Area Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

July 7, 2017

HOW MUCH INSURANCE DO I NEED?

If you have a mortgage on your home, or plan on financing your home with the help of a bank, you will most likely be required to carry homeowners insurance on your home.   In Florida, we are vulnerable to many kinds of tropical disasters, so it’s extremely important to make sure your home is properly insured.   We get asked all the time, how much insurance should I get? We asked Insurance Agent Zane Lefko with The John Galt Insurance Agency to help clarify some insurance misconceptions for consumers.

 

Zane Lefko with The John Galt Insurance Agency says Many consumers are often misinformed regarding insurance, the amount that is needed on their home and the many different things that influence the cost of insurance. Often, when buying a new home, the purchase price comes into the mix as far as how much coverage is required. Something that most people don’t realize is that for homeowners insurance, we do not take into account the value of the land (something that the sales or appraisal price does) which is why your coverage amount might be less than your purchase price or loan amount.”  Buyers, especially first time buyers, often have a difficult time understanding why their insurance limits may be lower than the appraised value of a home.  A quality insurance agent will help a home buyer determine the proper amount of insurance needed to ensure that the home is protected, but not over insured.

 

So what happens after you purchase your insurance policy and move into your new home? Most homeowner insurance policies renew on an annual basis.   Instead of automatically renewing your policy year after year, it’s wise to have your policy needs reviewed by a professional from time to time.  Zane Lefko says “Just because your agent is telling you that your insurance is the best option available, that may not be entirely true. As an independent agent, I have access to all of the available companies in the state. I recommend my clients contact me to shop their insurance every two years to make sure you are still getting the best option.” Questions suggested by some insurance experts include:  Has the company made any changes in coverage since last year?   Does my policy include a separate deductible for risks like hurricane or hail? Should I raise my deductible to save money? Do I need flood, earthquake, or an umbrella policy?

 

Other good times to review your policy are when you make major improvements to your home, make your home safer (alarms, new plumbing or electrical, new roof, etc.) or major lifestyle changes such as divorce or additional people living in your home.   Consumers should also evaluate their insurance coverage when they do any major renovation, upgrades or additions to their home. We spend so much money on our homes to make them nice, new and modern but unless you are updating your agent or insurance company, you may not be covered correctly for these additions or upgrades to your home” says Lefko. Additionally, Lefko says that major improvements could even decrease your insurance premium These upgrades sometimes may even help to lower the cost of your insurance! Hurricane shutters, hurricane impact windows, new doors and so on are all things that may help to lower your insurance premium”.

 

Like most insurance policies, there simply isn’t a “one size fits all” approach to homeowner insurance policies. At Poth & Associates, we suggested that our clients ask their insurance agent for multiple quotes, and ask them to help determine the proper amount of insurance needed to make sure that they are protected, without wasting money.

 

Zane Lefko is a Licensed Insurance Agent at The John Galt Insurance Agency.   Zane has helped several BP Real Estate Team clients with their insurance needs.   Zane can be reached at (954) 283-7496 or at zane@john-galt.com

 

Posted in Insurance
June 2, 2017

CONDO PURCHASES & FIRST RIGHT OF REFUSAL?

I want to buy a condo, but the condominium association is exercising a right of first refusal.  Is this legal?

 

While we cannot provide legal advice, many local law firms assert that the short answer is, Yes, if their governing documents allow it.

 

Many community associations have specific clauses in their governing documents that allow them to do everything from collect assessments to approving future residents in the neighborhood.   While an association cannot prevent a property owner from selling their property, they often have clauses such as a “Right of first refusal” that allow them to determine whether or not a potential buyer can purchase the property.

 

A right of first refusal is a “a right to elect to take specified property at the same price and on the same terms and conditions as those contained in a good faith offer by a third person if the owner manifests a willingness to accept the offer.”   Meaning, if an owner accepts a buyers offer, the association may have the right to purchase the property with the same terms of the buyer’s offer, thus keeping the buyer from purchasing the property.    In some situations, depending on the language of the associations governing documents, the association can find another buyer instead of purchasing the property.

 

Here is a good link to a reputable community association law firm referencing this issue.   http://wwz-law.com/from-our-wz-qa-can-my-association-disapprove-or-reject-a-prospective-buyer-from-purchasing-a-unit-or-lot/

 

Posted in Condominiums
March 4, 2017

WHAT VALUE DO I GET FOR PAYING A 6% COMMISSION?

FSBO. That’s the acronym used for For Sale By Owner, the terms used to describe a home that is being sold by the homeowner without the services of a licensed real estate agent or broker. There are a few reasons homeowners attempt to sell their homes themselves. Sometimes they have a friend, relative or neighbor who successfully sold their own home, they have a relative in another state who is in the real estate business and is willing to give them advice, or they just don’t want (or can afford) to pay the “commission.”

 

I have been in the real estate industry since 2004, and I still hate the word “commission.” I prefer to refer to my compensation as a Professional Service Fee. Many homeowners feel that real estate agents simply put a sign in the yard, post some photos in the multiple listing service, and then let other agents come inconvenience the owners to show the house. I will agree, this type of service warrants a “commission”, not a Professional Service Fee. Often times the “savings” a homeowner thinks they are receiving is not actually savings at all. In fact, in many cases they are losing money.

 

When interviewing real estate agents, here are some things to remember.

 

  1. Buyers are smart bargain hunters. A buyer who is looking at your home knows that you are not paying a Professional Service Fee, and they know that standard industry rate. Most buyers will factor this in when they are making an offer on your house. If you are saving the money, they want to save it too.
  2. It’s simple economics—real estate brokers will get you a higher price. By attempting to sell your home on your own, you are exposing it to a limited pool of buyers. Real estate agents who are members of the local MLS, and state and National Association of Realtors have access or a much larger pool of buyers and network of professionals who are working with buyers ready to buy.
  3. Time. Would you rather be sitting at your open house, or shopping for furniture for your new home? I definitely miss my Saturdays and Sundays being free to enjoy the beach, but it takes a lot of time and commitment to sell a house!
  4. Safety. Do you normally open your door and invite strangers in? Buyers who are working with Realtors are more likely to be serious buyers who are vetted.   As a Realtor, we are held to a strict code of ethics. Your Realtor will “set the rules” for any showings and other real estate professionals must follow them. This means you won’t risk strangers making you uncomfortable in your home, imposing when you aren’t ready, or worse, harming you. Unfortunately, the world is a scary place and we should all take extra precaution to make sure we are protected.
  5. Negotiating. A good real estate professional is a seasoned negotiator. As an expert in the market, we know how to get a seller the highest price possible for their home. It’s what we do every day!
  6. Marketing. A good real estate agent or broker will effectively market your home. Marketing costs money and the cost is generally absorbed by your Realtor.
  7. Enticement. Let’s face it, we all work for money. We may love our jobs, but would we really be able to do them for free? While a professional service fee may be 6–7%, most real estate agents offer half of that fee to other real estate agents or brokers to bring a qualified buyer and acceptable offer. That big check you thought we were skipping down the street just got cut in half. After we deduct the cost of marketing your home, calculate time spent showing your home, negotiating, handling inspections, and guiding the sale to closing, it really is fair compensation.

 

In most cases, a real estate agent or broker will not get paid until you have accepted an offer that is satisfactory to you, and the sale has successfully gone through closing. You know your bottom line, so when you are entertaining offers, keep that in mind.

 

Posted in SELLING
Feb. 1, 2017

I DON'T HAVE 20% DOWN PAYMENT, CAN I STILL BECOME A HOMEOWNER?

Years ago the “norm” was that families would save for a 20% down-payment to buy a home. In 2016 this is no longer the norm, and hasn’t been for some time. There are hundreds of loan programs available to buyers in today’s market, some that offer financing with as little as 3.5% down (or zero down for Veterans!).

 

One of the most common types of mortgages is called an FHA Mortgage. An FHA Mortgage is a mortgage that is insured by the Federal Housing Administration. Buyers who purchase homes with an FHA mortgage pay for mortgage insurance, which protects the lender (Bank) from a loss if the borrower defaults on the loan. FHA mortgages have become increasingly popular because of the lower down payment requirements, often as low as 3.5% or the purchase price, and less stringent lending standards.

 

With an FHA mortgage, approval is conditioned upon the lender verifying that the down payment has come from an “Approved source”. A buyer can acquire the down payment using their own savings, gift from a family member (if approved by the lender), or a grant from state and local government down-payment assistance programs. FHA does specifically insist that a down payment gift cannot be given by the seller, real estate agent or broker, builder, or an associated entity.

 

While the FHA does not allow sellers, real estate agents or brokers, builders, or lenders to pay any portion of the down payment, assistance with closing costs is allowed. The FHA does allow some concessions in closing costs from sellers, agents, brokers, and lenders and this is often discussed during price negotiations.

 

If a home buyer is a Veteran, a VA loan is a good option. Some VA programs offer financing with as little as zero dollars down. As a Realtor with the Military Relocation Professional certification offered by the National Association of Realtors, I can connect Veterans with VA approved lenders who can advise them on the loan options available. It is important to make sure you have all paperwork needed for this financing option.

 

It is important to remember that both the FHA and the VA loans have certain requirements that the property must meet in order to qualify for financing. A good real estate agent will know these requirements and be able to guide a home buyer in the appropriate direction. For more information about FHA loans, visit http://portal.hud.gov/hudportal/HUD?src=/buying/loans. For more information about VA loans, visit http://www.benefits.va.gov/homeloans/ or call us at 727-859-7684.

 

Posted in Buying
Sept. 1, 2016

FHA LOANS...CAN I BUY A CONDO WITH THEM?

The simple answer to this question is:  “Yes, but…”

 

Almost every time I speak with a potential client about FHA (Federal Housing Administration) loans, there seems to be a tremendous amount of misinformation.   In fact, even among real estate professionals, many do not fully understand the process.   Every day I see a condominium being marketed to potential buyers as qualifying for FHA financing when in reality it does not.

 

The FHA loan program has been in place since the 1930’s.  An FHA loan is obtained through a traditional lender or mortgage broker, and it is “insured” by the FHA.  FHA loans have historically been used by first time homebuyers, but these loans are not restricted to just first time homebuyers.  Almost anyone can purchase a home with an FHA loan — if they qualify.

 

Let’s start with the definition of a “condominium” according to the FHA:  A “condominium project” refers to a multi-unit property in which persons hold title to individual units and an undivided interest in “Common Elements.”  Common elements (areas) include underlying land and buildings, driveways, parking areas, elevators, outside hallways, recreation and landscaped areas and other elements described in the condominium declaration.  Common areas are typically managed by a condominium association.

 

While it is possible to purchase a condominium with an FHA loan, it is important to know the FHA rules on condos to save both time and heartache.   The rules for a buyer are quite simple:  In order for a buyer to purchase a condominium with an FHA loan, the condominium association/development must be on the list of approved condominium projects.   The FHA has made it extremely simple for buyers, sellers, and real estate professionals to determine if the condominium is approved by publishing a searchable list here: https://entp.hud.gov/idapp/html/condlook.cfm

 

The process for a condo project to be approved is called the HUD Review and Approval Process (HRAP). Typically, the FHA requires the following before approving a condominium project for FHA financing:

 

-The condominium association must have at least two units. -The association and buildings must have appropriate insurance. -The condominium association/project must meet all state and local requirements and regulations. -Business space in the condominium must not be larger than 25% of the total floor area. -Ownership by investors in the condominium must not exceed 50 percent. (Think rental units) -More than 50% of the units must have been sold prior to FHA approving the first FHA loan. -No more than 15% of the total units can be in arrears on their mandatory condominium assessments and fees. -The property must not be located within a designated coastal barrier (there are interactive maps to find coastal barriers). -Developer “turnover” must have occurred. -Request for approval must be submitted by the builder, developer, condominium association, management company, or designated project consultant or attorney. -Other factors may also impact the FHA decision.

 

As you can imagine from the list above, the approval process can be a daunting one for many condominium associations and the majority of them never apply for FHA approval. Unfortunately, applications for project approval that come directly from borrowers (buyers), homeowners, sellers, or real estate professionals generally are not processed and are simply returned to the submitter, although these can be addressed on a case-by-case basis, according to HUD.

 

So if the condominium you want to purchase is not on the approved list, is the answer a solid NO?  Not really!  There are some lenders out there that are qualified and approved to do what is referred to as a DELRAP.   DELRAP stands for Direct Endorsement Lender Review and Approval Process.  This means that a lender that has received Direct Endorsement (DE) authority and meets the criteria can process an individual loan for a borrower for a condominium that has not yet been approved through FHA and submit the project for FHA approval through the DELRAP process.   Lenders that offer this must meet strict criteria, and many do not offer this. Approval of these loans is never guaranteed, and the DELRAP lender will likely require that the same criteria be met by the condominium association.   Once a unit in a project is approved through the DELRAP process, typically the project is approved and viewable on the FHA search tool for future buyers.

 

If you are considering purchasing a home or condominium with the use of an FHA loan/mortgage, it is important to work with both a real estate professional and lender that have experience with these types of purchases.  Our real estate team is happy to meet with you for a free consultation.

 

Posted in Buying