Is Coastal Living Fit For You?
Just saying the word, "beach," instantly brings to mind a picture of soft sand, crystal blue water, and swaying palm trees. Today, those images are drawing people in increasing numbers to the coast, both for vacation and permanent living.
Nationally, according to the 2000 U.S. Census, 53 percent of all Americans live in coastal counties, and the percentage of the nation's population that lives within 50 miles of the coast continues to grow. One has only to look at the five states with the greatest population increases in the past 10 years ??California, Florida, Georgia, Texas, and Virginia ? and it's no surprise to find out that more than 3,600 residents are moving to a coastal county each day.
According to a 1996 study by the U.S. Department of State, "beaches are the leading tourism destination in the country followed by national parks and historic sites." But what draws people to the coast? People enjoy the moderate weather, cooler in the summer, warmer in the winter, and people enjoy the variety of activities available on the coast. There are plenty of water-based activities like boating, fishing and swimming, as well other outdoor activities such as bird and wildlife watching, hiking, and biking, all with a pretty view.
With all the activities people enjoy while visiting, it's not surprising that many people choose to take a permanent vacation, and move to a coastal community. Coastal communities are especially popular with active adults, empty nesters, and families with older children, who find many options available to suit their lifestyle.
Just east of Orange County, is Brevard County, also known as Florida's Space Coast. Located on 72 miles of pristine Atlantic coastline in East Central Florida, the Brevard County region is famous for its Space Shuttle launches, as well as its manatees, sea turtles, and other marine life. More than 474,000 residents enjoy swimming, biking, surfing, fishing, tennis, boating, golf, inline skating, and just about any other outdoor activity that makes the most of a year-round mild climate of sunshine and blue skies. Brevard County is also home to Port Canaveral, the second busiest cruise port in the world.
Northeast of Central Florida is Volusia County, and home to "The World's Most Famous Beach." Daytona Beach is 23 miles of great white-sand beaches boasting warm waters and abundant marine life. The nearby Halifax River, part of the Intercoastal Waterway, also provides activities such as powerboat cruising, commercial boat tours, and deep-sea fishing charters. A large residential area south of Daytona Beach is the town of Ponce Inlet, famous for jetty fishing, beachcombing and nature watching.
Throughout Brevard and Volusia counties, the biggest housing trend is condominiums. According to the National Association of Realtors (NAR), low interest rates drove condominium sales to record heights during the first three quarters of 2004. The NAR also reported an increase in condo sales of more than 30 percent between 1990 and 2000. One of the main reasons condominium sales have always been strong in coastal communities is the advantage of beachfront living, without the high costs associated with buying beachfront property. Defraying the property cost amongst many units helps make condo living the most affordable way for many people to live seaside. Recently, with the low interest rates available, condos have also become very popular as rental investments and as second homes.
Besides the difference in cost between a condo unit and a single-family home, condo owners are often looking for more lifestyle and less work. For condo owners, lawn maintenance, building maintenance and, in most cases, water, sewer, trash service, pest control and exterior property insurance are included in their monthly fee. In addition to relief from maintenance burdens, most condo residents enjoy amenities including: clubhouses, pools, tennis courts, and fitness centers; and on the coast, many complexes also include boat ramps, fishing piers, crabbing docks and, in some cases, full-service marinas.
Brevard and Volusia coasts are populated with tiny cities, and small communities of condos. To find large master-planned communities head north on Interstate 95 to Palm Coast. In the Palm Coast area, developers have created the latest visions for master-planned living coastal-style. Palm Coast is home to two very large communities, spanning more than 1,000 acres each ? Grand Haven and Ocean Hammock. Both incorporate waterfront living with planned community amenities including golf courses, country clubs, waterfront home sites, and nature preserves.
Single-family homes are not as abundant on the beach, but there are still many options for waterfront living. Various communities in both Volusia and Brevard counties offer homes on the Intercoastal Waterway, which allows for boating access to oceans, rivers and bays along the coast. A small beachside community in Volusia County that manages to maintain its small-town atmosphere is New Smyrna Beach. New Smyrna Beach has many single-family housing options along the shores of the Indian River, as well as the eight-mile stretch of Atlantic coast beach known as the "World's Safest Beach".
No matter where people choose to live on the coast, the weather has a way of showing the vulnerability of living on or near the water. While summer squalls, and winter rains dampen the days, it is the threat of hurricanes that lead the risk category for coastal living. According to statistics from the National Oceanic and Atmospheric Administration's (NOAA) National Hurricane Center, an average of 1.7 hurricanes come ashore along the U.S. East and Gulf Coasts each year. Building codes, laws and insurance programs are constantly being reassessed in Florida, and other coastal states, to handle the risks from coastal winds and water the best ways possible.
For the most part, residents of Florida's coasts enjoy year-round sunshine and recreation. Picture postcard days, warm sunrays, and plenty of ways to enjoy the outdoors are just some of the reasons more people are choosing to live a coastal lifestyle.
By C.J. Higginbotham | Special To The Sentinel
Saturday, November 1, 2008
First time home buyer
First-time homebuyer tax credit repaid slowly if at all
WASHINGTON – Sept. 25, 2008 – If a first-time homebuyer purchases a home before the end of 2008, he or she gets a $7,500 tax credit in 2009 when they file their federal income taxes, but it must be paid back over time.
Here’s how it works: The first-time homebuyer credit is similar to a 15-year interest-free loan to be repaid in 15 equal annual installments beginning with the second tax year after the credit is claimed as an additional tax on the taxpayer’s income tax return for that year. For example, if a buyer claims a $7,500 first-time homebuyer credit on his 2008 return, he’ll start paying it back on his 2010 tax return with $500 due each year from 2010 to 2024.
Some exceptions apply, however, including:
• If the taxpayer dies, remaining annual installments are not due. If a spouse dies, the remaining spouse must repay only his or her half.
• If the home stops being a primary residence, all remaining annual installments become due for taxes paid on the year that happens. There are special rules for involuntary conversions.
• If the home is sold, all remaining annual installments become due on the return for the year of sale. If there is no gain or if there is a loss on the sale, the remaining annual installments may be reduced or even eliminated.
• If ownership is transferred to a spouse or ex-spouse following divorce, the new owner becomes responsible for all subsequent installment payments.
For more information on the tax credit, visit the IRS Web site at: http://www.irs.gov/newsroom/article/0,,id=186831,00.html
WASHINGTON – Sept. 25, 2008 – If a first-time homebuyer purchases a home before the end of 2008, he or she gets a $7,500 tax credit in 2009 when they file their federal income taxes, but it must be paid back over time.
Here’s how it works: The first-time homebuyer credit is similar to a 15-year interest-free loan to be repaid in 15 equal annual installments beginning with the second tax year after the credit is claimed as an additional tax on the taxpayer’s income tax return for that year. For example, if a buyer claims a $7,500 first-time homebuyer credit on his 2008 return, he’ll start paying it back on his 2010 tax return with $500 due each year from 2010 to 2024.
Some exceptions apply, however, including:
• If the taxpayer dies, remaining annual installments are not due. If a spouse dies, the remaining spouse must repay only his or her half.
• If the home stops being a primary residence, all remaining annual installments become due for taxes paid on the year that happens. There are special rules for involuntary conversions.
• If the home is sold, all remaining annual installments become due on the return for the year of sale. If there is no gain or if there is a loss on the sale, the remaining annual installments may be reduced or even eliminated.
• If ownership is transferred to a spouse or ex-spouse following divorce, the new owner becomes responsible for all subsequent installment payments.
For more information on the tax credit, visit the IRS Web site at: http://www.irs.gov/newsroom/article/0,,id=186831,00.html
Daytona Beach, Florida
Footsteps of the Past, Paths to the Future
Enjoy a central location in Daytona Beach Shores, convenient to major centers of commerce, yet retains a strong historical tradition with fascinating remnants of Florida's colorful past just minutes away. The sweep of Florida's history stirs and surprises. The characters are countless and fascinating, from seven-foot native Timucuan Indians to Spanish conquistadors and Elizabethan pirates; from British and Spanish "owners" of Florida to raiding U.S. troops and brave, resistant Seminoles; from Africans who slaved on plantations to those who fought in the Civil War; from rum runners to top-hatted tourists to tycoons obsessed with cars and trains.
Just a sample of nearby historical sites include Tomoka Mounds and Middens, one of the earliest Native American settlements on the Central East Coast; the Bulow Plantation Ruins State Historical Site, founded in 1821; Dummett Sugar Mill, Florida's first steam-powered sugar mill; Sugar Mill Botanical Gardens, which include ruins of an English sugar mill, botanical gardens and statuary; Old Fort Park, with 40 archaeological digs at the site of the ill-fated Turnbull Colony of Minorcans; and Ponce de Leon Inlet Lighthouse, built more than a century ago.
Other noteworthy sites include the Casements, former winter home of John D. Rockefeller; Halifax Historical Museum; Freemanville Historic Site; Mary McLeod Bethune home and gravesite; Howard Thurman Home; the Rosewood Exhibit at Bethune-Cookman College, and much more.
Let the Adventures Begin
If active outdoor living is your idea of paradise, you've come to the right place. First and foremost, of course, is "The World's Most Famous Beach," its sand and blue waters only steps from your home. The county's 47 miles of beaches - some 500 feet at ebb tide - are perfect for basking, beachcombing, and a myriad of lively sports.
Fabulous Fishing
Located in the heart of "The Redfish Capital of the World," Daytona Beach Shores offers some of the most exciting salt and freshwater fishing anywhere. Anglers at Mosquito Lagoon regularly land monsters exceeding 40 pounds or more - and pound for pound, redfish are among the hardest fighting fish in the world.
In addition to redfish, area anglers reel in marlin, sailfish, wahoo, tuna, king mackerel, grouper, red snapper, amberjack and many other magnificent fish. Charter services are plentiful and crews are expert at helping you land the "big one." Surf fishing is also a year-round activity, and species such as pompano, whiting, bluefish, flounder and more thrive in the area. You may even want to try your cast in the annual Greater Daytona Beach Striking Fish Tournament held each May.
Freshwater fishing is superb, with excellent bass fishing on the legendary St. Johns River. Whether veteran or beginner, you'll enjoy sight fishing, fly fishing, live bait, lure fishing and more.
Water Sports and Outdoor Recreation
Why should the fish have the water to themselves? Get in the swim with snorkeling, scuba, surfing, or simply a leisurely lap in the pool. A variety of dive shops with complete equipment can be found. And if boating is your favorite pastime, you'll find all varieties - from sailing, kayaking, canoeing and jetskiing to parasailing.
The area abounds with springs, lakes, rivers and wonderfully diverse state parks and campgrounds. The St. Johns River is one of the most mystically scenic rivers in America, and one of only three that flow south to north. It links magnificent parks with wildlife preserves along the county's western border. DeLeon Springs State Recreation Area offers 600 acres of varied activities: boating, fishing, hiking, picnicking and swimming in the 72-degree spring.
Ecotourists flock to the region, and not only for the flocks of sea and song birds (200 species in all). A river cruise will reveal an exotic realm of indigenous flora and fauna. Resident alligators sun on the banks, and manatees are gentle winter visitors.
Golf, Tennis and More
Back on dry land, the area's 20+ championship golf courses will help you hone your game. Designed by some of the game's greats like Rees Jones, Arthur Hills, Arnold Palmer, Gary Player, Lloyd Clifton and Bill Amick, these beautiful courses are guaranteed to challenge your personal best. The area is also home to the Ladies Professional Golf Association and the LPGA International Golf Course, which hosts national tournaments.
Whether you're a tennis player or tennis spectator, you're in good shape here. Year-round mild weather allows outdoors play, or you can watch world-class amateur tennis. This is the backyard of USA Tennis Florida, which hosts several topnotch tournaments each year.
You can also cheer for fast-paced college basketball and get a jump on the baseball season with spring training at Jackie Robinson Stadium. At its entrance is a life-sized statue of the history-making player.
Family Entertainment (Zoom Zoom!)
All ages will enjoy family-friendly attractions like the Museum of Arts and Sciences Planetarium, the Marine Science Center, Daytona Beach Boardwalk, Daytona Ghost Walk, themed miniature golf courses, even guided tours of Angell & Phelps Chocolate Factory, Daytona Beach's tradition of fine candy-making since 1925.
Feel the need for speed? Daytona Beach Shores was the site of the Measured Mile, where Sir Malcolm Campbell pushed his legendary Bluebird to 276 mph. Visit the racing walk of fame at Max Samuely Park and learn more about the birthplace of speed and its constantly broken records.
Take a lap over to the famous Daytona International Speedway and Daytona USA, the popular interactive motorsports attraction that features simulator rides, a movie, tours of the Speedway, the Bluebird V and more. The Speedway is home to the Daytona 500 but also to racing as diverse as you'll find anywhere: 190 mph NASCAR stock cars, 125 mph go-karts and thrilling 170 mph Superbikes.
Art and Culture
The Daytona Beach area abounds in cultural opportunities that may surprise first-time visitors. The London Symphony presents an annual season, a symbol of the region's love of music and its many excellent venues for the performing arts, including theatre: the Daytona Playhouse, Seaside Music Theatre, Peabody Auditorium, Ormond Beach Performing Arts Center, Ocean Center, Mary McLeod Bethune Foundation and Performing Arts Center, Daytona Beach Bandshell Concert Series, the Daytona Beach Symphony Society and the coming state-of-the-art News Journal Center.
The visual arts are equally well represented by the renowned Atlantic Center for the Arts, Southeast Museum of Photography, Ormond Memorial Art Museum and Gardens, African American and Caribbean American Museum of Art, Art League of Daytona Beach, and the Fred Dana Marsh Museum.
Dining, Shopping and Nightlife
Indulge your taste for the good life with a luscious meal and ocean view.
With an obvious taste for the good life, you surely appreciate the culinary arts - and you'll have no trouble indulging in a luscious meal (with complimentary ocean view). Freshly caught seafood is naturally superb, but don't overlook ethnic specialties, sizzling steaks or the All-American beachside cheeseburger. Popular restaurants include Inlet Harbor Marina Restaurant, Boondocks, Outback Steakhouse, Gators Pizza and more. Not to be missed is Teauila's Hawaii, the exotic dinner theatre that features authentic Polynesian dancers and a spectacular stage show. Teauila's even boasts an active indoor "volcano."
Take a stroll down Main Street Pier where you'll find dining, a gondola skyride, revolving space needle and more. If games of chance appeal to you, try your luck at the SunCruz Casino, a 560-passenger Las Vegas-style gaming ship that offers five-hour day and evening cruises.
All that glitters and more can be found at exciting area shopping venues.
All that glitters, shimmers and feels good can be found at exciting area shopping venues. One unique shopping experience is the Ocean Walk Shoppes at the Village. A four-level shopping, dining and entertainment complex, it offers an ocean view, a 10-screen movie theater, a pedestrian walk-over and some of the best retail stores anywhere.
Enjoy a central location in Daytona Beach Shores, convenient to major centers of commerce, yet retains a strong historical tradition with fascinating remnants of Florida's colorful past just minutes away. The sweep of Florida's history stirs and surprises. The characters are countless and fascinating, from seven-foot native Timucuan Indians to Spanish conquistadors and Elizabethan pirates; from British and Spanish "owners" of Florida to raiding U.S. troops and brave, resistant Seminoles; from Africans who slaved on plantations to those who fought in the Civil War; from rum runners to top-hatted tourists to tycoons obsessed with cars and trains.
Just a sample of nearby historical sites include Tomoka Mounds and Middens, one of the earliest Native American settlements on the Central East Coast; the Bulow Plantation Ruins State Historical Site, founded in 1821; Dummett Sugar Mill, Florida's first steam-powered sugar mill; Sugar Mill Botanical Gardens, which include ruins of an English sugar mill, botanical gardens and statuary; Old Fort Park, with 40 archaeological digs at the site of the ill-fated Turnbull Colony of Minorcans; and Ponce de Leon Inlet Lighthouse, built more than a century ago.
Other noteworthy sites include the Casements, former winter home of John D. Rockefeller; Halifax Historical Museum; Freemanville Historic Site; Mary McLeod Bethune home and gravesite; Howard Thurman Home; the Rosewood Exhibit at Bethune-Cookman College, and much more.
Let the Adventures Begin
If active outdoor living is your idea of paradise, you've come to the right place. First and foremost, of course, is "The World's Most Famous Beach," its sand and blue waters only steps from your home. The county's 47 miles of beaches - some 500 feet at ebb tide - are perfect for basking, beachcombing, and a myriad of lively sports.
Fabulous Fishing
Located in the heart of "The Redfish Capital of the World," Daytona Beach Shores offers some of the most exciting salt and freshwater fishing anywhere. Anglers at Mosquito Lagoon regularly land monsters exceeding 40 pounds or more - and pound for pound, redfish are among the hardest fighting fish in the world.
In addition to redfish, area anglers reel in marlin, sailfish, wahoo, tuna, king mackerel, grouper, red snapper, amberjack and many other magnificent fish. Charter services are plentiful and crews are expert at helping you land the "big one." Surf fishing is also a year-round activity, and species such as pompano, whiting, bluefish, flounder and more thrive in the area. You may even want to try your cast in the annual Greater Daytona Beach Striking Fish Tournament held each May.
Freshwater fishing is superb, with excellent bass fishing on the legendary St. Johns River. Whether veteran or beginner, you'll enjoy sight fishing, fly fishing, live bait, lure fishing and more.
Water Sports and Outdoor Recreation
Why should the fish have the water to themselves? Get in the swim with snorkeling, scuba, surfing, or simply a leisurely lap in the pool. A variety of dive shops with complete equipment can be found. And if boating is your favorite pastime, you'll find all varieties - from sailing, kayaking, canoeing and jetskiing to parasailing.
The area abounds with springs, lakes, rivers and wonderfully diverse state parks and campgrounds. The St. Johns River is one of the most mystically scenic rivers in America, and one of only three that flow south to north. It links magnificent parks with wildlife preserves along the county's western border. DeLeon Springs State Recreation Area offers 600 acres of varied activities: boating, fishing, hiking, picnicking and swimming in the 72-degree spring.
Ecotourists flock to the region, and not only for the flocks of sea and song birds (200 species in all). A river cruise will reveal an exotic realm of indigenous flora and fauna. Resident alligators sun on the banks, and manatees are gentle winter visitors.
Golf, Tennis and More
Back on dry land, the area's 20+ championship golf courses will help you hone your game. Designed by some of the game's greats like Rees Jones, Arthur Hills, Arnold Palmer, Gary Player, Lloyd Clifton and Bill Amick, these beautiful courses are guaranteed to challenge your personal best. The area is also home to the Ladies Professional Golf Association and the LPGA International Golf Course, which hosts national tournaments.
Whether you're a tennis player or tennis spectator, you're in good shape here. Year-round mild weather allows outdoors play, or you can watch world-class amateur tennis. This is the backyard of USA Tennis Florida, which hosts several topnotch tournaments each year.
You can also cheer for fast-paced college basketball and get a jump on the baseball season with spring training at Jackie Robinson Stadium. At its entrance is a life-sized statue of the history-making player.
Family Entertainment (Zoom Zoom!)
All ages will enjoy family-friendly attractions like the Museum of Arts and Sciences Planetarium, the Marine Science Center, Daytona Beach Boardwalk, Daytona Ghost Walk, themed miniature golf courses, even guided tours of Angell & Phelps Chocolate Factory, Daytona Beach's tradition of fine candy-making since 1925.
Feel the need for speed? Daytona Beach Shores was the site of the Measured Mile, where Sir Malcolm Campbell pushed his legendary Bluebird to 276 mph. Visit the racing walk of fame at Max Samuely Park and learn more about the birthplace of speed and its constantly broken records.
Take a lap over to the famous Daytona International Speedway and Daytona USA, the popular interactive motorsports attraction that features simulator rides, a movie, tours of the Speedway, the Bluebird V and more. The Speedway is home to the Daytona 500 but also to racing as diverse as you'll find anywhere: 190 mph NASCAR stock cars, 125 mph go-karts and thrilling 170 mph Superbikes.
Art and Culture
The Daytona Beach area abounds in cultural opportunities that may surprise first-time visitors. The London Symphony presents an annual season, a symbol of the region's love of music and its many excellent venues for the performing arts, including theatre: the Daytona Playhouse, Seaside Music Theatre, Peabody Auditorium, Ormond Beach Performing Arts Center, Ocean Center, Mary McLeod Bethune Foundation and Performing Arts Center, Daytona Beach Bandshell Concert Series, the Daytona Beach Symphony Society and the coming state-of-the-art News Journal Center.
The visual arts are equally well represented by the renowned Atlantic Center for the Arts, Southeast Museum of Photography, Ormond Memorial Art Museum and Gardens, African American and Caribbean American Museum of Art, Art League of Daytona Beach, and the Fred Dana Marsh Museum.
Dining, Shopping and Nightlife
Indulge your taste for the good life with a luscious meal and ocean view.
With an obvious taste for the good life, you surely appreciate the culinary arts - and you'll have no trouble indulging in a luscious meal (with complimentary ocean view). Freshly caught seafood is naturally superb, but don't overlook ethnic specialties, sizzling steaks or the All-American beachside cheeseburger. Popular restaurants include Inlet Harbor Marina Restaurant, Boondocks, Outback Steakhouse, Gators Pizza and more. Not to be missed is Teauila's Hawaii, the exotic dinner theatre that features authentic Polynesian dancers and a spectacular stage show. Teauila's even boasts an active indoor "volcano."
Take a stroll down Main Street Pier where you'll find dining, a gondola skyride, revolving space needle and more. If games of chance appeal to you, try your luck at the SunCruz Casino, a 560-passenger Las Vegas-style gaming ship that offers five-hour day and evening cruises.
All that glitters and more can be found at exciting area shopping venues.
All that glitters, shimmers and feels good can be found at exciting area shopping venues. One unique shopping experience is the Ocean Walk Shoppes at the Village. A four-level shopping, dining and entertainment complex, it offers an ocean view, a 10-screen movie theater, a pedestrian walk-over and some of the best retail stores anywhere.
Checking into condotels
Checking into condo-hotels
Once you’ve hit the big time, there are certain perks you become entitled to enjoy: first-class travel, better bottles of wine, a garage full of expensive cars, and a vacation home. But all too often this last luxury takes the shape of a seasonal ski lodge or beach house, usually a good distance from your primary residence.
Before too long, you realize that you are paying to keep up a place 12 months of the year when you spend a fraction of your time there. Do the math. You’re a smart person. Does that make sense?
What if, instead, you had the opportunity to have a place of your own but one that would make you money when you aren’t using it? Better yet, what if, when you were in residence, you not only enjoyed all the comforts of home but all the comforts of a hotel as well?
If that sounds good to you, you may want to consider buying a property in a condo-hotel. A relatively new concept, condo-hotels, as the term implies, allow buyers to own an apartment unit in a hotel.
As with any condo, buyers share costs for the upkeep of common areas but maintain ownership of their own unit – but with the added advantage of being able to get a maid to change the sheets or room service to send up a trolley full of sandwiches day or night.
Today, across North America there are roughly 350 condo-hotels in existence or in development, according to the National Association of Condo Hotel Owners [NACHO]. New project openings for condo-hotels are set to accelerate over the next year, with 27 opening in the second half of 2006, 37 scheduled for 2007, and 39 slated to open in 2008, according to Lodging Econometrics, a Portsmouth [N.H.] hotel industry research firm. In total, 103 projects with a planned 23,143 condo-hotel units are in the pipeline.
Boomer boom
As with much of the real estate market, the condo-hotel segment has become overheated. Lodging Econometrics expects rising construction costs, an impending economic slowdown, and overheated development to lead to some project cancellations. Others are placing their bets on the 75 million baby boomers-turned-empty nesters who are hitting their financial peaks and looking to retire and downsize.
“As the early 1970s consumer was to the condominium, the baby boomer will be to the condo-hotel,” says NACHO President and Chief Executive Officer Dante Alexander. “A couple of years from now, we are going to wish we had built more.”
If you buy a piece of your favorite vacation accommodation, you can expect to receive all the services and amenities offered by the hotel during your stay. These may include concierge service, valet parking, room service, housekeeping, access to a spa and fitness center, and fine dining. Hotel management will also maintain the property.
When you are not using your unit, you have the option of placing it in a rental program that allows hotel management to book your condo as if it were a regular hotel room. Individual owners typically receive 35 percent to 50 percent of the rental income, which offsets property taxes, homeowners association fees, mortgage debt, and insurance. It’s a good deal for the developers because they can offset much of the cost of development to the condo owners.
With ownership, some restrictions
But there are some catches. For one, even though you may “own” the property, your contract may not allow you to occupy it as often as you like or even when you like. In many cases, you may have to give the hotel as much as 60 days’ notice to reserve your room, and you may have as little as 30 days allotted to you per year to use it. [Hotel residences, like those being offered by the Plaza Hotel in New York, allow owners to use their unit 365 days a year.]
For many buyers, this isn’t a problem. Those interested in condo-hotels are usually looking for a second home, explains Joel Greene, a broker with Miami-based Condo Hotel Center, an Internet broker that sells condo-hotels in the preconstruction stage. “They are in a position to travel more than ever, and owning a second home ensures that they will do this and is even a status symbol to some, like owning a fancy car.”
People who do not like to visit the same place year after year, and those who can only get away from their jobs on short notice, are not good candidates for condo-hotels, says Greene.
Another drawback is that, unlike a real home, you are not allowed to decorate your unit the way you like. While owners are given storage space to keep their personal mementos and family pictures when they are not in residence, they can’t, say, put in a new kitchen or even, in most cases, repaint the bathroom without permission from the hotel or the developer.
Break-even investment
There are two primary reasons for this. First, these are still hotels and need to adhere to certain consistent design standards within the property. Second, to protect consumers, the U.S. Securities & Exchange Commission forbids developers to use return on investment as an incentive to buy a condo-hotel unit. Because consumers can’t sink money into renovating the property, the likelihood of being able to flip it for a high multiple of the original price is reduced.
“Do not buy this if you are looking for good cash flow,” Greene adds. “It’s a vacation home that may happen to be an investment.” However, he admits, “it is designed to break even.”
A third drawback is liability. Once you own a condo-hotel, you essentially become an hotelier of a unit subject to the same threats as the highly cyclical hotel industry, including competition, hurricanes, and terrorism. If your beachfront condo-hotel gets walloped by a hurricane or the hotel goes out of business for any other reason, you can’t just pack your bags and catch the next flight out as you would as a normal hotel guest.
While you may not have complete freedom to design or choose your vacation getaway, what you will get is a hassle-free home with world-class service in a fabulous destination. And the newest condo-hotels – reshaping skylines in Mexico, the Caribbean, and Canada – are more elegant and extraordinary than ever.
“They may not ever take over roadside inns, but [condo-hotels] represent a paradigm shift in modern development,” says NACHO CEO Dante Alexander.
Luxury properties galore
BusinessWeek.com put together a list of some of the condo-hotels and hotel residences that are generating the most buzz, selling the most units, and seeing the fastest appreciation in prices. Most of the featured developments are under construction, while some haven’t even broken ground yet. Others are landmark hotels, such as the Plaza and Gramercy Park hotels, both in Manhattan, which have undergone complete renovations to include residences.
There are colossal micro-cities in Las Vegas, ultra-luxury escapes in Manhattan, and Venice-inspired “canal communities” in the Bahamas and the Dominican Republic.
Once you’ve hit the big time, there are certain perks you become entitled to enjoy: first-class travel, better bottles of wine, a garage full of expensive cars, and a vacation home. But all too often this last luxury takes the shape of a seasonal ski lodge or beach house, usually a good distance from your primary residence.
Before too long, you realize that you are paying to keep up a place 12 months of the year when you spend a fraction of your time there. Do the math. You’re a smart person. Does that make sense?
What if, instead, you had the opportunity to have a place of your own but one that would make you money when you aren’t using it? Better yet, what if, when you were in residence, you not only enjoyed all the comforts of home but all the comforts of a hotel as well?
If that sounds good to you, you may want to consider buying a property in a condo-hotel. A relatively new concept, condo-hotels, as the term implies, allow buyers to own an apartment unit in a hotel.
As with any condo, buyers share costs for the upkeep of common areas but maintain ownership of their own unit – but with the added advantage of being able to get a maid to change the sheets or room service to send up a trolley full of sandwiches day or night.
Today, across North America there are roughly 350 condo-hotels in existence or in development, according to the National Association of Condo Hotel Owners [NACHO]. New project openings for condo-hotels are set to accelerate over the next year, with 27 opening in the second half of 2006, 37 scheduled for 2007, and 39 slated to open in 2008, according to Lodging Econometrics, a Portsmouth [N.H.] hotel industry research firm. In total, 103 projects with a planned 23,143 condo-hotel units are in the pipeline.
Boomer boom
As with much of the real estate market, the condo-hotel segment has become overheated. Lodging Econometrics expects rising construction costs, an impending economic slowdown, and overheated development to lead to some project cancellations. Others are placing their bets on the 75 million baby boomers-turned-empty nesters who are hitting their financial peaks and looking to retire and downsize.
“As the early 1970s consumer was to the condominium, the baby boomer will be to the condo-hotel,” says NACHO President and Chief Executive Officer Dante Alexander. “A couple of years from now, we are going to wish we had built more.”
If you buy a piece of your favorite vacation accommodation, you can expect to receive all the services and amenities offered by the hotel during your stay. These may include concierge service, valet parking, room service, housekeeping, access to a spa and fitness center, and fine dining. Hotel management will also maintain the property.
When you are not using your unit, you have the option of placing it in a rental program that allows hotel management to book your condo as if it were a regular hotel room. Individual owners typically receive 35 percent to 50 percent of the rental income, which offsets property taxes, homeowners association fees, mortgage debt, and insurance. It’s a good deal for the developers because they can offset much of the cost of development to the condo owners.
With ownership, some restrictions
But there are some catches. For one, even though you may “own” the property, your contract may not allow you to occupy it as often as you like or even when you like. In many cases, you may have to give the hotel as much as 60 days’ notice to reserve your room, and you may have as little as 30 days allotted to you per year to use it. [Hotel residences, like those being offered by the Plaza Hotel in New York, allow owners to use their unit 365 days a year.]
For many buyers, this isn’t a problem. Those interested in condo-hotels are usually looking for a second home, explains Joel Greene, a broker with Miami-based Condo Hotel Center, an Internet broker that sells condo-hotels in the preconstruction stage. “They are in a position to travel more than ever, and owning a second home ensures that they will do this and is even a status symbol to some, like owning a fancy car.”
People who do not like to visit the same place year after year, and those who can only get away from their jobs on short notice, are not good candidates for condo-hotels, says Greene.
Another drawback is that, unlike a real home, you are not allowed to decorate your unit the way you like. While owners are given storage space to keep their personal mementos and family pictures when they are not in residence, they can’t, say, put in a new kitchen or even, in most cases, repaint the bathroom without permission from the hotel or the developer.
Break-even investment
There are two primary reasons for this. First, these are still hotels and need to adhere to certain consistent design standards within the property. Second, to protect consumers, the U.S. Securities & Exchange Commission forbids developers to use return on investment as an incentive to buy a condo-hotel unit. Because consumers can’t sink money into renovating the property, the likelihood of being able to flip it for a high multiple of the original price is reduced.
“Do not buy this if you are looking for good cash flow,” Greene adds. “It’s a vacation home that may happen to be an investment.” However, he admits, “it is designed to break even.”
A third drawback is liability. Once you own a condo-hotel, you essentially become an hotelier of a unit subject to the same threats as the highly cyclical hotel industry, including competition, hurricanes, and terrorism. If your beachfront condo-hotel gets walloped by a hurricane or the hotel goes out of business for any other reason, you can’t just pack your bags and catch the next flight out as you would as a normal hotel guest.
While you may not have complete freedom to design or choose your vacation getaway, what you will get is a hassle-free home with world-class service in a fabulous destination. And the newest condo-hotels – reshaping skylines in Mexico, the Caribbean, and Canada – are more elegant and extraordinary than ever.
“They may not ever take over roadside inns, but [condo-hotels] represent a paradigm shift in modern development,” says NACHO CEO Dante Alexander.
Luxury properties galore
BusinessWeek.com put together a list of some of the condo-hotels and hotel residences that are generating the most buzz, selling the most units, and seeing the fastest appreciation in prices. Most of the featured developments are under construction, while some haven’t even broken ground yet. Others are landmark hotels, such as the Plaza and Gramercy Park hotels, both in Manhattan, which have undergone complete renovations to include residences.
There are colossal micro-cities in Las Vegas, ultra-luxury escapes in Manhattan, and Venice-inspired “canal communities” in the Bahamas and the Dominican Republic.
Top 10 reasons its a great time to buy
10 TOP REASONS IT’S A GREAT TIME TO BUY REAL ESTATE!
1. Selection, Selection, Selection. Regardless of the price range a buyer desires, there are plenty of houses from which to choose. Just a few years ago, a buyer was forced to make compromises if they were going to locate the home of their dreams. There are lots of options in this market.
2. No Bidding Wars. In 2005, buyers often lost the house they wanted to the feeding frenzy that existed. Other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. There is no competitive bidding in this buyers market.
3. You can make an offer. A few years ago when you made an offer, the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today, the sell price list vs price ratio is about 95%. A seller will not be insulted if you make them an offer they can’t refuse.
4. Patience is tolerated. In the hot sellers market, everything was rushed. Find a house before other buyers did. Hurry up and make an offer. Today a buyer can take their time. Look at several homes and think about your decision for a few hours or even days.
5. Due diligence is welcomed. In this market a buyer is encouraged to obtain a home inspection, termite inspection and appraisal. In 2005 many buyers waived these contingencies in order to gain an advantage with multiple offers.
6. There are plenty of specs. In the past, buyers had to play games if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines. Today, builders are offering incentives to buyers.
7. Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold ‘as is’. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.
8. Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyers caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It a great time to buy without having to compete with hundreds of prospective landlords.
9. Location, location location. Today’s buyers can find homes closer to work. In the past, buyers flocked to areas great distances from their preferred area to find affordable homes. In this market, reasonably priced homes are within biking or walking distance to schools, beaches and shopping.
10. Real Financing is available. The ‘wink, wink’ zero down, no doc, adjustable, sub-prime loans are all but gone. Fixed rates are back. FHA financing, first time homeowners bond programs, and rates are historically low/affordable. It’s a great time to buy real estate!
1. Selection, Selection, Selection. Regardless of the price range a buyer desires, there are plenty of houses from which to choose. Just a few years ago, a buyer was forced to make compromises if they were going to locate the home of their dreams. There are lots of options in this market.
2. No Bidding Wars. In 2005, buyers often lost the house they wanted to the feeding frenzy that existed. Other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. There is no competitive bidding in this buyers market.
3. You can make an offer. A few years ago when you made an offer, the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today, the sell price list vs price ratio is about 95%. A seller will not be insulted if you make them an offer they can’t refuse.
4. Patience is tolerated. In the hot sellers market, everything was rushed. Find a house before other buyers did. Hurry up and make an offer. Today a buyer can take their time. Look at several homes and think about your decision for a few hours or even days.
5. Due diligence is welcomed. In this market a buyer is encouraged to obtain a home inspection, termite inspection and appraisal. In 2005 many buyers waived these contingencies in order to gain an advantage with multiple offers.
6. There are plenty of specs. In the past, buyers had to play games if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines. Today, builders are offering incentives to buyers.
7. Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold ‘as is’. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.
8. Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyers caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It a great time to buy without having to compete with hundreds of prospective landlords.
9. Location, location location. Today’s buyers can find homes closer to work. In the past, buyers flocked to areas great distances from their preferred area to find affordable homes. In this market, reasonably priced homes are within biking or walking distance to schools, beaches and shopping.
10. Real Financing is available. The ‘wink, wink’ zero down, no doc, adjustable, sub-prime loans are all but gone. Fixed rates are back. FHA financing, first time homeowners bond programs, and rates are historically low/affordable. It’s a great time to buy real estate!
Home buying trends in 2007
Study: Single person, non-child families trend in 2007 Florida home sales
ORLANDO, Fla. – Jan. 8, 2008 – One in three Florida homebuyers is single, with 21 percent of 2007 home purchases made by single women and 12 percent by single men – just one finding from the newly-released Florida version of NAR’s “2007 Profile of Florida Homebuyers and Sellers.” Another highlight: Over two-thirds of Florida buyers (64 percent) had no children younger than 18.
The 2007 Profile of Florida Homebuyers and Sellers describes the characteristics and motivations of recent homebuyers and sellers in Florida to help real estate professionals track the changing demands of consumers in a dynamic market. Here’s a summary of the report’s findings:
Characteristics of homebuyers
• The median age of homebuyers was 43 years old. Among first-time buyers, the median age was 32.
• The 2006 median household income of homebuyers was $67,500 compared to $74,000 among homebuyers nationally.
• Sixty-four percent of homebuyers reported that there were no children under age 18 residing in the home.
• Fifty-nine percent of homebuyers were married couples, 21 percent single females, 12 percent single males, and 6 percent were unmarried couples.
• Eighteen percent of Florida homebuyers reported they were born outside the United States, compared to 9 percent nationally.
• First-time homebuyers accounted for 38 percent of homes purchased in 2007.
• Forty-nine percent of first-time homebuyers were between 25 and 34 years old.
• The median income of first-time homebuyers was $58400 compared to $58,600 among all first-time buyers nationally.
• Sixty-five percent of homebuyers between 18 and 24 purchased a home because of their desire to own a home of their own and establish a household.
• Thirty-eight percent of homebuyers reported using social networking Web sites, such as, MySpace, Facebook, LinkedIn, and Friendster. Among homebuyers aged 18 to 24, 76 percent reported using social networking sites.
Characteristics of homes purchased
• Twenty-seven percent of recent homebuyers purchased newly built homes.
• Fifty-eight percent of homes purchased were detached single-family homes.
• The typical homebuyer purchased a home 14 miles from their previous residence.
• The median price of homes purchased was $230,000 compared to $215,000 in the U.S.
• The typical buyer purchased a home that was 1,700 square feet in size.
• Recent homebuyers plan to live in their home a median of 10 years.
The home search process
• Twenty-five percent of recent buyers reported that their first step in the home-buying process was looking online for properties for sale. Eighteen percent of first-time buyers and 24 percent of repeat buyers reported their first step was to contact a real estate agent.
• Eighty percent of homebuyers used the Internet to search for homes.
• The typical homebuyer searched for a home for a median 8 weeks and saw a median 10 homes.
• Eighty-four percent of homebuyers used a real estate professional during their home search.
• Among homebuyers, the typical Internet searcher was 40 years old and visited a median 10 homes. The typical homebuyer that did not use the Internet to search for homes was 53 years old and saw a median 5 homes.
• Thirty-seven percent of homebuyers first learned about the home they purchased from a real estate professional; 19 percent first learned about the home they purchased through the Internet.
• Seventy-two percent of buyers viewed the Internet as a very useful tool in their home search.
• Real estate agents were viewed as a very useful information source by 67 percent of buyers, and as a somewhat useful information source by an additional 23 percent of buyers searching for a home.
Home buying and real estate professionals
• Seventy-one percent of homebuyers purchased their home through a real estate agent or broker.
• Buyers searched for a median of two weeks on their own before contacting an agent.
• A friend, family member, neighbor or relative referred 52 percent of first-time buyers to their agent.
• Ninety-eight percent of buyers ranked honesty and integrity as a “very important” factor when choosing a real estate professional to assist with a home purchase.
• When asked about their agent’s performance on those qualities considered important, 80 percent reported they were “very satisfied” with the honesty and integrity of their agent.
• Sixty-eight percent of recent buyers will definitely use their agent again, and an additional 19 percent will probably use the agent again or recommend to others.
Financing the home purchase
• Ninety percent of homebuyers financed their home purchase; 98 percent of first-time homebuyers financed the purchase of their home compared to 90 percent of repeat buyers.
• Savings were the chief source of the downpayment for most first-time homebuyers (69 percent).
• Fifty-three percent of repeat buyers used proceeds from the sale of their primary residence toward the downpayment; 46 percent relied on savings for a portion of the downpayment.
• Forty-seven percent of all buyers believe that their home purchase was a better financial investment than stocks, and an additional 30 percent of buyers feel their home purchase was at least as good an investment as stocks.
Home sellers and their selling experience
• The median age of home sellers was 48 years; they had a median income of $83900.
• Sixty-nine percent of home sellers were married and 61 percent had no children under 18 years old living at home.
• Fifty-one percent of home sellers traded up to a larger home when purchasing their next home.
• The typical home seller owned their home for 6 years.
• Fifty-three percent of recent home sellers reported that they undertook home improvement or remodeling projects within three months prior to putting their home on the market.
• The typical home was on the market for 10 weeks. 33 percent of home sellers did not reduce their asking price before their home sold.
• Recent sellers typically sold their homes for 96 percent of the listing price.
• Seventy-nine percent of sellers used an agent or broker to sell their home.
• Sixty-seven percent of all sellers were very satisfied with the selling process.
Home sellers and real estate professionals
• Fifty-nine percent of sellers contacted only one agent before selecting one to help assist in the sale of their home.
• When selecting a real estate professional, 36 percent of sellers received a recommendation from a friend, neighbor or relative.
• The reputation of the agent was the most important factor when choosing a real estate professional for 39 percent of recent sellers.
• Twenty-six percent of sellers used the same agent for their home purchase.
• For 37 percent of sellers, their most important expectation is that the real estate agent will help sell the home within a specific timeframe.
• Eighty-six percent of sellers reported that their home was listed or advertised on the Internet.
• Eighty-two percent of sellers used an agent that provided a broad range of services and managed most aspects of the sales transaction.
• Sixty-two percent of sellers reported they would definitely use the same real estate agent again.
For sale by owner (FSBO)
• Seventeen percent of sellers sold their home without the assistance of an agent compared with 12 percent of sellers nationally. Among all sellers, 3 percent were FSBO sellers who knew the buyer.
• Eighty percent of FSBO sellers sold a detached single-family home.
• For 19 percent of FSBO sellers, the most difficult task in selling their home was understanding and performing the necessary paperwork to complete the transaction, for 3 percent it was preparing the home for sale, and for 12 percent the most difficult task was getting the price right.
To download the complete report in PDF format, go to floridarealtors.org at: http://www.floridarealtors.org/LegislativeCenter/Research/index.cfm
© 2008 FLORIDA ASSOCIATION OF REALTORS®
ORLANDO, Fla. – Jan. 8, 2008 – One in three Florida homebuyers is single, with 21 percent of 2007 home purchases made by single women and 12 percent by single men – just one finding from the newly-released Florida version of NAR’s “2007 Profile of Florida Homebuyers and Sellers.” Another highlight: Over two-thirds of Florida buyers (64 percent) had no children younger than 18.
The 2007 Profile of Florida Homebuyers and Sellers describes the characteristics and motivations of recent homebuyers and sellers in Florida to help real estate professionals track the changing demands of consumers in a dynamic market. Here’s a summary of the report’s findings:
Characteristics of homebuyers
• The median age of homebuyers was 43 years old. Among first-time buyers, the median age was 32.
• The 2006 median household income of homebuyers was $67,500 compared to $74,000 among homebuyers nationally.
• Sixty-four percent of homebuyers reported that there were no children under age 18 residing in the home.
• Fifty-nine percent of homebuyers were married couples, 21 percent single females, 12 percent single males, and 6 percent were unmarried couples.
• Eighteen percent of Florida homebuyers reported they were born outside the United States, compared to 9 percent nationally.
• First-time homebuyers accounted for 38 percent of homes purchased in 2007.
• Forty-nine percent of first-time homebuyers were between 25 and 34 years old.
• The median income of first-time homebuyers was $58400 compared to $58,600 among all first-time buyers nationally.
• Sixty-five percent of homebuyers between 18 and 24 purchased a home because of their desire to own a home of their own and establish a household.
• Thirty-eight percent of homebuyers reported using social networking Web sites, such as, MySpace, Facebook, LinkedIn, and Friendster. Among homebuyers aged 18 to 24, 76 percent reported using social networking sites.
Characteristics of homes purchased
• Twenty-seven percent of recent homebuyers purchased newly built homes.
• Fifty-eight percent of homes purchased were detached single-family homes.
• The typical homebuyer purchased a home 14 miles from their previous residence.
• The median price of homes purchased was $230,000 compared to $215,000 in the U.S.
• The typical buyer purchased a home that was 1,700 square feet in size.
• Recent homebuyers plan to live in their home a median of 10 years.
The home search process
• Twenty-five percent of recent buyers reported that their first step in the home-buying process was looking online for properties for sale. Eighteen percent of first-time buyers and 24 percent of repeat buyers reported their first step was to contact a real estate agent.
• Eighty percent of homebuyers used the Internet to search for homes.
• The typical homebuyer searched for a home for a median 8 weeks and saw a median 10 homes.
• Eighty-four percent of homebuyers used a real estate professional during their home search.
• Among homebuyers, the typical Internet searcher was 40 years old and visited a median 10 homes. The typical homebuyer that did not use the Internet to search for homes was 53 years old and saw a median 5 homes.
• Thirty-seven percent of homebuyers first learned about the home they purchased from a real estate professional; 19 percent first learned about the home they purchased through the Internet.
• Seventy-two percent of buyers viewed the Internet as a very useful tool in their home search.
• Real estate agents were viewed as a very useful information source by 67 percent of buyers, and as a somewhat useful information source by an additional 23 percent of buyers searching for a home.
Home buying and real estate professionals
• Seventy-one percent of homebuyers purchased their home through a real estate agent or broker.
• Buyers searched for a median of two weeks on their own before contacting an agent.
• A friend, family member, neighbor or relative referred 52 percent of first-time buyers to their agent.
• Ninety-eight percent of buyers ranked honesty and integrity as a “very important” factor when choosing a real estate professional to assist with a home purchase.
• When asked about their agent’s performance on those qualities considered important, 80 percent reported they were “very satisfied” with the honesty and integrity of their agent.
• Sixty-eight percent of recent buyers will definitely use their agent again, and an additional 19 percent will probably use the agent again or recommend to others.
Financing the home purchase
• Ninety percent of homebuyers financed their home purchase; 98 percent of first-time homebuyers financed the purchase of their home compared to 90 percent of repeat buyers.
• Savings were the chief source of the downpayment for most first-time homebuyers (69 percent).
• Fifty-three percent of repeat buyers used proceeds from the sale of their primary residence toward the downpayment; 46 percent relied on savings for a portion of the downpayment.
• Forty-seven percent of all buyers believe that their home purchase was a better financial investment than stocks, and an additional 30 percent of buyers feel their home purchase was at least as good an investment as stocks.
Home sellers and their selling experience
• The median age of home sellers was 48 years; they had a median income of $83900.
• Sixty-nine percent of home sellers were married and 61 percent had no children under 18 years old living at home.
• Fifty-one percent of home sellers traded up to a larger home when purchasing their next home.
• The typical home seller owned their home for 6 years.
• Fifty-three percent of recent home sellers reported that they undertook home improvement or remodeling projects within three months prior to putting their home on the market.
• The typical home was on the market for 10 weeks. 33 percent of home sellers did not reduce their asking price before their home sold.
• Recent sellers typically sold their homes for 96 percent of the listing price.
• Seventy-nine percent of sellers used an agent or broker to sell their home.
• Sixty-seven percent of all sellers were very satisfied with the selling process.
Home sellers and real estate professionals
• Fifty-nine percent of sellers contacted only one agent before selecting one to help assist in the sale of their home.
• When selecting a real estate professional, 36 percent of sellers received a recommendation from a friend, neighbor or relative.
• The reputation of the agent was the most important factor when choosing a real estate professional for 39 percent of recent sellers.
• Twenty-six percent of sellers used the same agent for their home purchase.
• For 37 percent of sellers, their most important expectation is that the real estate agent will help sell the home within a specific timeframe.
• Eighty-six percent of sellers reported that their home was listed or advertised on the Internet.
• Eighty-two percent of sellers used an agent that provided a broad range of services and managed most aspects of the sales transaction.
• Sixty-two percent of sellers reported they would definitely use the same real estate agent again.
For sale by owner (FSBO)
• Seventeen percent of sellers sold their home without the assistance of an agent compared with 12 percent of sellers nationally. Among all sellers, 3 percent were FSBO sellers who knew the buyer.
• Eighty percent of FSBO sellers sold a detached single-family home.
• For 19 percent of FSBO sellers, the most difficult task in selling their home was understanding and performing the necessary paperwork to complete the transaction, for 3 percent it was preparing the home for sale, and for 12 percent the most difficult task was getting the price right.
To download the complete report in PDF format, go to floridarealtors.org at: http://www.floridarealtors.org/LegislativeCenter/Research/index.cfm
© 2008 FLORIDA ASSOCIATION OF REALTORS®
NAR: Pending Home sales
NAR: Pending home sales surged 7.4% in August
WASHINGTON – Oct. 8, 2008 – Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates, according to the National Association of Realtors® (NAR).
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in August, jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4.
Lawrence Yun, NAR chief economist, said home buyers were responding to improved affordability.
“What we’re seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island and the Washington, D.C., region,” Yun says. “It’s unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we’re hopeful most of the increase will translate into closed existing-home sales.”
The PHSI in the West surged 18.4 percent to 109.5 in August and remains 37.8 percent above a year ago. In the Northeast the index jumped 8.4 percent to 79.8 and is 2.0 percent higher than August 2007. The index in the Midwest rose 3.6 percent to 84.5 in August and is 6.6 percent above a year ago. In the South, the index increased 2.3 percent to 96.0 but is 2.1 percent below August 2007.
Yun notes the unusual timing of contract activity in August. “Home buyers in July were hampered by overly stringent lending criteria in the months before the government takeover of Fannie and Freddie,” he says. “August shows some unleashing of pent-up demand before the credit crisis accelerated in September.”
He cautioned that the sampling size for pending home sales is smaller than the track on existing-home sales, so there is more volatility in the forward-looking series. “We need to see just how much of this gain holds up,” Yun says.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., says despite all the turmoil in world financial markets, home mortgages are available. “Mortgages have been harder to find, and availability and terms vary depending on credit score and location, but Realtors can help buyers find reputable lenders while helping them navigate the transaction process,” he says. “The recently enacted economic stimulus package should help housing by gradually freeing the flow of credit.”
Yun now expects growth in the U.S. gross domestic product (GDP) to contract for two consecutive quarters, in the fourth quarter of this year and the first quarter of 2009, before expanding in latter part of 2009 as the housing market begins a steady improvement.
Looking at middle-ground assumptions, existing-home sales are forecast at 5.04 million this year and 5.41 million in 2009. Following national declines of 5 to 8 percent in 2008, home prices are projected to increase 2 to 3 percent next year.
New-home sales should total around 503,000 this year and 471,000 in 2009. Housing starts, including multifamily units, are likely to fall 28.2 percent to 973,000 units this year, and come in around 843,000 in 2009 as builders continue to clear the accumulation in inventory.
The 30-year fixed-rate mortgage will probably average 6.1 percent in the fourth quarter and rise gradually to 6.6 percent by the end of 2009. NAR’s housing affordability index is expected to average 18 percentage points higher this year than in 2007.
The unemployment rate is projected to average 6.4 percent in the fourth quarter and then average 6.6 percent in 2009. Inflation, as measured by the Consumer Price Index, is estimated at 4.0 percent for 2008 and 2.0 percent next year. Inflation-adjusted disposable personal income is forecast to grow 1.7 percent this year and 1.0 percent in 2009.
© 2008 FLORIDA ASSOCIATION OF REALTORS®
WASHINGTON – Oct. 8, 2008 – Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates, according to the National Association of Realtors® (NAR).
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in August, jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4.
Lawrence Yun, NAR chief economist, said home buyers were responding to improved affordability.
“What we’re seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island and the Washington, D.C., region,” Yun says. “It’s unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we’re hopeful most of the increase will translate into closed existing-home sales.”
The PHSI in the West surged 18.4 percent to 109.5 in August and remains 37.8 percent above a year ago. In the Northeast the index jumped 8.4 percent to 79.8 and is 2.0 percent higher than August 2007. The index in the Midwest rose 3.6 percent to 84.5 in August and is 6.6 percent above a year ago. In the South, the index increased 2.3 percent to 96.0 but is 2.1 percent below August 2007.
Yun notes the unusual timing of contract activity in August. “Home buyers in July were hampered by overly stringent lending criteria in the months before the government takeover of Fannie and Freddie,” he says. “August shows some unleashing of pent-up demand before the credit crisis accelerated in September.”
He cautioned that the sampling size for pending home sales is smaller than the track on existing-home sales, so there is more volatility in the forward-looking series. “We need to see just how much of this gain holds up,” Yun says.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., says despite all the turmoil in world financial markets, home mortgages are available. “Mortgages have been harder to find, and availability and terms vary depending on credit score and location, but Realtors can help buyers find reputable lenders while helping them navigate the transaction process,” he says. “The recently enacted economic stimulus package should help housing by gradually freeing the flow of credit.”
Yun now expects growth in the U.S. gross domestic product (GDP) to contract for two consecutive quarters, in the fourth quarter of this year and the first quarter of 2009, before expanding in latter part of 2009 as the housing market begins a steady improvement.
Looking at middle-ground assumptions, existing-home sales are forecast at 5.04 million this year and 5.41 million in 2009. Following national declines of 5 to 8 percent in 2008, home prices are projected to increase 2 to 3 percent next year.
New-home sales should total around 503,000 this year and 471,000 in 2009. Housing starts, including multifamily units, are likely to fall 28.2 percent to 973,000 units this year, and come in around 843,000 in 2009 as builders continue to clear the accumulation in inventory.
The 30-year fixed-rate mortgage will probably average 6.1 percent in the fourth quarter and rise gradually to 6.6 percent by the end of 2009. NAR’s housing affordability index is expected to average 18 percentage points higher this year than in 2007.
The unemployment rate is projected to average 6.4 percent in the fourth quarter and then average 6.6 percent in 2009. Inflation, as measured by the Consumer Price Index, is estimated at 4.0 percent for 2008 and 2.0 percent next year. Inflation-adjusted disposable personal income is forecast to grow 1.7 percent this year and 1.0 percent in 2009.
© 2008 FLORIDA ASSOCIATION OF REALTORS®
Home Sales see biggest gain
Home sales see biggest gain since July 2003
By Patrick Rucker
WASHINGTON (Reuters) - Sales of previously owned U.S. homes rose 5.5 percent last month, the biggest gain since July 2003, and the inventory of unsold homes fell, a hopeful sign for a housing market mired in a long slump.
The National Association of Realtors said on Friday that sales of existing homes rose to a 5.18 million-unit annual rate from the 4.91 million unit pace set in August. Economists had expected sales to rise to only a 4.93 million unit rate.
It was the first time the sales pace had risen above its year ago level in nearly three years, a sign the market could be stabilizing.
The surprisingly large jump in sales pushed the inventory of unsold homes down by 1.6 percent to 4.27 million, or a 9.9 months' supply at the current pace, the lowest since February.
"We're not out of the woods yet by any means when it comes to falling house prices and our fundamental problem of an oversupply of homes, but we're getting near to the bottom every day," said White House spokeswoman Dana Perino.
Home prices, however, showed no signs of escaping their long, deep slide and economists said the number of homes on the market would likely have to fall further before they do.
The median national home price declined 9 percent from a year ago to $191,600, the lowest level since April 2004.
"As the median price continues to decline, seeking out that new equilibrium level, demand is -- slowly and hesitantly -- moving back into the market," said Lindsey Piegza, an economic analyst at FTN Financial in New York.
A Reuters poll taken October 21-24 found economists expect prices to continue to fall through next year. The median forecast from the survey was for a 15 percent drop this year and a 6.4 percent fall in 2009. Economists expect prices to turn up in 2010, but by a meager 1 percent.
'VULTURE INVESTORS'
Rising U.S. mortgage defaults have sent credit markets into a tailspin, threatening economies worldwide. A majority of economists polled said finding a floor for house prices is an essential condition for ending the financial crisis.
In order for prices to recover, the glut of unsold homes needs to be whittled down further, analysts said.
"Most, if not all, the rise in sales is due to vulture investors buying cheap foreclosed homes, but all sales reduce inventory," said Ian Shepherdson, the chief U.S. economist at High Frequency Economics in Valhalla, New York.
"If this continues, people will stop expecting further price falls and activity will start to recover."
Lawrence Yun, the chief economist for the Realtors' trade group, also pointed to a rise in foreclosure and other 'distress' sales in regions hard-hit by the housing downturn. Continued...
In some regions, the lower prices are seeing buyers return to the marketplace," he said. "This was a nice jump and hopefully this trend can continue because the first step to stabilizing the market is an increase in home sales."
Sales jumped 16.8 percent in the West, while rising 4.4 percent in the Midwest and 2.2 percent in the South. In the Northeast, sales fell 1.2 percent.
Sales of single-family homes, which represent the lion's share of the market, rose 6.2 percent. Sales of condominiums held steady.
"We're still struggling with falling home prices and we will for a while, but we're forming a bottom here," said Bob Walters, chief economist at Quicken Loans in Livonia, Michigan.
(Additional reporting by Pedro Nicolaci da DaCosta, Ellen Freilich and Nick Olivari in New York; Polling by Bangalore polling unit; Editing by Andrea Ricci)
By Patrick Rucker
WASHINGTON (Reuters) - Sales of previously owned U.S. homes rose 5.5 percent last month, the biggest gain since July 2003, and the inventory of unsold homes fell, a hopeful sign for a housing market mired in a long slump.
The National Association of Realtors said on Friday that sales of existing homes rose to a 5.18 million-unit annual rate from the 4.91 million unit pace set in August. Economists had expected sales to rise to only a 4.93 million unit rate.
It was the first time the sales pace had risen above its year ago level in nearly three years, a sign the market could be stabilizing.
The surprisingly large jump in sales pushed the inventory of unsold homes down by 1.6 percent to 4.27 million, or a 9.9 months' supply at the current pace, the lowest since February.
"We're not out of the woods yet by any means when it comes to falling house prices and our fundamental problem of an oversupply of homes, but we're getting near to the bottom every day," said White House spokeswoman Dana Perino.
Home prices, however, showed no signs of escaping their long, deep slide and economists said the number of homes on the market would likely have to fall further before they do.
The median national home price declined 9 percent from a year ago to $191,600, the lowest level since April 2004.
"As the median price continues to decline, seeking out that new equilibrium level, demand is -- slowly and hesitantly -- moving back into the market," said Lindsey Piegza, an economic analyst at FTN Financial in New York.
A Reuters poll taken October 21-24 found economists expect prices to continue to fall through next year. The median forecast from the survey was for a 15 percent drop this year and a 6.4 percent fall in 2009. Economists expect prices to turn up in 2010, but by a meager 1 percent.
'VULTURE INVESTORS'
Rising U.S. mortgage defaults have sent credit markets into a tailspin, threatening economies worldwide. A majority of economists polled said finding a floor for house prices is an essential condition for ending the financial crisis.
In order for prices to recover, the glut of unsold homes needs to be whittled down further, analysts said.
"Most, if not all, the rise in sales is due to vulture investors buying cheap foreclosed homes, but all sales reduce inventory," said Ian Shepherdson, the chief U.S. economist at High Frequency Economics in Valhalla, New York.
"If this continues, people will stop expecting further price falls and activity will start to recover."
Lawrence Yun, the chief economist for the Realtors' trade group, also pointed to a rise in foreclosure and other 'distress' sales in regions hard-hit by the housing downturn. Continued...
In some regions, the lower prices are seeing buyers return to the marketplace," he said. "This was a nice jump and hopefully this trend can continue because the first step to stabilizing the market is an increase in home sales."
Sales jumped 16.8 percent in the West, while rising 4.4 percent in the Midwest and 2.2 percent in the South. In the Northeast, sales fell 1.2 percent.
Sales of single-family homes, which represent the lion's share of the market, rose 6.2 percent. Sales of condominiums held steady.
"We're still struggling with falling home prices and we will for a while, but we're forming a bottom here," said Bob Walters, chief economist at Quicken Loans in Livonia, Michigan.
(Additional reporting by Pedro Nicolaci da DaCosta, Ellen Freilich and Nick Olivari in New York; Polling by Bangalore polling unit; Editing by Andrea Ricci)
Florida Home Sales Rise
Florida’s existing home, condo sales increase in September 2008
ORLANDO, Fla., Oct. 24, 2008 – For the first time in almost three years, Florida’s existing home sales rose in September, noting a 24 percent increase in activity in the year-to-year comparison; last month’s sales of existing condos statewide increased 11 percent in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR).
A total of 10,817 existing homes sold statewide last month, up 24 percent over the 8,725 homes sold in September 2007, according to FAR. The last time Florida Realtors reported higher statewide existing single-family home sales was for year-end 2005, FAR records found. In July of this year, six more homes sold statewide than in July 2007, but that increase was statistically insignificant.
Fourteen of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in September; nine MSAs also showed gains in condo sales, marking the third month in a row that a number of markets have noted higher sales activity.
“The September sales report from the Florida Association of Realtors shows a 24 percent increase in the sales of existing homes in the state; this represents the sixth month in a row that the sales figure has exceeded its 12-month moving average (average of the previous 12 months),” says Dr. Sean Snaith, economist and director of the University of Central Florida Institute for Economic Competitiveness. “This is a clear sign that the significant price declines that have occurred across the state are leading to a more rapid absorption of the housing inventory.”
Snaith noted that September 2007 was a volatile time for the housing industry. “The large percentage increase of sales this September versus September 2007 is inflated by the sharp decline in sales that took place in September 2007,” he explained. “That was the month following the initial wave of global fallout precipitated by the subprime mortgage meltdown that roiled markets in August 2007.”
Florida’s median sales price for existing homes last month was $175,100; a year ago, it was $224,700 for a 22 percent decrease. But, looking back to September 2003, the statewide median sales price for single-family homes was $158,800 – an increase of 10.3 percent over the five-year-period, according to FAR records. 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 August 2008 was $201,900, down 9.7 percent from a year earlier, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $350,140 in August; in Massachusetts, it was $325,000; in Maryland, it was $295,283; and in New York, it was $225,000.
The latest housing outlook from NAR points out the importance of available credit to the mortgage market. “Home sales will be constrained without a freer flow of credit into the mortgage market,” says NAR Chief Economist Lawrence Yun. “The faster that happens, the sooner we’ll see a broad stabilization in home prices that in turn will help the economy recover.”
In Florida’s year-to-year comparison for condos, 2,878 units sold statewide compared to 2,595 sold in September 2007 for an 11 percent increase. The statewide existing condo median sales price last month was $153,800; in September 2007 it was $197,000 for a 22 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $212,600 in August 2008.
Last month, interest rates for a 30-year fixed-rate mortgage averaged 6.04 percent, down from the average rate of 6.38 percent in September 2007, 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 large to medium-size markets, the Daytona Beach MSA reported a total of 536 homes sold in September compared to 478 homes a year ago for a 12 percent increase. The existing home median sales price was $160,000; a year ago, it was $193,200 for a 17 percent decrease. In the year-to-year comparison for the existing condo market, a total of 74 units sold in the MSA last month, up 1 percent compared to 73 condos sold the previous September. The market’s existing condo median price was $237,500; a year ago, it was $277,100 for a 14 percent decrease.
© 2008 FLORIDA ASSOCIATION OF REALTORS
ORLANDO, Fla., Oct. 24, 2008 – For the first time in almost three years, Florida’s existing home sales rose in September, noting a 24 percent increase in activity in the year-to-year comparison; last month’s sales of existing condos statewide increased 11 percent in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR).
A total of 10,817 existing homes sold statewide last month, up 24 percent over the 8,725 homes sold in September 2007, according to FAR. The last time Florida Realtors reported higher statewide existing single-family home sales was for year-end 2005, FAR records found. In July of this year, six more homes sold statewide than in July 2007, but that increase was statistically insignificant.
Fourteen of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in September; nine MSAs also showed gains in condo sales, marking the third month in a row that a number of markets have noted higher sales activity.
“The September sales report from the Florida Association of Realtors shows a 24 percent increase in the sales of existing homes in the state; this represents the sixth month in a row that the sales figure has exceeded its 12-month moving average (average of the previous 12 months),” says Dr. Sean Snaith, economist and director of the University of Central Florida Institute for Economic Competitiveness. “This is a clear sign that the significant price declines that have occurred across the state are leading to a more rapid absorption of the housing inventory.”
Snaith noted that September 2007 was a volatile time for the housing industry. “The large percentage increase of sales this September versus September 2007 is inflated by the sharp decline in sales that took place in September 2007,” he explained. “That was the month following the initial wave of global fallout precipitated by the subprime mortgage meltdown that roiled markets in August 2007.”
Florida’s median sales price for existing homes last month was $175,100; a year ago, it was $224,700 for a 22 percent decrease. But, looking back to September 2003, the statewide median sales price for single-family homes was $158,800 – an increase of 10.3 percent over the five-year-period, according to FAR records. 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 August 2008 was $201,900, down 9.7 percent from a year earlier, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $350,140 in August; in Massachusetts, it was $325,000; in Maryland, it was $295,283; and in New York, it was $225,000.
The latest housing outlook from NAR points out the importance of available credit to the mortgage market. “Home sales will be constrained without a freer flow of credit into the mortgage market,” says NAR Chief Economist Lawrence Yun. “The faster that happens, the sooner we’ll see a broad stabilization in home prices that in turn will help the economy recover.”
In Florida’s year-to-year comparison for condos, 2,878 units sold statewide compared to 2,595 sold in September 2007 for an 11 percent increase. The statewide existing condo median sales price last month was $153,800; in September 2007 it was $197,000 for a 22 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $212,600 in August 2008.
Last month, interest rates for a 30-year fixed-rate mortgage averaged 6.04 percent, down from the average rate of 6.38 percent in September 2007, 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 large to medium-size markets, the Daytona Beach MSA reported a total of 536 homes sold in September compared to 478 homes a year ago for a 12 percent increase. The existing home median sales price was $160,000; a year ago, it was $193,200 for a 17 percent decrease. In the year-to-year comparison for the existing condo market, a total of 74 units sold in the MSA last month, up 1 percent compared to 73 condos sold the previous September. The market’s existing condo median price was $237,500; a year ago, it was $277,100 for a 14 percent decrease.
© 2008 FLORIDA ASSOCIATION OF REALTORS
Existing Home Sales Rise
Existing-Home Sales Rise on Improved Affordability
WASHINGTON, October 24, 2008
Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate¹ of 5.18 million units in September from a level of 4.91 million in August, and are 1.4 percent higher than the 5.11 million-unit pace in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. “The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island,” he said. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said low home prices and low interest rates have been attracting buyers. “This is the first time since November 2005 that home sales have been above year-ago levels,” he said. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.
Yun said there may be market disruptions. “The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac. Inventory remains high, and price declines are pressuring owners,” he said. “Additional housing stimulus would stabilize prices more quickly, which in turn would bring faster stability to Wall Street. Removing the repayment feature on the first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory.”
Total housing inventory at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply² at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.
The national median existing-home price3 for all housing types was $191,600 in September, down 9.0 percent from a year ago when the median was $210,500. “Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions. These are pulling the median price down because many are being sold at discounted prices,” Yun explained. “The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”
Single-family home sales increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.
Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price4 was $199,400 in September, down 10.2 percent from a year ago.
Regionally, existing-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. The median price in the West was $253,600, down 18.5 percent from a year ago.
In the Midwest, existing-home sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. The median price in the Midwest was $152,500, which is 7.9 percent lower than September 2007.
Existing-home sales in the South rose 2.2 percent in September to a pace of 1.90 million but remain 7.8 percent below September 2007. The median price in the South was $167,200, down 4.1 percent from a year ago.
In the Northeast, existing-home sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. The median price in the Northeast was $246,800, down 5.4 percent from September 2007.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
# # #
NOTE: References to performance in states or metro areas are from unpublished raw data used to analyze regional trends; please contact your local association of Realtors® for more information.
¹The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
²Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases.
³The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
4Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for October will be released November 24, and the next Pending Home Sales Index & Forecast is scheduled for release at 11:30 a.m. EST November 7 at NAR’s annual convention in Orlando, Fla. For more information visit: www.realtor.org/research/research/ehsdata
WASHINGTON, October 24, 2008
Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate¹ of 5.18 million units in September from a level of 4.91 million in August, and are 1.4 percent higher than the 5.11 million-unit pace in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. “The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island,” he said. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said low home prices and low interest rates have been attracting buyers. “This is the first time since November 2005 that home sales have been above year-ago levels,” he said. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.
Yun said there may be market disruptions. “The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac. Inventory remains high, and price declines are pressuring owners,” he said. “Additional housing stimulus would stabilize prices more quickly, which in turn would bring faster stability to Wall Street. Removing the repayment feature on the first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory.”
Total housing inventory at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply² at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.
The national median existing-home price3 for all housing types was $191,600 in September, down 9.0 percent from a year ago when the median was $210,500. “Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions. These are pulling the median price down because many are being sold at discounted prices,” Yun explained. “The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”
Single-family home sales increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.
Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price4 was $199,400 in September, down 10.2 percent from a year ago.
Regionally, existing-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. The median price in the West was $253,600, down 18.5 percent from a year ago.
In the Midwest, existing-home sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. The median price in the Midwest was $152,500, which is 7.9 percent lower than September 2007.
Existing-home sales in the South rose 2.2 percent in September to a pace of 1.90 million but remain 7.8 percent below September 2007. The median price in the South was $167,200, down 4.1 percent from a year ago.
In the Northeast, existing-home sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. The median price in the Northeast was $246,800, down 5.4 percent from September 2007.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
# # #
NOTE: References to performance in states or metro areas are from unpublished raw data used to analyze regional trends; please contact your local association of Realtors® for more information.
¹The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
²Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases.
³The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
4Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for October will be released November 24, and the next Pending Home Sales Index & Forecast is scheduled for release at 11:30 a.m. EST November 7 at NAR’s annual convention in Orlando, Fla. For more information visit: www.realtor.org/research/research/ehsdata
Writing your goals and objectives
Why writing your Goals & Objectives is important!
Writing down your Dreams and Goals is an important first step towards achieving them. First, because by writing them down it forces you visualize your Goals, and second, because the act of writing them down creates a commitment on your part. Only about 5% of the population actually takes the time to write down their Goals and Dreams. Maybe that is why so few people actually are living the life that they would like to be living.
Writing down your goals creates the roadmap to your success. Although just the act of writing them down can set the process in motion, it is also extremely important to review your goals frequently. Remember, the more focused you are on your goals the more likely you are to accomplish them.
Here are the four rules of writing goals down:
1. Write your goal in the positive.
Work for what you want, not for what you want to leave behind. Part of the reason why we write down and examine our goals is to create a set of instructions for our subconscious mind to carry out. Your subconscious mind is a very efficient tool, it can not determine right from wrong and it does not judge. It's only function is to carry out its instructions. The more positive instructions you give it, the more positive results you will get. Thinking positively in everyday life will also help in your growth as a human being. Don't limit it to goal setting.
2. Write your goals out in complete detail.
Instead of writing "A new home," write "A 4,000 square foot contemporary with 4 bedrooms and 3 baths and a view of the mountain on 20 acres of land". Once again we are giving the subconscious mind a detailed set of instructions to work on. The more information you give it, the clearer the final outcome becomes. The more precise the outcome, the more efficient the subconscious mind can become. Can you close your eyes and visualize the home I described above? Walk around the house. Stand on the porch off the master bedroom and see the fog lifting off the mountain. Look down at the garden full of tomatoes, green beans and cucumbers. And off to the right is the other garden full of mums, carnations and roses. Can you see it? So can your subconscious mind.
3. Write in present tense.
Write your goals down in the present tense. This is because the unconscious mind chooses a path of least resistance. If you write, "I will be slim" the unconscious mind does nothing thinking that the will be may be postponed until later. A friend had a business, which was losing money. He set his goal to break even the next month. Every month the next month would come and be this month so his goal would be true to break even the next month, which would never come. Eventually he changed his goal to, "I am breaking even this month." That very month he broke even for the first time. Write them in present tense, first person, as if they are currently true.
4. Re-write your goals.
When the words are written and then repeatedly re-written they have maximum impact. So don't be content with a first draft.
Write down your goal. Then rephrase it, compact it, add motivating adjectives, make it pithy. A week later you may want to adjust it again. Keep on fine-tuning. Writing your goals down is the first step to make the goals more real. Somehow having things in writing really makes them seem more important to most people. It will also make it easier to make the plans needed to reach your goals if you have something in writing.
Putting it in writing breathes life into it making it a force
Writing down your Dreams and Goals is an important first step towards achieving them. First, because by writing them down it forces you visualize your Goals, and second, because the act of writing them down creates a commitment on your part. Only about 5% of the population actually takes the time to write down their Goals and Dreams. Maybe that is why so few people actually are living the life that they would like to be living.
Writing down your goals creates the roadmap to your success. Although just the act of writing them down can set the process in motion, it is also extremely important to review your goals frequently. Remember, the more focused you are on your goals the more likely you are to accomplish them.
Here are the four rules of writing goals down:
1. Write your goal in the positive.
Work for what you want, not for what you want to leave behind. Part of the reason why we write down and examine our goals is to create a set of instructions for our subconscious mind to carry out. Your subconscious mind is a very efficient tool, it can not determine right from wrong and it does not judge. It's only function is to carry out its instructions. The more positive instructions you give it, the more positive results you will get. Thinking positively in everyday life will also help in your growth as a human being. Don't limit it to goal setting.
2. Write your goals out in complete detail.
Instead of writing "A new home," write "A 4,000 square foot contemporary with 4 bedrooms and 3 baths and a view of the mountain on 20 acres of land". Once again we are giving the subconscious mind a detailed set of instructions to work on. The more information you give it, the clearer the final outcome becomes. The more precise the outcome, the more efficient the subconscious mind can become. Can you close your eyes and visualize the home I described above? Walk around the house. Stand on the porch off the master bedroom and see the fog lifting off the mountain. Look down at the garden full of tomatoes, green beans and cucumbers. And off to the right is the other garden full of mums, carnations and roses. Can you see it? So can your subconscious mind.
3. Write in present tense.
Write your goals down in the present tense. This is because the unconscious mind chooses a path of least resistance. If you write, "I will be slim" the unconscious mind does nothing thinking that the will be may be postponed until later. A friend had a business, which was losing money. He set his goal to break even the next month. Every month the next month would come and be this month so his goal would be true to break even the next month, which would never come. Eventually he changed his goal to, "I am breaking even this month." That very month he broke even for the first time. Write them in present tense, first person, as if they are currently true.
4. Re-write your goals.
When the words are written and then repeatedly re-written they have maximum impact. So don't be content with a first draft.
Write down your goal. Then rephrase it, compact it, add motivating adjectives, make it pithy. A week later you may want to adjust it again. Keep on fine-tuning. Writing your goals down is the first step to make the goals more real. Somehow having things in writing really makes them seem more important to most people. It will also make it easier to make the plans needed to reach your goals if you have something in writing.
Putting it in writing breathes life into it making it a force
What is a condotel?
WHAT IS A CONDOTEL
To better understand the concept of a condotel, I 'd like to explain a
little about condominiums and condominium buildings. Each condominium
building/project has a Declaration of covenants as well as Bylaws. This
document articulates all the rules and regulations related to that
Condominium by which all owners agree to abide by. These rules and
regulations include but are not restricted to topics such as common area
use and maintenance, governance, parking, whether pets are allowed or
not, and most relevant to this topic, whether condo owners are allowed
to rent their units to others and for what minimal periods of time. For
example, these rental restrictions can range from no rentals allowed, to
minimum of one year at a time, to minimums of 6 months or one month, or
two weeks or one week or in for one day at a time. All owners in that
condominium must adhere to these rental restrictions.
A condotel is a condominium with a rental restriction of 'one day'. In
other words, owners may rent out their personal units for periods as
short as one day at a time - like a hotel. Owners are not required to
rent their units at all if they do not wish to do so but they are
allowed to in accordance with their 'Condo Docs'.
RENTING A CONDOTEL
Most Condominiums (represented by a Board of Directors) with short-term
rental restriction enter into a contract with a rental management
company to manage the rental program in that complex. The Rental
management company subsequently enters into a rental agreement with
individual unit owners who wish to rent their units to the public. This
rental agreement establishes the terms such as the percentage of revenue
to be earned by the owner. For example , it is not uncommon for the
gross revenue to be shared by the unit owner and the Rental Management
company 50/50.
In all other matters, owning a unit in a 'Condotel' is little different
from owning a large three-bedroom condo or in fact a single-family
residence in a community with shared amenities. The unit/home owner
legally holds the deed to the condo with all the rights, privileges and
responsibilities therein.
LIABILITY
So, in answer to your question, 'what happens to the condo unit if the
'hotel' goes bankrupt', the answer is 'nothing' except that the rental
agreement between the owner of the unit and the rental management
company is now null and void. The Board of Directors will now have to
find another rental management company to manage the 'hotel' for that
condominium.
INSURANCE
In answer to your second question regarding insurance, each condo
association must pay for insurance for the building, roof and common
areas. This expense is built into the monthly maintenance fees paid by
each unit owner. Increasing insurance costs have resulted in increases
in monthly maintenance fees. The average increase has been about $100/m
per unit. Condo maintenance fees can now range from $160/m to $900/m,
but include other shared expenses such as water sewage, landscaping,
cable etc. Unit owners are responsible for insuring the contents and
interior of their own unit. This also includes liability if it should
be rented. The cost for this insurance also ranges depending on the
extent of coverage purchased (similar to a single family home owner).
However, as an example, condotel insurance currently costs about $200 -
$600/year.
PROPERTY TAXES
Contrary to what many foreigners believe, the property tax system in
Florida is NOT punitive to foreign buyers. The Homestead exemption
serves to reduce taxes for primary residence owners - including foreign
buyers. If the property is not a primary residence then no reductions
are applied - including Florida residents. In other words, the same
tax rate applies to all property owners of second homes, regardless of
who they are. A Florida resident will pay the same taxes on their
second home (eg condo) as you would as a foreign buyer.
The formula for calculating taxes is based on the assessed value, (which
is calculated annually by the property appraisers office), and the
millage rate for that city. As a general rule of thumb, it is
approximately 1.5% - 2% of the purchase price of the property. Property
taxes on a $200,000 property will be approximately $3,500/yr.
FORECLOSURES
The process for acquiring a foreclosed property in Florida does not
involve specific representation of a financial institution. Financial
institutions are not in the real estate business and wish to release
themselves of real estate holdings as soon as possible. As a result, as
soon as they are in a legal position to dispose a property, they secure
the services of a Realtor who is required to market the property through
the MLS system as any other property. As a result, the only way to
purchase a foreclosed property is through the listing agent on MLS
system. Financial institutions will not negotiate directly with a
buyer.
CONDOTEL AVAILABLILITY
There are currently 279 ocean front condotels available in the Daytona
area ranging in price from $40,000 to $459,000! Sizes range from 250
sq ft to 1,700 sq ft., age ranges from 1965 to 2006, some are direct
ocean front facing and some face parking lots, some are renovated, some
are original. Other factors to consider are location, rental management,
and association management, condition of building, condo restrictions,
as well as personal appeal. Condo selection will also depend on your
goals - is maximum revenue important or less so?
To better understand the concept of a condotel, I 'd like to explain a
little about condominiums and condominium buildings. Each condominium
building/project has a Declaration of covenants as well as Bylaws. This
document articulates all the rules and regulations related to that
Condominium by which all owners agree to abide by. These rules and
regulations include but are not restricted to topics such as common area
use and maintenance, governance, parking, whether pets are allowed or
not, and most relevant to this topic, whether condo owners are allowed
to rent their units to others and for what minimal periods of time. For
example, these rental restrictions can range from no rentals allowed, to
minimum of one year at a time, to minimums of 6 months or one month, or
two weeks or one week or in for one day at a time. All owners in that
condominium must adhere to these rental restrictions.
A condotel is a condominium with a rental restriction of 'one day'. In
other words, owners may rent out their personal units for periods as
short as one day at a time - like a hotel. Owners are not required to
rent their units at all if they do not wish to do so but they are
allowed to in accordance with their 'Condo Docs'.
RENTING A CONDOTEL
Most Condominiums (represented by a Board of Directors) with short-term
rental restriction enter into a contract with a rental management
company to manage the rental program in that complex. The Rental
management company subsequently enters into a rental agreement with
individual unit owners who wish to rent their units to the public. This
rental agreement establishes the terms such as the percentage of revenue
to be earned by the owner. For example , it is not uncommon for the
gross revenue to be shared by the unit owner and the Rental Management
company 50/50.
In all other matters, owning a unit in a 'Condotel' is little different
from owning a large three-bedroom condo or in fact a single-family
residence in a community with shared amenities. The unit/home owner
legally holds the deed to the condo with all the rights, privileges and
responsibilities therein.
LIABILITY
So, in answer to your question, 'what happens to the condo unit if the
'hotel' goes bankrupt', the answer is 'nothing' except that the rental
agreement between the owner of the unit and the rental management
company is now null and void. The Board of Directors will now have to
find another rental management company to manage the 'hotel' for that
condominium.
INSURANCE
In answer to your second question regarding insurance, each condo
association must pay for insurance for the building, roof and common
areas. This expense is built into the monthly maintenance fees paid by
each unit owner. Increasing insurance costs have resulted in increases
in monthly maintenance fees. The average increase has been about $100/m
per unit. Condo maintenance fees can now range from $160/m to $900/m,
but include other shared expenses such as water sewage, landscaping,
cable etc. Unit owners are responsible for insuring the contents and
interior of their own unit. This also includes liability if it should
be rented. The cost for this insurance also ranges depending on the
extent of coverage purchased (similar to a single family home owner).
However, as an example, condotel insurance currently costs about $200 -
$600/year.
PROPERTY TAXES
Contrary to what many foreigners believe, the property tax system in
Florida is NOT punitive to foreign buyers. The Homestead exemption
serves to reduce taxes for primary residence owners - including foreign
buyers. If the property is not a primary residence then no reductions
are applied - including Florida residents. In other words, the same
tax rate applies to all property owners of second homes, regardless of
who they are. A Florida resident will pay the same taxes on their
second home (eg condo) as you would as a foreign buyer.
The formula for calculating taxes is based on the assessed value, (which
is calculated annually by the property appraisers office), and the
millage rate for that city. As a general rule of thumb, it is
approximately 1.5% - 2% of the purchase price of the property. Property
taxes on a $200,000 property will be approximately $3,500/yr.
FORECLOSURES
The process for acquiring a foreclosed property in Florida does not
involve specific representation of a financial institution. Financial
institutions are not in the real estate business and wish to release
themselves of real estate holdings as soon as possible. As a result, as
soon as they are in a legal position to dispose a property, they secure
the services of a Realtor who is required to market the property through
the MLS system as any other property. As a result, the only way to
purchase a foreclosed property is through the listing agent on MLS
system. Financial institutions will not negotiate directly with a
buyer.
CONDOTEL AVAILABLILITY
There are currently 279 ocean front condotels available in the Daytona
area ranging in price from $40,000 to $459,000! Sizes range from 250
sq ft to 1,700 sq ft., age ranges from 1965 to 2006, some are direct
ocean front facing and some face parking lots, some are renovated, some
are original. Other factors to consider are location, rental management,
and association management, condition of building, condo restrictions,
as well as personal appeal. Condo selection will also depend on your
goals - is maximum revenue important or less so?
A true story
True Story
His name was Fleming, and he was a poor Scottish farmer. One day, while
trying to make a living for his family, he heard a cry for help coming from a nearby bog. He dropped his tools and ran to the bog.
There, mired to his waist in black muck, was a terrified boy, screaming and struggling to free himself. Farmer Fleming saved the lad from what could have been a slow and terrifying death.
The next day, a fancy carriage pulled up to the Scotsman's sparse
surroundings. An elegantly dressed nobleman stepped out and introduced himself as the father of the boy Farmer Fleming had saved.
"I want to repay you," said the nobleman. "You saved my son's life."
"No, I can't accept payment for what I did," the Scottish farmer replied
waving off the offer. At that moment, the farmer's own son came to the door of the family hovel.
"Is that your son?" the nobleman asked.
"Yes," the farmer replied proudly.
"I'll make you a deal. Let me provide him with the level of education my
own son will enjoy. If the lad is anything like his father, he'll no doubt
grow to be a man we both will be proud of." And that he did.
Farmer Fleming's son attended the very best schools and in time, graduated
from St. Mary's Hospital Medical School in London, and went on to become
known throughout the world as the noted Sir Alexander Fleming, the
discoverer of Penicillin.
Years afterward, the same nobleman's son who was saved from the bog was stricken with pneumonia.
What saved his life this time? Penicillin.
The name of the nobleman? Lord Randolph Churchill. His son's name?
Sir Winston Churchill.
Someone once said: What goes around comes around.
Work like you don't need the money.
Love like you've never been hurt.
Dance like nobody's watching.
Sing like nobody's listening.
Live like it's Heaven on Earth.
His name was Fleming, and he was a poor Scottish farmer. One day, while
trying to make a living for his family, he heard a cry for help coming from a nearby bog. He dropped his tools and ran to the bog.
There, mired to his waist in black muck, was a terrified boy, screaming and struggling to free himself. Farmer Fleming saved the lad from what could have been a slow and terrifying death.
The next day, a fancy carriage pulled up to the Scotsman's sparse
surroundings. An elegantly dressed nobleman stepped out and introduced himself as the father of the boy Farmer Fleming had saved.
"I want to repay you," said the nobleman. "You saved my son's life."
"No, I can't accept payment for what I did," the Scottish farmer replied
waving off the offer. At that moment, the farmer's own son came to the door of the family hovel.
"Is that your son?" the nobleman asked.
"Yes," the farmer replied proudly.
"I'll make you a deal. Let me provide him with the level of education my
own son will enjoy. If the lad is anything like his father, he'll no doubt
grow to be a man we both will be proud of." And that he did.
Farmer Fleming's son attended the very best schools and in time, graduated
from St. Mary's Hospital Medical School in London, and went on to become
known throughout the world as the noted Sir Alexander Fleming, the
discoverer of Penicillin.
Years afterward, the same nobleman's son who was saved from the bog was stricken with pneumonia.
What saved his life this time? Penicillin.
The name of the nobleman? Lord Randolph Churchill. His son's name?
Sir Winston Churchill.
Someone once said: What goes around comes around.
Work like you don't need the money.
Love like you've never been hurt.
Dance like nobody's watching.
Sing like nobody's listening.
Live like it's Heaven on Earth.
Top 7 reasons to use a Buyer's Agent
Top 7 Reasons to Use a Buyer's Agent When Purchasing Your Home
Purchasing a home is a big step, and a big decision. The average person spends around 1/3 of their income on their home. The home that you choose has a big impact on your life, and can have a big impact on your finances, as well. It always surprises me when Buyers attempt to "go at it alone" because of the possibility of mistakes. A good Buyer's Agent is invaluable to a Buyer, and can be the difference between a wonderful transaction, and a nightmare.
1) Full Access to the MLS
The Multiple Listing Service (MLS) is a powerful tool that only Realtors have access to. When listing agents market a home for sale, they typically allow any Realtor to present the home to potential buyers, and to present contracts for purchase. The MLS is a database of all homes listed by Realtors, and represents roughly 99% of the homes for sale in any given market. As technology advances, so does the MLS. It has evolved into an extremely powerful search engine that allows your buyer's agent to enter in search criteria, and returns only homes that match those specific parameters. Buyers can find a lot of this information online through IDX feeds available on many websites, but this information is a "watered down" version of the MLS because the IDX search engines aren't quite as powerful, and don't return as detailed profiles as the MLS.
2) Maximize Your Time
While driving neighborhoods is an excellent idea to help you decide which locations you prefer, it's not a very efficient way to find your new home. Gas is expensive, and your time is valuable. Your Buyer's Agent will listen to your needs, make fantastic suggestions based on your likes & dislikes, and provide you with a list of homes that ALL match your wants & needs. Your Buyer's Agent has helped MANY new homebuyers through MANY purchases, and will help you better organize your search & decision making process – saving you valuable time.
3) Representation
Listing Agents enter into legally binding agreements that require them to ALWAYS act in the best interest of the seller. They are the seller's "coach" and will make sure that their clients' best interests are looked after. Luckily, your Buyer's Agent is there to make sure YOUR best interests are accounted for. With your expert Buyer's Agent in your corner, you can rest assured that you're on, at least, even ground with the home seller. A football team would be at a pretty significant disadvantage without a coach – just as you would be without a Buyer's Agent.
4) Negotiating Power
The MLS maintains a record of, not only all homes listed by Realtors in a given market, but also the sales price of those homes. Your Buyer's Agent will run a Comparative Market Analysis (CMA) to determine a prospective home's Fair Market Value (FMV). In simpler terms, your Realtor will look at similar homes in the same neighborhood that have sold recently. This way, you will know whether or not the seller has their home priced fairly. If the home is priced over Fair Market Value, your Buyer's Agent can present your "under asking price" offer with plenty of firepower – and a greater chance that the offer will be accepted.
) Experience
The average person buys 3-5 homes in their lifetime. A good Buyer's Agent will assist in 3-5 home purchases every month. What might seem complicated and intimidating to you is fairly common and familiar to your Realtor. Your Buyer's Agent will know what to expect, and will know when to alert you if anything out of the ordinary occurs.
6) Industry Contacts
It takes a lot of people to close a real estate transaction – Buyer's Agent, Listing Agent, Loan Officer, Inspector, Appraiser, Insurance Agent, General Contractors, and sometimes more! A good agent will come with a strong closing team that has performed in the past, and will continue to perform. A transaction is only as strong as its weakest link – with your strong Buyer's Agent & their closing team, you can rest assured that you will have plenty of support.
7) Piece of Mind
If you are like most people, your home is the largest purchase you will ever make. The average person spends around 1/3 of their total monthly income on their home. This is a big decision and you don't want to go at it alone. When you use a trusted Buyer's Agent, you know that your best interests are accounted for, and that you can feel confident in your purchase.
Purchasing a home can be a fun and exciting process. However, the home buying process can be intimidating, and mistakes are possible. A Realtor who specializes in working with Buyers can help alleviate the fears & possibilities for mistakes. Make sure and use a Buyer's Agent on any real estate transaction, and you will help ensure that you are making the right decisions.
Purchasing a home is a big step, and a big decision. The average person spends around 1/3 of their income on their home. The home that you choose has a big impact on your life, and can have a big impact on your finances, as well. It always surprises me when Buyers attempt to "go at it alone" because of the possibility of mistakes. A good Buyer's Agent is invaluable to a Buyer, and can be the difference between a wonderful transaction, and a nightmare.
1) Full Access to the MLS
The Multiple Listing Service (MLS) is a powerful tool that only Realtors have access to. When listing agents market a home for sale, they typically allow any Realtor to present the home to potential buyers, and to present contracts for purchase. The MLS is a database of all homes listed by Realtors, and represents roughly 99% of the homes for sale in any given market. As technology advances, so does the MLS. It has evolved into an extremely powerful search engine that allows your buyer's agent to enter in search criteria, and returns only homes that match those specific parameters. Buyers can find a lot of this information online through IDX feeds available on many websites, but this information is a "watered down" version of the MLS because the IDX search engines aren't quite as powerful, and don't return as detailed profiles as the MLS.
2) Maximize Your Time
While driving neighborhoods is an excellent idea to help you decide which locations you prefer, it's not a very efficient way to find your new home. Gas is expensive, and your time is valuable. Your Buyer's Agent will listen to your needs, make fantastic suggestions based on your likes & dislikes, and provide you with a list of homes that ALL match your wants & needs. Your Buyer's Agent has helped MANY new homebuyers through MANY purchases, and will help you better organize your search & decision making process – saving you valuable time.
3) Representation
Listing Agents enter into legally binding agreements that require them to ALWAYS act in the best interest of the seller. They are the seller's "coach" and will make sure that their clients' best interests are looked after. Luckily, your Buyer's Agent is there to make sure YOUR best interests are accounted for. With your expert Buyer's Agent in your corner, you can rest assured that you're on, at least, even ground with the home seller. A football team would be at a pretty significant disadvantage without a coach – just as you would be without a Buyer's Agent.
4) Negotiating Power
The MLS maintains a record of, not only all homes listed by Realtors in a given market, but also the sales price of those homes. Your Buyer's Agent will run a Comparative Market Analysis (CMA) to determine a prospective home's Fair Market Value (FMV). In simpler terms, your Realtor will look at similar homes in the same neighborhood that have sold recently. This way, you will know whether or not the seller has their home priced fairly. If the home is priced over Fair Market Value, your Buyer's Agent can present your "under asking price" offer with plenty of firepower – and a greater chance that the offer will be accepted.
) Experience
The average person buys 3-5 homes in their lifetime. A good Buyer's Agent will assist in 3-5 home purchases every month. What might seem complicated and intimidating to you is fairly common and familiar to your Realtor. Your Buyer's Agent will know what to expect, and will know when to alert you if anything out of the ordinary occurs.
6) Industry Contacts
It takes a lot of people to close a real estate transaction – Buyer's Agent, Listing Agent, Loan Officer, Inspector, Appraiser, Insurance Agent, General Contractors, and sometimes more! A good agent will come with a strong closing team that has performed in the past, and will continue to perform. A transaction is only as strong as its weakest link – with your strong Buyer's Agent & their closing team, you can rest assured that you will have plenty of support.
7) Piece of Mind
If you are like most people, your home is the largest purchase you will ever make. The average person spends around 1/3 of their total monthly income on their home. This is a big decision and you don't want to go at it alone. When you use a trusted Buyer's Agent, you know that your best interests are accounted for, and that you can feel confident in your purchase.
Purchasing a home can be a fun and exciting process. However, the home buying process can be intimidating, and mistakes are possible. A Realtor who specializes in working with Buyers can help alleviate the fears & possibilities for mistakes. Make sure and use a Buyer's Agent on any real estate transaction, and you will help ensure that you are making the right decisions.
Rent or Buy?
Rent or Buy? Which is best for you
Should you sign another lease or take the plunge and buy a place of your own? Millions of Americans ask themselves that question everyday. To make a wise decision consumers should consider a few factors, such as their lifestyle and financial situation. There is no right or wrong answer when trying to make a decision to rent or buy. A good decision is one that is right for you. However, there are advantages and disadvantages to both.
Although most Americans own their homes, homeownership is not for everyone. If you move around frequently, have credit problems or if you cannot afford the home you want or simply do not want the responsibility of owning a home, you could be better off renting. Usually when renting, the landlord or owner of the property generally pays for the cost of any work or repairs that are done to the property. And, there is generally less up-front cash needed to move in.
However, when you are renting a property, you are waving good-bye to your money each month. Renting a home does not provide tax advantages to the renter. Any and all tax advantages go to the landlord or property owner. Also, monthly payments for renters can be unpredictable, depending on the lease.
Owning a home is a big responsibility. Not only does it mean paying a mortgage each month, but it also involves other costs associated with the home, such as, the cost of insurance, taxes, repairs and general maintenance. First-time homebuyers are often startled by the investment associated with purchasing a house. The down payment required can be as much as 20 percent. You also have to consider other fees, such as lawyer's fees, points, escrow costs, appraisals, and credit checks.
In spite of the risks and responsibilities, millions of people enjoy the rewards of home ownership. Purchasing a home is generally a sound investment. As you pay down your home loan, you are building equity. And unlike many things you buy, a home can actually increase in value over time.
Home ownership does offer tax advantages. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housing-related expenses from your income, thereby reducing your tax liability.
There is not much doubt that for most people owning a home is better over the long term than renting. When you have made the decision to buy, do your homework. Know how large a mortgage you can afford. If possible, get "pre-qualified" for a loan. When you find a home you like, carefully give it your own personal inspection. If you have questions, seek the advice of a professional. And, contact the Better Business Bureau for a reliability report on the mortgage company that you decide to do business with.
4/18/2003
© 2003 Council of Better Business Bureaus, Inc.
Should you sign another lease or take the plunge and buy a place of your own? Millions of Americans ask themselves that question everyday. To make a wise decision consumers should consider a few factors, such as their lifestyle and financial situation. There is no right or wrong answer when trying to make a decision to rent or buy. A good decision is one that is right for you. However, there are advantages and disadvantages to both.
Although most Americans own their homes, homeownership is not for everyone. If you move around frequently, have credit problems or if you cannot afford the home you want or simply do not want the responsibility of owning a home, you could be better off renting. Usually when renting, the landlord or owner of the property generally pays for the cost of any work or repairs that are done to the property. And, there is generally less up-front cash needed to move in.
However, when you are renting a property, you are waving good-bye to your money each month. Renting a home does not provide tax advantages to the renter. Any and all tax advantages go to the landlord or property owner. Also, monthly payments for renters can be unpredictable, depending on the lease.
Owning a home is a big responsibility. Not only does it mean paying a mortgage each month, but it also involves other costs associated with the home, such as, the cost of insurance, taxes, repairs and general maintenance. First-time homebuyers are often startled by the investment associated with purchasing a house. The down payment required can be as much as 20 percent. You also have to consider other fees, such as lawyer's fees, points, escrow costs, appraisals, and credit checks.
In spite of the risks and responsibilities, millions of people enjoy the rewards of home ownership. Purchasing a home is generally a sound investment. As you pay down your home loan, you are building equity. And unlike many things you buy, a home can actually increase in value over time.
Home ownership does offer tax advantages. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housing-related expenses from your income, thereby reducing your tax liability.
There is not much doubt that for most people owning a home is better over the long term than renting. When you have made the decision to buy, do your homework. Know how large a mortgage you can afford. If possible, get "pre-qualified" for a loan. When you find a home you like, carefully give it your own personal inspection. If you have questions, seek the advice of a professional. And, contact the Better Business Bureau for a reliability report on the mortgage company that you decide to do business with.
4/18/2003
© 2003 Council of Better Business Bureaus, Inc.
The Critical role of the Realtor
The Critical Role of the REALTOR®
Listed here are nearly 200 typical actions, research steps, procedures, processes and review stages in a
successful residential real estate transaction that are normally provided by full service real estate brokerages in return for their sales commission. Depending on the transaction, some may take minutes, hours, or even days to complete, while some may not be needed.
More importantly, they reflect the level of skill, knowledge and attention to detail required in today’s real estate transaction, underscoring the importance of having help and guidance from someone who fully understands the process – a REALTOR®.
And never forget that REALTORS® are pledged to uphold the stringent, enforceable tenets of the REALTOR® Code of Ethics in their professional dealings with the public. Not every real estate licensee holds REALTOR® membership. Make sure yours does!
Pre-Listing Activities
1. Make appointment with seller for listing presentation
2. Send seller a written or e-mail confirmation of listing appointment and call to confirm
3. Review pre-appointment questions
4. Research all comparable currently listed properties
5. Research sales activity for past 6-18 months from MLS and public records databases
6. Research "Average Days on Market" for this property of this type, price range and location
7. Download and review property tax roll information
8. Prepare "Comparable Market Analysis" (CMA) to establish fair market value
9. Obtain copy of subdivision plat/complex lay-out
10. Research property's ownership & deed type
11. Research property's public record information for lot size & dimensions
12. Research and verify legal description
13. Research property's land use coding and deed restrictions
14. Research property's current use and zoning
15. Verify legal names of owner(s) in county's public property records
16. Prepare listing presentation package with above materials
17. Perform exterior "Curb Appeal Assessment" of subject property
18. Compile and assemble formal file on property
19. Confirm current public schools and explain impact of schools on market value
20. Review listing appointment checklist to ensure all steps and actions have been completed
Listing Appointment Presentation
21. Give seller an overview of current market conditions and projections
22. Review agent's and company's credentials and accomplishments in the market
23. Present company's profile and position or "niche" in the marketplace
24. Present CMA Results To Seller, including Comparables, Solds, Current Listings & Expireds
25. Offer pricing strategy based on professional judgment and interpretation of current market conditions
26. Discuss Goals With Seller To Market Effectively
27. Explain market power and benefits of Multiple Listing Service
28. Explain market power of web marketing, IDX and REALTOR.com
29. Explain the work the brokerage and agent do "behind the scenes" and agent's availability on weekends
30. Explain agent's role in taking calls to screen for qualified buyers and protect seller from curiosity seekers
31. Present and discuss strategic master marketing plan
32. Explain different agency relationships and determine seller's preference
33. Review and explain all clauses in Listing Contract & Addendum and obtain seller's signature
Once Property is Under Listing Agreement
34. Review current title information
35. Measure overall and heated square footage
36. Measure interior room sizes
37. Confirm lot size via owner's copy of certified survey, if available
38. Note any and all unrecorded property lines, agreements, easements
39. Obtain house plans, if applicable and available
40. Review house plans and make copy
41. Order plat map for retention in property's listing file
42. Prepare showing instructions for buyers' agents and agree on showing time window with seller
43. Obtain current mortgage loan(s) information: companies and & loan account numbers
44. Verify current loan information with lender(s)
45. Check assumability of loan(s) and any special requirements
46. Discuss possible buyer financing alternatives and options with seller
47. Review current appraisal if available
48. Identify Home Owner Association manager if applicable
49. Verify Home Owner Association Fees with manager - mandatory or optional and current annual fee
50. Order copy of Homeowner Association bylaws, if applicable
51. Research electricity availability and supplier's name and phone number
52. Calculate average utility usage from last 12 months of bills
53. Research and verify city sewer/septic tank system
54. Water System: Calculate average water fees or rates from last 12 months of bills )
55. Well Water: Confirm well status, depth and output from Well Report
56. Natural Gas: Research/verify availability and supplier's name and phone number
57. Verify security system, current term of service and whether owned or leased
58. Verify if seller has transferable Termite Bond
59. Ascertain need for lead-based paint disclosure
60. Prepare detailed list of property amenities and assess market impact
61. Prepare detailed list of property's "Inclusions & Conveyances with Sale"
62. Compile list of completed repairs and maintenance items
63. Send "Vacancy Checklist" to seller if property is vacant
64. Explain benefits of Home Owner Warranty to seller
65. Assist sellers with completion and submission of Home Owner Warranty Application
66. When received, place Home Owner Warranty in property file for conveyance at time of sale
67. Have extra key made for lockbox
68. Verify if property has rental units involved. And if so:
69. Make copies of all leases for retention in listing file
70. Verify all rents & deposits
71. Inform tenants of listing and discuss how showings will be handled
72. Arrange for installation of yard sign
73. Assist seller with completion of Seller's Disclosure form
74. "New Listing Checklist" Completed
75. Review results of Curb Appeal Assessment with seller and provide suggestions to improve salability
76. Review results of Interior Décor Assessment and suggest changes to shorten time on market
77. Load listing into transaction management software program
Entering Property in Multiple Listing Service Database
78. Prepare MLS Profile Sheet -- Agents is responsible for "quality control" and accuracy of listing data
79. Enter property data from Profile Sheet into MLS Listing Database
80. Proofread MLS database listing for accuracy - including proper placement in mapping function
81. Add property to company's Active Listings list
82. Provide seller with signed copies of Listing Agreement and MLS Profile Sheet Data Form within 48 hours
83. Take additional photos for upload into MLS and use in flyers. Discuss efficacy of panoramic photography
Marketing The Listing
84. Create print and Internet ads with seller's input
85. Coordinate showings with owners, tenants, and other Realtors®. Return all calls - weekends included
86. Install electronic lock box if authorized by owner. Program with agreed-upon showing time windows
87. Prepare mailing and contact list
88. Generate mail-merge letters to contact list
89. Order “Just Listed” labels & reports
90. Prepare flyers & feedback faxes
91. Review comparable MLS listings regularly to ensure property remains competitive in price, terms,
conditions and availability
92. Prepare property-marketing brochure for seller's review
93. Arrange for printing or copying of supply of marketing brochures or fliers
94. Place marketing brochures in all company agent mailboxes
95. Upload listing to company and agent Internet site, if applicable
96. Mail Out "Just Listed" notice to all neighborhood residents
97. Advise Network Referral Program of listing
98. Provide marketing data to buyers coming through international relocation networks
99. Provide marketing data to buyers coming from referral network
100. Provide "Special Feature" cards for marketing, if applicable
101. Submit ads to company's participating Internet real estate sites
102. Price changes conveyed promptly to all Internet groups
103. Reprint/supply brochures promptly as needed
104. Loan information reviewed and updated in MLS as required
105. Feedback e-mails/faxes sent to buyers' agents after showings
106. Review weekly Market Study
107. Discuss feedback from showing agents with seller to determine if changes will accelerate the sale
108. Place regular weekly update calls to seller to discuss marketing & pricing
109. Promptly enter price changes in MLS listing database
The Offer and Contract
109. Receive and review all Offer to Purchase contracts submitted by buyers or buyers' agents.
110. Evaluate offer(s) and prepare a "net sheet" on each for the owner for comparison purposes
111. Counsel seller on offers. Explain merits and weakness of each component of each offer
112. Contact buyers' agents to review buyer's qualifications and discuss offer
113. Fax/deliver Seller's Disclosure to buyer's agent or buyer upon request and prior to offer if possible
114. Confirm buyer is pre-qualified by calling Loan Officer
115. Obtain pre-qualification letter on buyer from Loan Officer
116. Negotiate all offers on seller's behalf, setting time limit for loan approval and closing date
117. Prepare and convey any counteroffers, acceptance or amendments to buyer's agent
118. Fax copies of contract and all addendums to closing attorney or title company
119. When Offer to Purchase Contract is accepted and signed by seller, deliver to buyer's agent
120. Record and promptly deposit buyer's earnest money in escrow account.
121. Disseminate "Under-Contract Showing Restrictions" as seller requests
122. Deliver copies of fully signed Offer to Purchase contract to seller
123. Fax/deliver copies of Offer to Purchase contract to Selling Agent
123. Fax copies of Offer to Purchase contract to lender
124. Provide copies of signed Offer to Purchase contract for office file
125. Advise seller in handling additional offers to purchase submitted between contract and closing
126. Change status in MLS to "Sale Pending"
127. Update transaction management program to show "Sale Pending"
128. Review buyer's credit report results -- Advise seller of worst and best case scenarios
129. Provide credit report information to seller if property will be seller-financed
130. Assist buyer with obtaining financing, if applicable and follow-up as necessary
131. Coordinate with lender on Discount Points being locked in with dates
132. Deliver unrecorded property information to buyer
133. Order septic system inspection, if applicable
134. Receive and review septic system report and assess any possible impact on sale
135. Deliver copy of septic system inspection report lender & buyer
136. Deliver Well Flow Test Report copies to lender & buyer and property listing file
137. Verify termite inspection ordered
138. Verify mold inspection ordered, if required
Tracking the Loan Process
139. Confirm Verifications Of Deposit & Buyer's Employment Have Been Returned
140. Follow Loan Processing Through To The Underwriter
141. Add lender and other vendors to transaction management program so agents, buyer and seller can track
progress of sale
142. Contact lender weekly to ensure processing is on track
143. Relay final approval of buyer's loan application to seller
Home Inspection
144. Coordinate buyer's professional home inspection with seller
145. Review home inspector's report
146. Enter completion into transaction management tracking software program
147. Explain seller's responsibilities with respect to loan limits and interpret any clauses in the contract
148. Ensure seller's compliance with Home Inspection Clause requirements
149. Recommend or assist seller with identifying and negotiating with trustworthy contractors to perform
any required repairs
150. Negotiate payment and oversee completion of all required repairs on seller's behalf, if needed
The Appraisal
151. Schedule Appraisal
154. Provide comparable sales used in market pricing to Appraiser
152. Follow-Up On Appraisal
151. Enter completion into transaction management program
153. Assist seller in questioning appraisal report if it seems too low
Closing Preparations and Duties
154. Contract Is Signed By All Parties
155. Coordinate closing process with buyer's agent and lender
156. Update closing forms & files
157. Ensure all parties have all forms and information needed to close the sale
158. Select location where closing will be held
159. Confirm closing date and time and notify all parties
160. Assist in solving any title problems (boundary disputes, easements, etc) or in obtaining Death Certificates
161. Work with buyer's agent in scheduling and conducting buyer's Final Walk-Thru prior to closing
162. Research all tax, HOA, utility and other applicable prorations
162. Request final closing figures from closing agent (attorney or title company)
163. Receive & carefully review closing figures to ensure accuracy of preparation
164. Forward verified closing figures to buyer's agent
165. Request copy of closing documents from closing agent
166. Confirm buyer and buyer's agent have received title insurance commitment
167. Provide "Home Owners Warranty" for availability at closing
168. Review all closing documents carefully for errors
169. Forward closing documents to absentee seller as requested
170. Review documents with closing agent (attorney)
171. Provide earnest money deposit check from escrow account to closing agent
173. Coordinate this closing with seller's next purchase and resolve any timing problems
174. Have a "no surprises" closing so that seller receives a net proceeds check at closing
175. Refer sellers to one of the best agents at their destination, if applicable
176. Change MLS status to Sold. Enter sale date, price, selling broker and agent's ID numbers, etc.
177. Close out listing in transaction management program
Follow Up After Closing
178. Answer questions about filing claims with Home Owner Warranty company if requested
179. Attempt to clarify and resolve any conflicts about repairs if buyer is not satisfied
180. Respond to any follow-on calls and provide any additional information required from office files.
Listed here are nearly 200 typical actions, research steps, procedures, processes and review stages in a
successful residential real estate transaction that are normally provided by full service real estate brokerages in return for their sales commission. Depending on the transaction, some may take minutes, hours, or even days to complete, while some may not be needed.
More importantly, they reflect the level of skill, knowledge and attention to detail required in today’s real estate transaction, underscoring the importance of having help and guidance from someone who fully understands the process – a REALTOR®.
And never forget that REALTORS® are pledged to uphold the stringent, enforceable tenets of the REALTOR® Code of Ethics in their professional dealings with the public. Not every real estate licensee holds REALTOR® membership. Make sure yours does!
Pre-Listing Activities
1. Make appointment with seller for listing presentation
2. Send seller a written or e-mail confirmation of listing appointment and call to confirm
3. Review pre-appointment questions
4. Research all comparable currently listed properties
5. Research sales activity for past 6-18 months from MLS and public records databases
6. Research "Average Days on Market" for this property of this type, price range and location
7. Download and review property tax roll information
8. Prepare "Comparable Market Analysis" (CMA) to establish fair market value
9. Obtain copy of subdivision plat/complex lay-out
10. Research property's ownership & deed type
11. Research property's public record information for lot size & dimensions
12. Research and verify legal description
13. Research property's land use coding and deed restrictions
14. Research property's current use and zoning
15. Verify legal names of owner(s) in county's public property records
16. Prepare listing presentation package with above materials
17. Perform exterior "Curb Appeal Assessment" of subject property
18. Compile and assemble formal file on property
19. Confirm current public schools and explain impact of schools on market value
20. Review listing appointment checklist to ensure all steps and actions have been completed
Listing Appointment Presentation
21. Give seller an overview of current market conditions and projections
22. Review agent's and company's credentials and accomplishments in the market
23. Present company's profile and position or "niche" in the marketplace
24. Present CMA Results To Seller, including Comparables, Solds, Current Listings & Expireds
25. Offer pricing strategy based on professional judgment and interpretation of current market conditions
26. Discuss Goals With Seller To Market Effectively
27. Explain market power and benefits of Multiple Listing Service
28. Explain market power of web marketing, IDX and REALTOR.com
29. Explain the work the brokerage and agent do "behind the scenes" and agent's availability on weekends
30. Explain agent's role in taking calls to screen for qualified buyers and protect seller from curiosity seekers
31. Present and discuss strategic master marketing plan
32. Explain different agency relationships and determine seller's preference
33. Review and explain all clauses in Listing Contract & Addendum and obtain seller's signature
Once Property is Under Listing Agreement
34. Review current title information
35. Measure overall and heated square footage
36. Measure interior room sizes
37. Confirm lot size via owner's copy of certified survey, if available
38. Note any and all unrecorded property lines, agreements, easements
39. Obtain house plans, if applicable and available
40. Review house plans and make copy
41. Order plat map for retention in property's listing file
42. Prepare showing instructions for buyers' agents and agree on showing time window with seller
43. Obtain current mortgage loan(s) information: companies and & loan account numbers
44. Verify current loan information with lender(s)
45. Check assumability of loan(s) and any special requirements
46. Discuss possible buyer financing alternatives and options with seller
47. Review current appraisal if available
48. Identify Home Owner Association manager if applicable
49. Verify Home Owner Association Fees with manager - mandatory or optional and current annual fee
50. Order copy of Homeowner Association bylaws, if applicable
51. Research electricity availability and supplier's name and phone number
52. Calculate average utility usage from last 12 months of bills
53. Research and verify city sewer/septic tank system
54. Water System: Calculate average water fees or rates from last 12 months of bills )
55. Well Water: Confirm well status, depth and output from Well Report
56. Natural Gas: Research/verify availability and supplier's name and phone number
57. Verify security system, current term of service and whether owned or leased
58. Verify if seller has transferable Termite Bond
59. Ascertain need for lead-based paint disclosure
60. Prepare detailed list of property amenities and assess market impact
61. Prepare detailed list of property's "Inclusions & Conveyances with Sale"
62. Compile list of completed repairs and maintenance items
63. Send "Vacancy Checklist" to seller if property is vacant
64. Explain benefits of Home Owner Warranty to seller
65. Assist sellers with completion and submission of Home Owner Warranty Application
66. When received, place Home Owner Warranty in property file for conveyance at time of sale
67. Have extra key made for lockbox
68. Verify if property has rental units involved. And if so:
69. Make copies of all leases for retention in listing file
70. Verify all rents & deposits
71. Inform tenants of listing and discuss how showings will be handled
72. Arrange for installation of yard sign
73. Assist seller with completion of Seller's Disclosure form
74. "New Listing Checklist" Completed
75. Review results of Curb Appeal Assessment with seller and provide suggestions to improve salability
76. Review results of Interior Décor Assessment and suggest changes to shorten time on market
77. Load listing into transaction management software program
Entering Property in Multiple Listing Service Database
78. Prepare MLS Profile Sheet -- Agents is responsible for "quality control" and accuracy of listing data
79. Enter property data from Profile Sheet into MLS Listing Database
80. Proofread MLS database listing for accuracy - including proper placement in mapping function
81. Add property to company's Active Listings list
82. Provide seller with signed copies of Listing Agreement and MLS Profile Sheet Data Form within 48 hours
83. Take additional photos for upload into MLS and use in flyers. Discuss efficacy of panoramic photography
Marketing The Listing
84. Create print and Internet ads with seller's input
85. Coordinate showings with owners, tenants, and other Realtors®. Return all calls - weekends included
86. Install electronic lock box if authorized by owner. Program with agreed-upon showing time windows
87. Prepare mailing and contact list
88. Generate mail-merge letters to contact list
89. Order “Just Listed” labels & reports
90. Prepare flyers & feedback faxes
91. Review comparable MLS listings regularly to ensure property remains competitive in price, terms,
conditions and availability
92. Prepare property-marketing brochure for seller's review
93. Arrange for printing or copying of supply of marketing brochures or fliers
94. Place marketing brochures in all company agent mailboxes
95. Upload listing to company and agent Internet site, if applicable
96. Mail Out "Just Listed" notice to all neighborhood residents
97. Advise Network Referral Program of listing
98. Provide marketing data to buyers coming through international relocation networks
99. Provide marketing data to buyers coming from referral network
100. Provide "Special Feature" cards for marketing, if applicable
101. Submit ads to company's participating Internet real estate sites
102. Price changes conveyed promptly to all Internet groups
103. Reprint/supply brochures promptly as needed
104. Loan information reviewed and updated in MLS as required
105. Feedback e-mails/faxes sent to buyers' agents after showings
106. Review weekly Market Study
107. Discuss feedback from showing agents with seller to determine if changes will accelerate the sale
108. Place regular weekly update calls to seller to discuss marketing & pricing
109. Promptly enter price changes in MLS listing database
The Offer and Contract
109. Receive and review all Offer to Purchase contracts submitted by buyers or buyers' agents.
110. Evaluate offer(s) and prepare a "net sheet" on each for the owner for comparison purposes
111. Counsel seller on offers. Explain merits and weakness of each component of each offer
112. Contact buyers' agents to review buyer's qualifications and discuss offer
113. Fax/deliver Seller's Disclosure to buyer's agent or buyer upon request and prior to offer if possible
114. Confirm buyer is pre-qualified by calling Loan Officer
115. Obtain pre-qualification letter on buyer from Loan Officer
116. Negotiate all offers on seller's behalf, setting time limit for loan approval and closing date
117. Prepare and convey any counteroffers, acceptance or amendments to buyer's agent
118. Fax copies of contract and all addendums to closing attorney or title company
119. When Offer to Purchase Contract is accepted and signed by seller, deliver to buyer's agent
120. Record and promptly deposit buyer's earnest money in escrow account.
121. Disseminate "Under-Contract Showing Restrictions" as seller requests
122. Deliver copies of fully signed Offer to Purchase contract to seller
123. Fax/deliver copies of Offer to Purchase contract to Selling Agent
123. Fax copies of Offer to Purchase contract to lender
124. Provide copies of signed Offer to Purchase contract for office file
125. Advise seller in handling additional offers to purchase submitted between contract and closing
126. Change status in MLS to "Sale Pending"
127. Update transaction management program to show "Sale Pending"
128. Review buyer's credit report results -- Advise seller of worst and best case scenarios
129. Provide credit report information to seller if property will be seller-financed
130. Assist buyer with obtaining financing, if applicable and follow-up as necessary
131. Coordinate with lender on Discount Points being locked in with dates
132. Deliver unrecorded property information to buyer
133. Order septic system inspection, if applicable
134. Receive and review septic system report and assess any possible impact on sale
135. Deliver copy of septic system inspection report lender & buyer
136. Deliver Well Flow Test Report copies to lender & buyer and property listing file
137. Verify termite inspection ordered
138. Verify mold inspection ordered, if required
Tracking the Loan Process
139. Confirm Verifications Of Deposit & Buyer's Employment Have Been Returned
140. Follow Loan Processing Through To The Underwriter
141. Add lender and other vendors to transaction management program so agents, buyer and seller can track
progress of sale
142. Contact lender weekly to ensure processing is on track
143. Relay final approval of buyer's loan application to seller
Home Inspection
144. Coordinate buyer's professional home inspection with seller
145. Review home inspector's report
146. Enter completion into transaction management tracking software program
147. Explain seller's responsibilities with respect to loan limits and interpret any clauses in the contract
148. Ensure seller's compliance with Home Inspection Clause requirements
149. Recommend or assist seller with identifying and negotiating with trustworthy contractors to perform
any required repairs
150. Negotiate payment and oversee completion of all required repairs on seller's behalf, if needed
The Appraisal
151. Schedule Appraisal
154. Provide comparable sales used in market pricing to Appraiser
152. Follow-Up On Appraisal
151. Enter completion into transaction management program
153. Assist seller in questioning appraisal report if it seems too low
Closing Preparations and Duties
154. Contract Is Signed By All Parties
155. Coordinate closing process with buyer's agent and lender
156. Update closing forms & files
157. Ensure all parties have all forms and information needed to close the sale
158. Select location where closing will be held
159. Confirm closing date and time and notify all parties
160. Assist in solving any title problems (boundary disputes, easements, etc) or in obtaining Death Certificates
161. Work with buyer's agent in scheduling and conducting buyer's Final Walk-Thru prior to closing
162. Research all tax, HOA, utility and other applicable prorations
162. Request final closing figures from closing agent (attorney or title company)
163. Receive & carefully review closing figures to ensure accuracy of preparation
164. Forward verified closing figures to buyer's agent
165. Request copy of closing documents from closing agent
166. Confirm buyer and buyer's agent have received title insurance commitment
167. Provide "Home Owners Warranty" for availability at closing
168. Review all closing documents carefully for errors
169. Forward closing documents to absentee seller as requested
170. Review documents with closing agent (attorney)
171. Provide earnest money deposit check from escrow account to closing agent
173. Coordinate this closing with seller's next purchase and resolve any timing problems
174. Have a "no surprises" closing so that seller receives a net proceeds check at closing
175. Refer sellers to one of the best agents at their destination, if applicable
176. Change MLS status to Sold. Enter sale date, price, selling broker and agent's ID numbers, etc.
177. Close out listing in transaction management program
Follow Up After Closing
178. Answer questions about filing claims with Home Owner Warranty company if requested
179. Attempt to clarify and resolve any conflicts about repairs if buyer is not satisfied
180. Respond to any follow-on calls and provide any additional information required from office files.
The 1031 Reverse Exchange
The 1031 Reverse Exchange
Most real estate professionals know the benefits of using a 1031 like-kind exchange: Exchanges offer a value-added service to their clients that is often underused, and real estate professionals who offer them are all but certain to represent their clients in the search for the replacement property.
Now there’s a new option: the 1031 reverse exchange. The reverse exchange is a mirror image of a forward exchange, and the same timeframe applies. In a forward exchange, the exchanger (taxpayer) sells a property, then buys a replacement within six months. In a reverse exchange, the exchanger (taxpayer) buys new property first, then sells previously owned property within six months. The key is that an exchanger has only one property in his name at any one time.
A like-kind exchange is simply a way to exchange property and defer taxes. In 1991, a prescribed method for executing delayed tax-deferred exchanges of investment properties was developed and made part of the regulations by the Internal Revenue Service (IRS). This section of the tax code (IRC 1031) clarified the rules and opened doors of opportunity for investors.
The IRS introduced regulations into Section 1031 that allowed the delayed exchange of investment property through the use of a qualified intermediary. These regulations created a clearly defined process for trading property without losing any equity to income taxation.
The true power of exchanging is the ability to meet investment objectives without losing equity to taxation.
Facilitating Your Exchange
A benchmark requirement for the 1031 exchange process is that “qualified intermediaries” must be used to facilitate all transactions associated with an exchange. Qualified intermediaries are not allowed to act as an agent to any party of an exchange. They must also be certain they have not acted as such for at least two years prior to the exchange.
For this reason, real estate professionals should not be concerned about losing their client to an intermediary. The intermediary works for both the real estate professional and his or her client and is bound by U.S. Treasury regulations. All intermediary fees are paid by the exchanger at closing. Often, interest earned by escrowed funds provides earnings for the exchanger that could exceed the entire cost of the exchange.
With few exceptions, the following are considered “disqualified parties” (disqualified from acting as an intermediary) by U.S. Treasury regulations:
1. Close family members, controlled corporations, partnerships or trusts in which the person desiring the exchange has a 10 percent or greater interest.
2. Agents of the investor such as:
a. An employee
b. Closing/Escrow officer
c. Attorney or accountant
d. Investment banker/broker
e. Real estate salesperson/broker
Reverse Exchanges
Up to now, most reverse 1031 exchanges have been viewed as a problem because of the lack of a standard procedure and the high probability of audit. In September 2000, the IRS issued new provisions creating a “safe harbor” that makes it easier to take advantage of “reverse” tax-deferred exchanges.
The new provisions created specific procedures that, if followed precisely, will not be challenged by the IRS. But, some complications remain for the real estate investor, including lender problems and excessive recording expenses. Lenders don’t want to make loans where accommodators will be relieved of responsibility when the title of property, traded in a reverse exchange, is transferred to the exchanger.
And, exchangers are hit with paying double for doc stamps — once when the replacement property is purchased and transferred to the accommodator representing the exchanger (buyer), and again when the exchanger’s relinquished property closes and the title to the replacement property is transferred from accommodator to exchanger.
So, Why a Reverse Exchange?
If you understand emerging strategies for managing these complications, you can stand above your peers when it comes to providing a quality service for your clients. Why would exchangers want to enter into a reverse exchange in the first place?
We’ll tell you: Suppose you find that perfect investment property for your clients but they haven’t yet contracted to sell their relinquished property. As a real estate professional, you know that perfect investment property will be off the market soon. So, you suggest a reverse 1031 exchange and involve a qualified exchange intermediary/accommodator. By using a reverse 1031, your client can ensure that they will own that perfect investment property and still defer all taxes on the sale of their relinquished property so long as they meet the rules.
Navigating the Waters
There are still some choppy waters to be navigated in the “safe harbor,” but it can be done with the assistance of well-qualified accommodators who practice professionally within the U.S. Treasury regulations.
Here is the process for reverse exchanges:
1. Help the exchanger (your client) begin the process by helping him or her enter into a sales contract with a seller for the replacement (new) property.
2. Recommend a qualified intermediary/accommodator to your client. The accommodation agreement will be between your client and the accommodator. The accommodator will normally prepare all documents, make all assignments of contracts (sale and purchase) and notifications, hold deeds in trust, provide detailed instructions for closing officers and disburse all funds.
3. Help the exchanger find a buyer for the property to be relinquished. Usually the exchanger already knows what property will be relinquished. However, if he or she has several potential properties he or she might wish to see he or she will need to identify the property (s) to the accommodator within 45 days of the close on the replacement property.
4. Help the exchanger sell his or her property by entering into a contract to sell the relinquished property and close on the sale that property within 180 days of the closing of the purchase of the replacement property.
Some exchanges can be very complicated. Reverse exchanges are more complicated than a straight 1031 exchange, and if renovations or improvements are required, the procedure can become tedious.
Two Options for Reverse Exchanges
When using a reverse 1031 exchange, you have two options —exchange first or exchange last.
Exchanging First
Exchanging first simply charts another course around some of the obstacles that remain in the “safe harbor.” You face these difficulties every day working in a buyer/seller environment where success is measured in dollars and days.
When exchanging first, the exchanger deeds the relinquished property to the intermediary/accommodator as the first step in the transaction. When this is done, the exchanger is free to shop, buy and close on whatever real estate he or she desires without the obligation to relinquish before replacing.
As with a typical 1031 exchange, your client must still identify the replacement property within 45 days and close within 180 days of the date on which the first property was relinquished to the accommodator.
Exchanging first works particularly well when the exchanger must secure a loan with a deed of trust or mortgage in order to close on the replacement property because it avoids the problem that most lenders have when lending to a title holder (the accommodator) who is different from the mortgagor.
It also works well when immediate acquisition is necessary because of management problems. In this case, the exchanger must execute a deed of trust or mortgage to obtain title to the replacement property immediately by facilitating the replacement of part of an active business when an exchanger wants full control immediately.
When replacement property may present an Environmental Protection Agency (EPA) concern (e.g., a parcel containing a gasoline station), EPA certification is required before the property can be transferred to the exchanger. This can cause serious delays in the property closing by relieving the accommodator of assuming the unwanted responsibility of taking title to a property that may have EPA related problems.
Exchanging Last
Exchanging last is the basic, and most often used, method of doing a reverse exchange. When this method is used, your client uses an accommodator to hold title to replacement property until the relinquished property closes. There are some good reasons to stick with this fundamental approach.
Exchanging last works well when your client finds that special property and needs to get it off the market before relinquishing the property he or she already owns. The accommodator can form a Limited Liability Company (LLC) to actually hold title. This measure protects your client’s investment as well as the accommodator from liability issues involving other properties the accommodator is currently holding.
This method is also a good one to use when your client elects to “build to suit.” Construction completed on a replacement property during the period when it is held by the accommodator will qualify as like-kind property.
Another good time to exchange last is when the replacement property will not fully defer the gain realized from the relinquished property. The property your client buys may need work to be ready for his or her investment purposes. There may be renovations that will increase the value of the property that can be included in the transfer value when the accommodator transfers the property to the exchanger.
If the exchanger is not certain which of several potential properties will be relinquished to complete the exchange, the exchange-last procedure allows the exchanger to identify three properties (and possibly more) as possibilities to be the relinquished property.
The process of exchanging properties is straightforward but precise. If every requirement is not met, the exchange may be damaged, allowing the IRS to declare that a sale and a purchase have taken place. You should focus on bringing your clients together with a qualified intermediary who will guide the process.
Remember, those who offer 1031 exchanges and 1031 reverse exchanges to their clients position themselves to benefit in two ways: assist their clients in achieving the highest-quality transaction in the management of their growth investments, and begin the search for replacement property.
Bettye J. Matthews, CPA, and Warren R. Matthews, are principals of Florida Real Estate Exchange Connection Inc. (FREEC) in Naples. Ms. Matthews has been a certified Public Accountant since 1982 and is currently licensed in Florida and Maryland. Mr. Matthews is a licensed Realtor who provides business-development and client services.
© 2002 FLORIDA ASSOCIATION OF REALTORS
Most real estate professionals know the benefits of using a 1031 like-kind exchange: Exchanges offer a value-added service to their clients that is often underused, and real estate professionals who offer them are all but certain to represent their clients in the search for the replacement property.
Now there’s a new option: the 1031 reverse exchange. The reverse exchange is a mirror image of a forward exchange, and the same timeframe applies. In a forward exchange, the exchanger (taxpayer) sells a property, then buys a replacement within six months. In a reverse exchange, the exchanger (taxpayer) buys new property first, then sells previously owned property within six months. The key is that an exchanger has only one property in his name at any one time.
A like-kind exchange is simply a way to exchange property and defer taxes. In 1991, a prescribed method for executing delayed tax-deferred exchanges of investment properties was developed and made part of the regulations by the Internal Revenue Service (IRS). This section of the tax code (IRC 1031) clarified the rules and opened doors of opportunity for investors.
The IRS introduced regulations into Section 1031 that allowed the delayed exchange of investment property through the use of a qualified intermediary. These regulations created a clearly defined process for trading property without losing any equity to income taxation.
The true power of exchanging is the ability to meet investment objectives without losing equity to taxation.
Facilitating Your Exchange
A benchmark requirement for the 1031 exchange process is that “qualified intermediaries” must be used to facilitate all transactions associated with an exchange. Qualified intermediaries are not allowed to act as an agent to any party of an exchange. They must also be certain they have not acted as such for at least two years prior to the exchange.
For this reason, real estate professionals should not be concerned about losing their client to an intermediary. The intermediary works for both the real estate professional and his or her client and is bound by U.S. Treasury regulations. All intermediary fees are paid by the exchanger at closing. Often, interest earned by escrowed funds provides earnings for the exchanger that could exceed the entire cost of the exchange.
With few exceptions, the following are considered “disqualified parties” (disqualified from acting as an intermediary) by U.S. Treasury regulations:
1. Close family members, controlled corporations, partnerships or trusts in which the person desiring the exchange has a 10 percent or greater interest.
2. Agents of the investor such as:
a. An employee
b. Closing/Escrow officer
c. Attorney or accountant
d. Investment banker/broker
e. Real estate salesperson/broker
Reverse Exchanges
Up to now, most reverse 1031 exchanges have been viewed as a problem because of the lack of a standard procedure and the high probability of audit. In September 2000, the IRS issued new provisions creating a “safe harbor” that makes it easier to take advantage of “reverse” tax-deferred exchanges.
The new provisions created specific procedures that, if followed precisely, will not be challenged by the IRS. But, some complications remain for the real estate investor, including lender problems and excessive recording expenses. Lenders don’t want to make loans where accommodators will be relieved of responsibility when the title of property, traded in a reverse exchange, is transferred to the exchanger.
And, exchangers are hit with paying double for doc stamps — once when the replacement property is purchased and transferred to the accommodator representing the exchanger (buyer), and again when the exchanger’s relinquished property closes and the title to the replacement property is transferred from accommodator to exchanger.
So, Why a Reverse Exchange?
If you understand emerging strategies for managing these complications, you can stand above your peers when it comes to providing a quality service for your clients. Why would exchangers want to enter into a reverse exchange in the first place?
We’ll tell you: Suppose you find that perfect investment property for your clients but they haven’t yet contracted to sell their relinquished property. As a real estate professional, you know that perfect investment property will be off the market soon. So, you suggest a reverse 1031 exchange and involve a qualified exchange intermediary/accommodator. By using a reverse 1031, your client can ensure that they will own that perfect investment property and still defer all taxes on the sale of their relinquished property so long as they meet the rules.
Navigating the Waters
There are still some choppy waters to be navigated in the “safe harbor,” but it can be done with the assistance of well-qualified accommodators who practice professionally within the U.S. Treasury regulations.
Here is the process for reverse exchanges:
1. Help the exchanger (your client) begin the process by helping him or her enter into a sales contract with a seller for the replacement (new) property.
2. Recommend a qualified intermediary/accommodator to your client. The accommodation agreement will be between your client and the accommodator. The accommodator will normally prepare all documents, make all assignments of contracts (sale and purchase) and notifications, hold deeds in trust, provide detailed instructions for closing officers and disburse all funds.
3. Help the exchanger find a buyer for the property to be relinquished. Usually the exchanger already knows what property will be relinquished. However, if he or she has several potential properties he or she might wish to see he or she will need to identify the property (s) to the accommodator within 45 days of the close on the replacement property.
4. Help the exchanger sell his or her property by entering into a contract to sell the relinquished property and close on the sale that property within 180 days of the closing of the purchase of the replacement property.
Some exchanges can be very complicated. Reverse exchanges are more complicated than a straight 1031 exchange, and if renovations or improvements are required, the procedure can become tedious.
Two Options for Reverse Exchanges
When using a reverse 1031 exchange, you have two options —exchange first or exchange last.
Exchanging First
Exchanging first simply charts another course around some of the obstacles that remain in the “safe harbor.” You face these difficulties every day working in a buyer/seller environment where success is measured in dollars and days.
When exchanging first, the exchanger deeds the relinquished property to the intermediary/accommodator as the first step in the transaction. When this is done, the exchanger is free to shop, buy and close on whatever real estate he or she desires without the obligation to relinquish before replacing.
As with a typical 1031 exchange, your client must still identify the replacement property within 45 days and close within 180 days of the date on which the first property was relinquished to the accommodator.
Exchanging first works particularly well when the exchanger must secure a loan with a deed of trust or mortgage in order to close on the replacement property because it avoids the problem that most lenders have when lending to a title holder (the accommodator) who is different from the mortgagor.
It also works well when immediate acquisition is necessary because of management problems. In this case, the exchanger must execute a deed of trust or mortgage to obtain title to the replacement property immediately by facilitating the replacement of part of an active business when an exchanger wants full control immediately.
When replacement property may present an Environmental Protection Agency (EPA) concern (e.g., a parcel containing a gasoline station), EPA certification is required before the property can be transferred to the exchanger. This can cause serious delays in the property closing by relieving the accommodator of assuming the unwanted responsibility of taking title to a property that may have EPA related problems.
Exchanging Last
Exchanging last is the basic, and most often used, method of doing a reverse exchange. When this method is used, your client uses an accommodator to hold title to replacement property until the relinquished property closes. There are some good reasons to stick with this fundamental approach.
Exchanging last works well when your client finds that special property and needs to get it off the market before relinquishing the property he or she already owns. The accommodator can form a Limited Liability Company (LLC) to actually hold title. This measure protects your client’s investment as well as the accommodator from liability issues involving other properties the accommodator is currently holding.
This method is also a good one to use when your client elects to “build to suit.” Construction completed on a replacement property during the period when it is held by the accommodator will qualify as like-kind property.
Another good time to exchange last is when the replacement property will not fully defer the gain realized from the relinquished property. The property your client buys may need work to be ready for his or her investment purposes. There may be renovations that will increase the value of the property that can be included in the transfer value when the accommodator transfers the property to the exchanger.
If the exchanger is not certain which of several potential properties will be relinquished to complete the exchange, the exchange-last procedure allows the exchanger to identify three properties (and possibly more) as possibilities to be the relinquished property.
The process of exchanging properties is straightforward but precise. If every requirement is not met, the exchange may be damaged, allowing the IRS to declare that a sale and a purchase have taken place. You should focus on bringing your clients together with a qualified intermediary who will guide the process.
Remember, those who offer 1031 exchanges and 1031 reverse exchanges to their clients position themselves to benefit in two ways: assist their clients in achieving the highest-quality transaction in the management of their growth investments, and begin the search for replacement property.
Bettye J. Matthews, CPA, and Warren R. Matthews, are principals of Florida Real Estate Exchange Connection Inc. (FREEC) in Naples. Ms. Matthews has been a certified Public Accountant since 1982 and is currently licensed in Florida and Maryland. Mr. Matthews is a licensed Realtor who provides business-development and client services.
© 2002 FLORIDA ASSOCIATION OF REALTORS
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