Archive for the 'General Real Estate' Category

Say “NO” to Buyers Remorse

Published at September 27, 2007 in General Real Estate. 0 Comments

Buyer’s remorse is not something that anyone wants to deal with. I have personally second guessed even the smallest of purchase. However, this is most true in the case of buying a home, when feeling remorse over the purchase can be even more intense due to the nature of the cost of a home. After buying a home, buyer’s remorse can make a buyer who once felt confident about his purchase start to doubt that it was the right decision.

Because many real estate markets today are buyer’s market, there is often a lot of time to negotiate on price and to fully think the purchase through before anything is finalized. This reduces the chances of buyer’s remorse. However, it is still quite common, especially among first-time home buyers. Buyer’s remorse can also have the opposite effect, especially when it is a buyer’s market. This type of market can lead people to wait too long to make an offer on a home that they are very interested in and this lead to non-buyer’s remorse. Luckily, there are some things that can be done to help prevent buyer’s remorse and to get rid of it if thoughts of doubt have already started to set into the buyer’s mind.

The first thing that any buyer should do is to make sure they know what they are looking for. This means taking all things into consideration such as the home itself, the distance from work or school, and the neighborhood. When looking at an investment property make sure you keep in account the distance to the attractions and the community amenities. Looking at many different homes in many different areas can help pinpoint these needs and make sure that the buyer gets exactly what they want. The more a buyer looks around and looks at many different houses, the better feel they will have for what that particular market is like. It’s also important to not only focus on what the market is like at that particular time but what it will be like in the future for that area.

Another way to beat buyer’s remorse is to get pre-approved for a mortgage. This allows buyers to go into house hunting with a clear idea of what they can afford for monthly payments and will take away a lot of uncertainties that cause buyer’s remorse.

Making sure that you know the current real estate market and that you are educated on current prices and home sales in the area can also help beat buyer’s remorse, especially once everything has been finalized and all the paperwork has been done.  Ask your realtor to give you a complete list of comparable properties sold in the past 6 months. Knowing that you have done your homework and have made an educated financial decision when purchasing your home is very reassuring.  A good real estate agent can also remind the buyer what attracted them to the home in the first place and can help reinforce the fact that the home was purchased for a very good price.

Once in your new home personalizing the space can also help. When one truly makes a home feel like their home, there is a sense of ownership that comes along with that and that can help beat buyer’s remorse. Something as simple as changing the carpets or coloring the walls can really add personal touches to the space and make one feel as though they made the right decision in purchasing their home.

Once all of the paperwork has been finalized, there’s really not a lot that can be done to get out of the deal. Buyers need to remember this and not dwell on the fact that they think that a better deal may have come along. Remembering that this was not something they entered into lightly and that they made an educated and informed decision will help reassure them that they made the right decision.

1031 Tax Exchanges

Published at September 16, 2007 in General Real Estate and Orlando Investment Properties. 0 Comments

orlando 1031 tax exchangeOver the years I have had many investors / vacation home buyers ask about upgrading to a bigger property. In most cases the best way to do this is by utilizing a 1031 tax exchange. A tax deferred exchange makes it possible for an owner to sell a piece of investment property and buy a new property using the profits from the sale without having to pay taxes right away. Taxes are not due until the owner decides to sell the new piece of property. The reason for this is that when a property is sold or exchanged to buy a similar piece of property, the new property is seen as part of the initial investment.

These tax deferred exchanges are an opportunity that everyone can benefit from, not only seasoned investors. This can be done by purchasing an investment property and selling it after a year of renting it out. Two more properties can then be purchased from the sale. It is important to keep in mind that if this is practised too many times, the IRS may not view the owner as a long term investor and will stop allowing for such exchanges to take place. It’s essential to hire a lawyer or a CPA when participating in these types of exchanges as they will know everything involved in the process and there is too much risk if a professional is not used.

These professionals can outline things that may come up in an exchange such as the time period in which the new property must be bought. The property must also be closed within a certain time of purchase and these restrictions do not allow for any extensions.

The property must be identified by the buyer in writing and brought to the professional that is helping with the exchange. This has to be done with forty-five days of the sale of the original rental property. More than one property can be used as the replacement property, as long as the total value does not exceed two hundred percent of the original property’s value. Not all properties that are identified need to be closed either. If there are more properties on the identification document than allowed, they will be treated as regular sales and they will have tax owing on them.

After the properties have been properly identified, the buyer then has one hundred and eighty days to complete the sale of the exchange. If the original property is sold after this period or after the due date of the return, the properties will not be treated as similar property and tax will be owed.

Boot is something that needs to be avoided as it consists of money or any type of unlike kind. This can include things such as a car being given as a down payment. This will be exchanged whether or not the exchange was carried out properly. The professional helping you with the exchange should also look at the deal to make sure that there was nothing received that could be considered boot.

Related Topic: Orlando Investment Properties

Orlando Forclosures

Published at August 31, 2007 in General Real Estate, Market Reports and Orlando Real Estate. 0 Comments

Are you interested in buying a distressed property? Pre-foreclosure filings were on the rise last month in Florida, placing it at the No. 2 spot across the nation for total filings and filings per capita, claims Foreclosures.com.

Orlando ForclosuresIn first place was California with 132,101 year-to-date pre-foreclosures, and Florida followed closely behind with 111,236. Florida was also just behind Nevada’s 2.55 percent per capita with a 1.76 percent per capita.

In July alone, Florida had 21,120 filings, which was well above the 13,005 filed in June. These were still very close to the numbers in California who had a total of 23,662 filings in July. However, they were much higher than the 6,498 cases filed in Texas.

A report from Realty Trac. shows that Florida is number two in the rankings of the most foreclosures in the United States for the month of July.

Florida was also ranked seventh in the entire country when it came to foreclosure rates. This includes one filing out of every 431 households. This is 1.6 times the entire country’s average.

Last month there were a total of 179,599 filings reported last month. This number was an increase of nine percent of the previous month and a whopping ninety-six percent increase from July 2006. The report also indicated that for every 693 households, there is one foreclosure filing.

Pre-foreclosures occur when homeowners are in default on their mortgages and may also have notice of default or notice of auction included in them. Not all pre-foreclosures end in the homeowner losing their home.

However, up until July of this year, 18,935 homes in Florida were taken from homeowners under pre-foreclosure. This makes up for 0.3 percent per capita. In July alone, 4,268 homeowners lost their homes, a huge increase from June’s 2,691. Even with these staggering numbers, the state still does not rank among the country’s top ten for homes lost due to pre-foreclosure.

The country’s total of pre-foreclosure filings totalled 617,162, which is 0.8 percent per capita. Of those, 100,421 were in July alone. Homes lost to pre-foreclosure were at a total of 300,938 or 0.37 percent per capita. In June there were a total of 51,373 in the country, which was still not as many as 41,535 homes lost in the month of June.

These numbers are not good but they are bound to continue for another twelve to eighteen months. This spells bad news for homeowners that aren’t even in default yet but may be in the near future as these numbers are sure to make for tightened credit markets, making it even easier for homeowners to eventually lose their homes.

If you are looking to Purchase a distressed property now is a great time. I can assist you in finding  and purchasing these types of properties at no cost to you.  Please contact Jeffrey Funk at 407-438-4028 or use my contact form.

Orlando Home Sales Continue to Decline

Published at August 30, 2007 in General Real Estate, Market Reports and Orlando Real Estate. 0 Comments

Homes prices in the Orlando area are continuing to be lowered. During the second quarter, Orlando experienced a forty percent drop in sales on single-family homes. The number of home sales dropped from 8,189 last year to 4,933 for the same time period this year. The average sale price has also dropped from $265,500 in the second quarter of 2006 to $253,800 for the same time this year.

Condo sales for Orlando have also dropped by sixty-one percent. During the second quarter of 2006 the figure was 1,456, compared to 572 for the same period of time this year. Average sale prices for these condos have also dropped from $163,500 in the second quarter of 2006 to $155,700 this year.

The entire state has experienced a decrease in single-family homes. During the second quarter of 2006 sales totalled 53,723. That number was down this year to 37,709. For existing homes the average sale price has also fallen from $250,400 in the second quarter of 2006 to $239,200 this year.

Condo sales in the State of Florida have also suffered with a twenty-five percent decline. This number went from 16,566 in the second quarter of 2006 to 12,415 for the same time this year. The average sale price of a condo has changed very little although that too has decreased. This figure dropped slightly from $211,200 in the second quarter of 2006 to $208,400 this year.

Considerations when Building a New Home

Published at August 25, 2007 in General Real Estate, New Home Construction and Orlando Real Estate. 0 Comments

Orlando New HomeThere really is nothing like moving into a new home where nothing has been used and there is no redecorating that needs to be done. A home that is one hundred percent, truly and only yours, brings about a feeling like no other. However, there is much more to building a home than some might think. Below are a few key things to keep in mind when building your dream home.

Consider very carefully where the home is going to be built. Check to make sure that any lots that you are considering building on are actually zoned for building. Although the real estate agent or the seller may tell you that this is not a building lot, this is not their responsibility so if you don’t check it out for yourself, you could end up with a lot that you can’t do anything with. If the home is close to many vacant lots, there could be a commercial site or a school going in. Not only will this be messy during construction but it will also make the area one of high-traffic once you are settled in your new home.

Building codes are extremely important when new construction of any kind takes place. Again, it is the new homeowner’s responsibility to ensure that any codes are met and even go above and beyond the requirements. Such codes could include floodin and hurricanes.

Make sure that you understand the costs of insurance and property taxes. Don’t rely on real estate agents and construction workers to give you proper estimate to how much these costs will be. Property taxes on a vacant lot will be much less than that of the actual taxes after construction has taken place. To find out these costs for yourself, talk to the local tax collector’s office and they will be able to give you a better estimate. Also make sure to contact an insurance agent to make sure that you will have all the coverage you need for flooding, hurricanes, earthquakes, or any other factors that you may not have considered.

One of the most important aspects of building a new home is selecting the builder. This will probably be one of the most important decisions you make as you will be interacting with the builder often, and they are responsible for getting the project done on time and within budget. The builder is also responsible for hiring any sub-contractors that will be working on the project and if the builder doesn’t pay them, the onus is on the owner. When selecting a builder, ask for many references and contact all of them to make sure you know what working with that particular builder entails. Also ask to see some of the homes that they have constructed.

Any time one works with a sub-contractor, there is risk involved. This is because they will place liens on the property to make sure that they get their payment. If the sub-contractor does not get paid by the builder, you will be responsible for paying them, even if you have already paid the builder. Make sure that any time a sub-contractor is paid, the release the lien on the property.

Don’t only choose a lender carefully but know your options when entering into any financial arrangement. When lenders grant a construction loan, they pay the builder directly with a number of “draws” at set times. This means that the homeowner has no control over when the builder gets their money and payment cannot be withheld if the owner is unsatisfied with the work. Here again it’s very important to choose a lender carefully and ask lots of questions and for references before settling on one.

If the homeowner decides that they would like the option of withholding payment, finding another way to pay may be an option. This could include a home equity loan or a line of credit. If the owner decides to go this route, it’s very important that they be aware that this involves a much more hands-on approach to all aspects of building.

A very attractive option may be an end loan which are sometimes offered by larger building companies. In this instance, a homeowner does not pay anything until construction has been completed. The customer is then paying only for the home without having to worry about paying for construction along the way. Another advantage to these loans is that the interest rates are very often lower than those of regular construction loans. One disadvantage is that an arbitrator or mediator is sometimes needed if the homeowner is dissatisfied with the finished work.

Flexibility in a lender is also very important. If the loan documents state that the project must be finished within twelve months, this will mean that the loan will be interest only for the first twelve months and will then convert to a regular mortgage. If there is a delay the homeowner could end up paying more than they need to. Before entering into any agreement, you should ask what the options are for extending the construction loan should the project take a little longer than expected and what fees there are attached with that. If the fees are too high, it’s worthwhile to switch to another lender.

Also be sure to watch for any hidden fees that the lender may be charging. Quite often, the lender will want to inspect the site before handing out another draw. There are a few ways to manage these fees. One way is to carefully inspect the draw and inspection schedules and make sure that there are not more inspections than there are draws. Another way is to try and get a couple of visits consolidated into one.

Also look at the structure of the loan. After the house is built, the construction loan will convert to a regular mortgage. However, the mortgage structure needs to be decided on before the house is built. This can raise many other concerns, which will need to be discussed with the lender.

You may also want to consider buying a spec home that is already built. This can save a lot of headache during the construction process as you will not be a part of it. There are many newly built homes that are sitting empty and waiting to be sold. Finding one of these can give you your dream home without any nightmares.

Jeff: Orlando Real Estate

Question to ask when purchasing a condo

Published at August 24, 2007 in General Real Estate, Orlando Investment Properties and Orlando Real Estate. 0 Comments

Orlando CondominiumOnce you have found the condo that you believe is perfect for your tastes and lifestyle, there are some questions that should be asked before any purchase is made. These key questions will prevent you from being stuck in a bad homeowner’s situation and will make you more prepared for what you are getting yourself into.

 

The first question that you should be asking is what the other owner’s complaints are. Remember that if you were to move in, there’s a good chance that these complaints could become your own. Reading the minutes of past association meetings will provide good insight as to what any problems are. Of course, the present owners may not have anything to complain about but reading the minutes is still a good idea. They may show that there are things in the works for the condo and these could be things that the seller hadn’t mentioned.

The next thing to find out is who is paying their association dues, or at least the percentage of people who aren’t. Owners neglecting to pay their bills could indicate that they are having problems with the condo and therefore, withholding fees, or it could be an indication of not having enough funds on the association’s part.

Another big question that you should have answered is how much money is available for repairs. Also ask if reserve fund has been reviewed in the past five years. If the building is one to ten years old, the fund should have ten percent of the cost of replaceable items. If the building is between ten and twenty years old, it should have twenty-five to thirty percent available in the repair fund. After twenty years, the amount should equal fifty percent or more. Be wary of condos that have owners who claim to be paying very little in maintenance fees. This could indicate that the building has poor upkeep or that the building is going above its means.

One of the most important questions that should be asked is to see a copy of the certificate of insurance. The replacement costs should be enough to cover the costs of rebuilding and the policy should contain a building-ordinance clause. This will ensure that there will be enough money to make sure the building meets code should rebuilding become necessary. Also make sure that you know what the association will cover and what is the responsibility of the homeowner. The homeowner should get insurance for any contents inside their own unit as well as anything that the association’s insurance does not cover. If you don’t understand all of the insurance language, take the policy to an agent to help you understand what it says.

Buying a condo is different from buying a single-family home in that there are many more complications and things to consider. A homebuyer should obtain a copy of the condo’s by-laws and look it over with a real estate lawyer to ensure that they understand them and that they are in keeping with any state laws. The lawyer can also screen the association at the courthouse to make sure that they have never had a suit filed against them.

A homebuyer should find out what the rental policies are. These should be listed in the by-laws or added as an amendment if the condo consists of ten percent or more rental use. Although the association can change the bylaws regarding renters, this is less likely to happen if there are a lot of owners renting.

Any homebuyer should be wary of condos that are managed by the owners themselves. This could lead to many problems, especially if the owners are not in the local area. If the complex has a management company working for them, they should be looked into as thoroughly as the association is. Asking the owners and people living nearby will give good insight as to what the management company is like. Also find the manager who runs day-to-day operations and speak with them directly.

Jeff- Orlando Real Estate

Effective Selling Incentives

Published at August 19, 2007 in General Real Estate and Orlando Real Estate. 0 Comments

When trying to sell your home in today’s Buyers Market, there are certain incentives that can attract buyers. However, these incentives don’t often include things such as large screen televisions or expensive cars in the driveway. Often homebuyers will assume that these gimmicks have been included in the price of the home and they could actually turn buyers off of your property. Instead, more practical incentives such as the actual cost of the home and the amount of their monthly payments are likely to be much more attractive.  

Incentives can be stated at the very beginning of the home selling process to make it stand out from the rest of the houses on the market or they can be added several months after the property has been listed to help it sell. The incentives could also be brought up during negotiations to help encourage the buyer to buy the home. A seller needs to consider all factors when offering incentives. Both the selling price and the incentives need to be considered to determine if it is worth it to the seller to offer the incentives. 

Price reductions are usually the first incentive that is considered. This is due to the fact that the price will attract everybody. If a buyer is considering the house but is hesitant on making a commitment, dropping the price by even five or ten thousand could make all the difference. Another big incentive the seller can offer to is to pay mortgage points for the buyer. Buyers are always thinking about interest rates and one point is equal to one percent of the mortgage in prepaid interest. Having a lower interest rate or lower monthly payment will also be something that everyone can relate to and can draw in all different kinds of buyers.  

Another key factor that buyers are always considering is the size of the down payment they will need to be making. In fact, it’s one of the aspects of homeownership that most first time buyers have a difficult time with. This is advantageous to buyers due to the fact that they would not need to have such a large portion of funds available at the time of purchase.  

Closing costs is often used as an incentive as buyers aren’t interested in paying additional fees to lawyers and title insurance after they have purchased a home. And these costs aren’t small – they usually add up to approximately two percent and seven percent of the cost. Buyers, especially those having an already difficult time with the down payment, will be very interested in these types of incentives. A very interesting incentive that is sometimes offered is a warranty. The seller will often offer a warranty on the home’s systems such as plumbing and electrical for the first year after the house is sold. This provides a much needed feeling of security for homebuyers. And costing only a few hundred dollars, it’s worth it for the seller to make offer this incentive as well. 

Creative little perks can also be thought of for incentives to selling a home. If the residence is in a condominium complex, the first year’s association fees could be paid. Or if the home comes equipped with a pool, the seller could offer to pay for the upkeep and maintenance for a year. Many of these small details may come up in negotiations as buyers and sellers both think of things that would be useful.

Jeff - Orlando Real Estate

Home Owners: Don’t Fall Victim of Mortgage Payment Shock

Published at June 29, 2007 in General Real Estate. 0 Comments

Many home owners who have had a fixed rate mortgage for the past few years followed by an adjustable rate are falling victim to mortgage payment shock when the adjustable rate kicks in and the mortgage payment suddenly soars. Many others have heard of the high number of recent foreclosures due to these types of loans and are fearing the worst when it comes time for their adjustable rate to start.

To deal with this problem the FTC has recently released a new publication to help consumers avoid foreclosure scams and save their homes. The publication “Mortgage Payments Sending You Realing? Here’s What To Do,” explains the different types of mortgages and proactive actions consumers can take in order to avoid predatory scams.

If you have this type of mortgage I urge you to read the publication. Be proactive and learn the terms of your mortgage you may also want to contact your loan provider to inquire about what options you may have. The earlier you start your research the better off you will be when it comes time for your mortgage to change to an adjustable rate.

If you feel that you are a victim of a fraudulent, deceptive or unfair business practice regarding your mortgage you can file a complaint with the FTC call them at 1-877-382-4351 or visit them online at  http://www.ftc.gov/ftc/complaint.shtm .

Florida Lawmaker move toward slashing property taxes $31.6 billion

Published at June 10, 2007 in General Real Estate and Orlando Real Estate. 0 Comments

After weeks of negotiating between Florida House and Senate leaders the lawmakers agreed this Friday to one of the largest tax cuts in state history. The plan will slash property taxes 31.6 billion dollars over the next five years. The plan could save the the average homeowner $174 in 2007 and a huge savings of $1306 in 2008.

The Florida legislature will be meeting for an 11 day special session starting this week and will review the plan.Gov. Charlie Crist has been on the frontline for property tax reform asking lawmakers to drop property taxes “like a rock.”

Selling your home in a buyers market Part 3 - The Interior

Published at June 2, 2007 in General Real Estate. 0 Comments

There are many ways to spruce up the inside of your home some cost money and some are very cheap to do. In today’s buyers market buyers are looking for a turnkey property. Unless they are getting a great deal on the property most are not looking to buy and remodel. Here are some interior tips on preparing your home to sell in the Orlando real estate market.

Clean your home - This is the cheapest way and one of the most important things you can do for your house. Buyers want to know that a home has been cared for. Your home should be immaculate and inviting when a potential buyer views your home. Make your home shine as if it were a model home, clean like you have never cleaned before. Most buyers want to move right in not spend a week getting the home clean after closing.

Paint - Does your home need to be painted? Painting is an affordable way to spruce up any home. Choose light neutral colors. This will give the home a fresh feeling and make your house look larger at the same time.

Carpets -Are your carpets looking like they need to be cleaned or replaced? Having your carpets professionally cleaned may be all it takes but if they are still look like they have seen their day consider replacing them. Consider a frise style carpet which is very attractive, plush, durable and best of all the latest trend.

Clean up the clutter and get organized - Homes in Orlando are notorious for not having enough storage space. We typically do not have basements, attics and garages can fill up very quickly. Get rid of all your junk, donate it or have a garage sale. Having a garage sale may free up some extra money that can be put towards getting your home in better shape for a pending sale.

Light fixtures - Updating outdated light fixtures can make a remarkable difference in how your house shows.

These are just a few tips on getting your home prepared for buyers. For a more complete list please visit: Preparing your Orlando home for the real estate market section of my website.