People not Paychecks.

I saw a Facebook post a colleague made this morning.  He said, “My day started out great and ended with a real estate nightmare. Sleepless night and hoping that today is a better day. Real estate isn’t for the faint of heart.”

He’s right, real estate isn’t for the faint of heart.  Things can change on a dime.  At a moment’s notice sellers and buyers can go from carefree and feeling fine to wondering if they have to unpack and start from scratch – or worse.

The response that prompted me to right this blog post was this, “Keep telling yourself… it is only a house , it is only a house…”  True, it is only a house.  It’s the lives attached to the house are what keep a Realtor up all night, tossing and turning, concerned for a clients’ well being.

I have had buyers’ on the brink of homelessness at the possibility of a deal falling through.  I have seen family members heart broken at the sale of a long loved family home filled with memories.  I have seen buyers break down and cry over the stresses of daily life compounded with a home search/purchase/lender demands for documentation.

Real estate is not cut and dry.  Combine one of the largest purchases and sales of a person’s life with the emotional attachment/drain such a transaction can make, and a real estate purchase/sale can be one of the most emotionally challenging events of a persons life (next to marriage/birth/death).  If a transaction has bumps along the way, those emotions compound.

Many agents find themselves wearing many hats – including counselor.  We are attached to our clients.  We care about them and the outcome of the transaction.  Not for the paycheck – for the people.  We understand the heavy burden we chose to carry.  We understand how important home ownership – having a roof over your head is.  We care about you and are working towards your success.  It’s not about the mighty dollar, and those who think it is, are sorely mistaken.

We do our best, often time going above and beyond, to “fix” situations that are beyond our control, we offer alternatives and advise that may not be apparent, we work hard to ensure our clients are taken care of and their best interests met.  Are there some bad apples, yes.  Every field has them.  But if you ask me, most Realtors care about their clients.  They want them to be happy.  They want their dreams to come true and they will do everything in their power to make that happen, even, no especially, when the chips are down.

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Costs involved in Selling a Home

When you are ready to sell and talking with a REALTOR about listing the house, s/he should include the estimated cost involved in selling at the listing appointment. What I typically do is provide a breakdown at 3 or 4 different price points from projected sale price to worst case scenario. To date, my sellers have never been confronted with a worst case scenario net, but I believe it’s important to include that information up front since we should all work towards the best while being prepared for the worst.

Knowing these costs up front helps in preventing any surprises down the line. Real estate transactions are delicate matters. Scenarios can change from day to day based on inspection results, appraisal results, buyer financing, lender productivity and more. Eliminating surprises should be a priority for an experienced agent. Surprises in day to day life can be exciting and fun. Surprises in real estate transactions typically are not.

Educating a seller on the costs to sell up front is one of the steps I take to eliminate surprise. Imagine going through the process of selling and reviewing the settlement statement (HUD) 30-45 days after entering into a contract and learning you are walking away with less than you anticipated. That’s not a fun surprise by any means. That is why it is important to know these numbers at the time of listing.

Since I believe knowledge is power and in educating sellers and buyers, I am going to share these costs with you.

Cost to sell a home in Central Florida are as follows:

Real Estate Commission this is what you and your agent agree upon. The commission is typically shared evenly between the listing brokerage and the selling/buyer’s brokerage.

Documentary stamps on the deed. This seller cost is based on the sales price. It is calculated at 70 cents per one hundred dollars. Example: Sale price of $250,000 = $1750 in doc stamps on the deed. (250000 x .007)

Taxes are pro-rated. (If your taxes and insurance are escrowed into your mortgage, those escrows will be returned to you by your lender once the mortgage is paid (satisfied) – typically 45-60 days after closing.) In Florida, taxes are paid in arrears. Tax bills for the current year come due in November of that same year. At closing the taxes are pro-rated to reflect this; a seller will give the buyer a credit towards taxes for the number of days the seller had ownership in the house. Example – 2015 taxes total $1800. Property sells on May 1, 2015. Tax bill comes due on November 2015. Seller gives buyer a credit of $600 for January-April 2015. Buyer pays the entire tax bill when it comes due.

Owner Title Insurance and fees are also a cost in the transaction. In this region, the seller pays for and conveys clear title to the buyer. The cost of insurance is based on the sale price of the property. If a seller is selling a home that was owned for 3 years or less, a re-issuance credit may be available. The chart below shows title insurance fees without any credit being given.

Courtesy Metes & Bounds Title Co.
Courtesy Metes & Bounds Title Co.

Title fees vary from company to company and include costs for title search, lien search, recording fees, government fees and the settlement fee.  As a rule of thumb, I quote $725 for title fees.

Home Owner Association (HOA) dues is another item that is pro-rated. In order for the dues to be properly pro-rated, the title company must order an estoppel letter from the HOA. The estoppel letter shows what the seller has paid for HOA dues to date, any outstanding balance or fines, etc. HOA’s charge for this estoppel. These charges vary and generally run between $50-$500. I have seen them to be $150 on average.

And those are the standard costs of selling a home.

Simplified it is as follows:

$250,000 Sale Price
Commission                                                                       $X
Taxes $1800/yr (pro-rated: estimated closing 5/1/15)   $600
Doc stamps on deed (.70 per $100)                               $1750
Title Fees ($725) & Insurance ($1325)                           $2050
Cost to sell                                                             $4400 plus X***

***HOA estoppel fees (cost for payoff from HOA to title co.) generally run between $50-$500. I have seen them to be $150 on average. This cost has not been included in the cost to sell calculated above as the exact amount of the estoppel fee for your HOA is not known.

Calculating the cost to sell is not especially tricky. As I mentioned previously, any agent you interview should have these numbers available and should be providing these figures to you at the initial meeting. If s/he is not, then you are not getting the full picture. Hopefully, I have made these costs clear and easy to calculate. If you have any questions regarding the cost to sell, feel free to get in touch with me. I’d be glad to assist in any way I can.

Real Estate News and Reality

The Central Florida market has been on fire. Lenders, appraisers and Realtors® are busy, busy, busy. Year over year statistics are impressive.

Right now, the Orlando area market appears to be pretty stable. Month- over- month prices are increasing gradually and at a healthy pace, inventory of homes for sale has increased considerably in the past 2 years, and buyer traffic is steady. On the whole, we in the Orlando area are in a stable market.

On a national level, I hear and see news about prices skyrocketing and concerns of another bubble. I had those concerns a while back myself. Our market righted itself though, and I suspect other markets throughout the U.S. will follow; this has been the trend since the market crash and recovery – hardest hit states are where the trends start and the rest of the U.S. follows in time.

It’s hard to ignore the news, especially in the age of connectivity we are in. If you’re in the market to buy or sell a home, the best thing you can do is ignore the news.  Instead, examine local data. Better yet, save yourself from data overload. Find a Realtor® that is in tune with the data, knows how to interpret it, and has the know how to sort the facts from the fluff. This is a world of T.M.I (too much information). There are a number of factors to consider when working to determine where the market is going and where values are, and real estate is truly local – in some cases hyper local. Values can and will vary from town to town and even from neighborhood to neighborhood. Finding an agent that will be honest with you about your market and where you stand in it is crucial, and is likely to save you time, money and stress in the long run.

Home Buyers: How to Win in a Multiple Offer Situation.

It’s a great time to buy real estate — really.  I know the real estate world was touting that line in their marketing campaigns a couple year back as prices were plummeting and tax credits were being offered to first time home buyers.  I didn’t really buy into it then.  I truly believe it is a great time to buy now.  I’m confident we have seen the bottom of the real estate market and are well into the beginning stage of recovery.

It’s ideal to buy as prices are going up, and with interest rates hanging in the 3s, now is a great time to grab a piece of the pie.market on fire

There are challenges in purchasing in today’s market.  With inventory low and demand high, multiple offers are common place – especially in the Orlando area market.  On top of that, cash is king and as of late nearly half of all real estate sales were cash deals

What does that mean for the average buyer, dependent on financing, and ready to buy?  It means be ready to act, swiftly and with precision.  It means stay positive and keep in mind that everything happens for a reason. It is possible for a first time buyer to beat out the hedge funds, investors and others with deep pockets.  It may take a little more time and the possibility of being out bid a couple of times before securing a home exist.  (This is where staying positive and knowing everything happens for a reason comes into play.  If the winning bid wasn’t yours, then there is a reason that house was not meant to be.  I am a strong believer in this and have seen this theory proven first hand time and again.)

I have had a number of buyers beat out cash offers – strong cash offers.  It is being done, and I am about to tell you how.

First and foremost, make your first offer your strongest offer.  Agents are not required to Lisa Jones Sale Pending Orlando-001disclose whether a property has multiple offers on it.  Don’t assume yours is the only offer, and don’t assume you will be given an opportunity to negotiate.  It’s quite possible you will not be given the chance.

Often times I have seen buyers disappointed that their offer was not the winning offer.  I have heard the phrases, “I should have gone up $5000” more times than I would like to count.  Honestly, $5000 in the grand scheme of things will not make a whole lot of difference in a mortgage payment (maybe $20- $30).  It could make the difference between an offer being accepted or rejected.  Knowing you gave your all should provide comfort if your bid is not the winning bid.  This was you know you gave your best and don’t keep yourself awake at night wondering “what if” or “would’ve should’ve could’ve.”

Strongest offers also include things like strong escrow.  Your good faith deposit needs to be attractive.  (1-2% of the purchase price is customary in the Orlando area market).  Putting $500 or $1000 down on a $100,000 purchase does not say “I am a serious buyer” to a seller.  Putting $3000-$5000 down speaks a little louder.  (Keep in mind this good faith deposit, your escrow, will be applied to your down payment and closing costs.  It is all going towards your cost to purchase anyway.)

Strongest offers also include things like reasonable closing times.  If the house is vacant, the seller will likely want to close as soon as possible.  If it is a short sale, you have a better chance of the offer being accepted if you agree to wait for short sale approval for an extended period of time, say 100-120 days instead of the customary 60-90.  If the house is occupied and it is a traditional sale, try to find out how much time the seller would like to close.  If you aren’t able but notice there is a lot of stuff in the house, giving 60 days to close 16019 arrowheadcould make the difference since the idea of packing up an entire household in 15-30 days could be a little nerve racking for a seller.  Not everyone likes the idea of a quick close.  Tailor your closing date accordingly.

Strongest offers also include few contingencies or short contingency time lines.  When writing an offer, the less you ask for, the more attractive your offer is.  Get inspections out of the way in 7-10 days.  Do not ask for a Home Warranty just because you can.  Do not ask for the seller to contribute to your closing costs if you don’t need the help.  If you do need the help, don’t ask for more than is necessary.   Keep it simple, keep it clean.

Another way for buyers needing financing to find success in today’s market is to seek out homes where owner-occupants have the first right to purchase.  Being able to cut a big chunk of the competition out of the game is definitely a plus.  Homes with First Look Initiatives and Neighborhood Stabilization Programs (NSP) give owner-occupants (not investors) the first right to purchase within a certain time frame – usually the first week or 2 the property is on the market.  Often times, these homes are in good shape and move in ready.  Granted there will likely still be competition; not nearly as much at there would be if investors were able to bid.

Lisa Jones Realtor at Keller Williams Sells HomesLastly, be prepared to pay a little more than market value.  I would never counsel a client to pay an outrageous amount over market value.  Sometimes the need arises to pay a couple/few thousand more than appraised value.  If you love the house and have the ability to do it, do it.  Often times paying a little more now is worth the time and expense of having to start all over again in the home search (including paying for home inspections and appraisal.)

Allow yourself some wiggle room as well.  If you are qualified up to $150,000, you may want to limit your search to properties up to $130,000 to start.  This could give you the cushion you need to have a little more offering power.

In conclusion, multiple offers can be challenging.  Patience is required.  Having the ability to act fast when the right home is found is crucial.   He who hesitates often times loses in this market.  Be ready to act.  Get qualified with a lender before you look at houses.  Know your budget, keep it in mind.  Do not stretch yourself beyond your limits but be prepared to stretch for the right house.

Executive Vice President of Large & Influential Mortgage Holding Corporation says We Are Not Creating Another Housing Bubble. What Else Would You Expect Him to Say?

Rick Sharga, executive vice president with Carrington Mortgage Holdings, made the claim “we are not creating a bubble” during his keynote speech at the REOMAC 2013 Summit & Expo in Dallas on Monday.  (REOMAC stands for Real Estate Owned Managers Association of California).

Currently in the Orlando area, we are seeing a lack of inventory and a surplus of buyers.  Prices have been increasing steadily and bidding wars are all to common.  We are seeing a bubble in housing.  Is it as big as the Boom Bubble?  No.  Will the effects of this bubble burst be as hard felt as the Boom Bubble?  I doubt it.

I believe bank owned property holders and their affiliates as well as the federal government are contributing to this bubble.  Sellers with equity are as well, and to an extent I can’t blame any of the parties for doing it.

Sellers with equity are holding out to see where the market is heading.  Many “don’t have to sell” and can sit back and wait a little while to see where this market is going – with all assumptions that it will continue going up.  On a side note, I do caution these sellers that don’t have to sell but would really like to not to hold out too much longer.  One way or another, this mini boom will come to an end and the market will adjust accordingly.  Market On Fire

Bank owned property holders and their affiliates are contributing to and helping to create this bubble by keeping a stranglehold on inventory; releasing properties to the market at a trickle and pushing up prices.  I can attest to this as many others in our area can as well.

In just about any neighborhood in the Orlando area, you will find at least one home in a neighborhood that has been sitting vacant for a long time.  The house next door to mine has been owned by Bank of America since April 2010.  Bank of America has not made a single attempt to sell it in all that time.

This is fact around here, and it is kind of a shame when ready, willing and able buyers are out there putting strong bid after bid on homes only to be beat out by cash investors or stronger offers.  It is not accurate for Rick Sharga, executive vice president with Carrington Mortgage Holdings, to say that “we are not creating a bubble” when bank owned inventory (also known as REOs or foreclosure) is being trickled onto the market.

When one state out of 50 holds 16% of the distressed properties and there are 2.2 million units of shadow inventory lingering in our country, more needs to be done to resolve this matter.  Florida seems to be being used as a testing ground for what can and can’t be done by REO managers.  The small amount of bank owned inventory being released to the market is typically coming on 10-15% above current market value, and cash investors are pretty much paying it —- for now.

I can understand why the powers that be are doing it.  They do not want to flood the market like they did at the beginning of this mess and drive prices into the ground.  They want to help push prices up, and work their losses down.  But there is a happy medium somewhere.  It seems to me that big banks and corporations don’t understand the word moderation or believe in middle ground.

Banks are pushing this bubble – no matter how many times or how many ways they say they are not.

The Government is also contributing to this bubble by keeping interest rates low.  Chairman Ben Bernanke says he is going to keep rates low through 2014.

Do I understand why banks and the Fed are doing this?  Yes.  It makes sense.  Flooding the market and letting interest rates rise will not help us get through this.  Do I think the methods are a little extreme (and maybe even a bit greedy)?  Yes.  Give us a little more inventory to work with and work through.  Give more buyers, especially families dependent on financing, a chance.  I am for increasing values.  I would love for my home, and everyone else’s home, to be worth what it was in 2007.  Let’s get there a little more naturally though, and with a little more heart.  We have seen what artificially inflated prices has brought in the past.  Let’s not do that again any time soon.

My Favorite Home Sale to Date

This was quite possibly my favorite listing to date.  It wasn’t the biggest house I have ever sold or the most expensive, but it did have great character and personality.  (Yes, I believe a house can have personality.)  The house was refinished beautifully and the Lake Como location so convenient and quiet.

Here’s what I said about the house when I had it listed for sale:
Absolutely beautiful pool home located very close to downtown, the 408, excellent dining and shopping options & more. Do not miss out on this one. It needs nothing and has been masterfully renovated. Too many interior features to list — major items include: tumbled travertine flooring; hardwood flooring; Monte Carlos ceiling fans with remotes throughout; new air conditioning unit with duct work replaced in 2008; gutters added in 2010; newer roof; kitchen with Juparana Austral granite countertop, glass backsplash, black Maytag appliances, solid custom cabinets with extra deep cabinets, pull out shelving, pull out spice drawers w/ hidden electrical outlets, lazy Susan & more; master bedroom with motion sensor lighting in closets w/ organizers; master bath includes gorgeous frameless, glass shower dressed in travertine with a Grohe Thermostatic shower system with Kohler rain head, Porcher Veneto one piece toilet, Kehler Mersing vanity, mirrored Robern Vanity cabinet & more; spacious dining area w/ beautiful outdoor views; comfortable & inviting living room with Cat5 wiring for a media center. Exterior features include salt water lagoon style pool with pebble tech finish & color changing Led light system; pavered covered patio and sun deck; mature, lower maintenance tropical plants including the most beautiful bamboo; fenced yard w/ side gates; irrigation system on well and more.

16512 Spring Park Drive in Palisades

Golf Front home (6th fairway) on a cul-de-sac featuring: Oversized kitchen with center island, corian counters, ample cabinet space, breakfast bar, and all appliances; formal living and dining combination; tiled living area off kitchen; new carpeting throughout; separate den/office; ceiling fans; light fixtures; vaulted ceilings; triple split floor plan; French doors: covered and screened lanai; homework/bill pay nook; master bedroom with tray ceiling and separate entry to lanai; master bath with dual sinks, shower, water closet and garden tub; architectural accents throughout; 2 car garage with additional stall for your golf cart/bikes and side door entry; front lawn laid with zoysia and so much more. Community Features include: Chain of Lake access via Lake Minneola, Park, Playground, Fishing Pier, Boat Launch, Cable Included in HOA dues, Community Pool, Tennis and other recreation. Traditional Sale — less hassle