the mortgage for the property. It’s a useful alternative for borrowers underwater on their mortgage and on their way to foreclosure. As home prices continue to decline, short sales have become a viable option for those who need to sell.

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“Over the past three to six months, the servicers have really become aware that short sales are the best way to reduce their losses… when a modification is not an option,” said Travis Hamel Olsen, president of National Short Sale Center, a company that facilitates short sales nationwide on behalf of homeowners and real estate agents. The short-sale option also is less damaging to a seller’s credit than a foreclosure, he said.

A short sale can also be attractive to a home buyer since the lender will often accept bids on the property that can be 10% or more below the market value, determined by the prices of comparable, nearby properties, Olsen said.

Although the mortgage balance is probably greater than the price a seller could expect in a traditional sale, the lender may be willing to take less than it’s owed in a short sale if it can avoid the further expenses of foreclosing and taking over the property. The savings, however, often come at the expense of a home buyer’s time.

“Short sales should be called long sales,” said Leslie Tyler, vice president of marketing for ZipRealty. “In some cases, it could take months for a buyer to hear back from a lender.”

For Kristine and John Williams the savings seem to be worth the wait.

Kristine Williams says they’ve found “the perfect house” in Brentwood, Calif., although the process is taking longer than they originally thought. The couple waited four months for an answer from the bank, and then had to revise their bid lower as the market continued to sour.

Their current bid is $550,000, on a home that was appraised at about $1 million three years ago. They’re hopeful the current bid will be successful, but realize it could be months before they find out if the offer is accepted.

“In general, it takes a minimum of two months to get a response from the bank whether they will accept or counter your offer,” said Rob Jenson, CEO of The Jenson Group, a Las Vegas-based real-estate firm. “That process could take longer.”

Are the savings worth it to you? Consider these five caveats before shopping for a short sale:

1. You’ll wait in the dark

Perhaps just as frustrating as the wait time is the fact that you likely won’t be privy to details as the deal is progressing. That could mean going months without an update.

Banks are “ramping up their capability for short sales,” said Dennis Green, general manager of ForeclosurePoint.com. But it hasn’t made the process much easier.

“Where our buyers have been the most frustrated is the lack of status or information,” Tyler said. Saying “we want an answer by this Friday or we’re going walk… doesn’t make a difference,” Jenson said.

There are reasons for the wait: A lender could be considering multiple offers. If the seller had both a first and second mortgage, that could also make the process more complicated. The Williamses ran into both scenarios, slowing their process down — and that’s not unusual. The homeowner also has to prove their financial hardship to the lender.

2. Banks will make you a deal, but within reason

There are deals to be found in short sales — but don’t expect outright steals. A buyer needs to make a fair offer, based on comparable homes that have been sold recently, Jenson said. The offer should be aggressive, but not ridiculous, he said.

“The misconception is that banks should be happy to get it off the books,” he said. “They are, but to a certain point.”

Homes that have already been foreclosed on may be even less expensive than a short sale, Tyler said. But bank-owned properties also might be in worse shape, especially if the foreclosure home has been sitting vacant for some time, she added. It’s important to consider the cost of necessary repairs before buying any distressed property.

3. Sales are ‘as is’

In a short sale, it isn’t likely that you will get allowances from the seller for repairs that are needed, as you might in a traditional sale, Jenson said. Do a home inspection and know what you’re getting into, but remember that your bid is for the property “as is.”

“The seller will not give you a credit for repairs,” he said. “The last thing they will do is make repairs.”

4. Have a back-up plan

Even if you decide to bid on a short-sale property, it might be best to keep looking anyway.

“There is no guarantee with short sales, and if the buyer is smart they will put an offer on a short sale they like and continue to look at properties that interest them,” Olsen said. It isn’t uncommon for people to find a home they like better and kill the short-sale deal, Green said.

That said, when a offer is accepted and earnest money is put down, remember that you risk losing those funds if you decide to walk away and buy another home, he added. It may take months before the deal closes, even after the offer is accepted.

5. It’s not only about price

“One thing to not lose sight of is you’re buying a house to live in. Buy a house you like,” Tyler said. She recommends that prospective buyers remain open to properties of all types — short sales, bank owned and traditional sales — and compare prices and features.

A short sale is only a bargain if it’s a home that you truly want to live in — not something you’re drawn to only because of its low price tag.

Amy Hoak is a MarketWatch reporter based in Chicago.

Fannie Mae buys the majority of home loans from lenders, so it wields significant power in the making of mortgages. Fannie-backed loans generally offer the best rates and lowest down payments for borrowers.

The company, wracked with financial problems of its own and in conservatorship with the federal government, said it singled out Florida after a review of its mortgage loans revealed record-high default and foreclosure rates among condo owners. It also cited the excessive number of condos listed for sale, which has driven down prices.

The new rules come at a time when condo buyers already face difficulties getting mortgages. Many banks over the past two years have dramatically pulled back on condo lending, requiring down payments of up to 40 percent in new buildings. Some lenders even have blacklisted condo buildings, citing a high risk of price declines and defaults.

Fannie Mae’s timing ”couldn’t be worse,” said Jack McCabe, a South Florida real estate consultant who believes the region is mired in a housing depression. “This is effectively going to make it much more difficult to qualify.”

NEEDED TO QUALIFY

The new conditions include:

• No more than 15 percent of unit owners can be 30 days or more past due on association fees.

• For new condo buildings and condo conversions, at least 70 percent of units must have been sold or put under contract. That’s up from 49 percent previously.

• Fannie will have to review condo buildings itself to make sure they meet Fannie requirements — at the lender’s expense. Before, Fannie relied on the lenders to perform these reviews.

Charles Foschini, vice chairman of debt and equity finance for brokerage …, said Fannie was protecting investors, borrowers and taxpayers, as it should in a climate of increased risk.

Borrowers will benefit, he said, by knowing they are moving into a condo complex that is adequately funded and has plenty of reserves, allowing them to predict their monthly expenses.

”From the taxpayer’s perspective . . . the quicker we can instill sounder underwriting practices for mortgages for Fannie or anyone else the more confidence we’ll have in the market,” Foschini said.

`NAILS IN THE COFFIN’

But many condo buildings won’t meet those requirements, meaning the buildings most in need of bringing in fresh buyers will increasingly have trouble doing so.

Sharon Dodge, president of the condo association at The Venetia, a 30-year-old building next to the Venetian Causeway in Miami, said about 32 percent of unit owners were past due — more than double Fannie’s new rules.

She described the rules as ”driving the nails in the coffin,” just as the association is making headway on collecting delinquent payments and when sales were finally picking up.

”To have the major source of loans draw a line through us is terrible; it’s wrong and it shouldn’t happen,” Dodge said. “The feds can’t pull the rug out from under us.”

POTENTIAL FALLOUT

McCabe estimates as much as 25 percent of the market in the tri-county area will be shut out of Fannie-funded financing.

Peter Zalewski, … specializes in bulk sales of distressed condos, said his figures show that as many as 41 new buildings between the Julia Tuttle and Rickenbacker causeways, and from I-95 to Biscayne Bay, may be ineligible for Fannie Mae approval because they don’t meet the new 70 percent ownership threshold.

”It’s devastating,” Zalewski said.

Fannie is not the only source of funding for lenders who want to make condo loans. But John Bancroft, executive editor with trade publication Inside Mortgage Finance, said No. 2 mortgage guarantor Freddie Mac typically follows Fannie Mae’s lead and would likely implement Fannie’s guidelines soon.

The two companies owned or backed nearly $900 billion in new home loans in 2008, more than two-thirds of the market overall. Ginnie Mae is the major guarantor for FHA and VA loans. Few new buildings had been able to meet FHA certification requirements either, Zalewski said.

WHO BENEFITS?

Because few lenders are holding loans in their own portfolios, the Fannie vacuum could create new opportunities for cash-rich buyers who will be able to command even greater discounts, predicted Grant Stern, principal broker of Miami-based Morningside Mortgage.

”Fannie Mae declared Christmas for hedge funds who want to buy bulk in these buildings, but it’s leaving everyday investors and people who want to buy for their own personal use in the dust,” Stern said.

Stern added the restrictions further exemplified the self-fulfilling, cyclical nature of the credit crisis because Fannie’s action would bring about further price declines, more foreclosures and potentially more losses for the company.

”It starts with fear, then a reaction. Then the reaction causes that fear to occur, which then confirms the fear and causes a further negative reaction,” Stern said.