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Archive for the 'The Real Estate Process-How Does this work?' Category
Save HUGE amounts of money on your Property Taxes!
In a post I wrote some time ago, I talked about Amendment One or Property Tax Portability. In a time of sagging real estate prices, there continues to be some GOOD NEWS in Real Estate.
If you have lived in your home for a long time (let’s say 10 years or more), there is likely a difference between the assessed and market values of your home due to the Save Our Homes Amendment (Amendment 10) which has limited the increase in the assessed value of your home to 3% or the CPI (whichever is less) since it was passed in 1992.
If you are one of the lucky people who has benefitted from this difference in value (referred to as deferred value), when you SELL, you can carry or “port” this difference with you to a new homestead in the state of Florida.
Effective as of January 2008, Amendment One was intended to “unlock” the real estate market and enable people who had been in their homes a long time and who had accumulated substantial property tax savings to take it with them or “port” it to a new homestead so they could sell but continue to enjoy lower property taxes.
I recently had the pleasure of working with a customer who had accumulated the maximum allowable port ($500K) who was able to apply that amount to a new residence and realize SUBSTANTIAL savings on their property tax bill. The customer did not know about Property tax portability and was, of course, DELIGHTED to learn about this amazing benefit! Click here for a table with examples of how Portability works.
It pays to work with realtors who know not only the latest statistics of the market but also other facets of the market that can save you money!
What is an Appraisal/ Appraisal Review?
Appraisal Clipboard
Unless a buyer is paying cash for a home, they must obtain a loan. With the real estate meltdown, banks are being ultra cautious about who they are lending money to and how much they will lend.
Recently, we had two homes under contract (this means that both buyer and seller have agreed to a sales price) and the “file” was sent to the bank to begin the financing process.
One of the most important pieces of this process is an appraisal of the property. Due to new regulations, bankers must call a “third party” group to order an appraisal. They used to be able to speak directly with appraisers but this is now prohibited. It’s common knowledge that real estate is very local and sometimes, values vary widely on a street by street basis. The problem with the new system is that appraisals are often conducted by people who aren’t famililar with the community they’re doing an appraisal in. They don’t have access to the local area knowledge that often adds “intangible” value to a home or neighborhood.
As a result, many homes don’t appraise for the agreed upon purchase price. When this happens, either the seller must reduce the price to the appraised value or the buyer must agree to bring the difference between the appraised price and the agreed upon sales price to closing in cash — or, the two parties can re-negotiate where the seller comes down a little and the buyer brings some cash to the closing.
In two recent transactions that we had, the property did appraise for the purchase price, but at the 11th hour, the bank sent the file back to underwriting for an appraisal review — one of these was ordered less than 24 hours before closing and held up the sale by almost a week. In the other case, the underwriter requested that the appraiser justify why he didn’t use some particular home sales in his property analysis. This led the appraiser to go back out into the “field”, photograph the homes that were not used and explain why they weren’t used. The net result was that the underwriter accepted the appraiser’s comments and we’ve been approved to move toward closing. So, both transactions had happy endings but with a lot of angst along the way!
Throughout a real estate transaction, there are many pieces of the puzzle that must be assembled and it’s important that you choose seasoned realtors who know how to maneuver through the many hurdles that will come up. Allison Steilberg and Caroline Powell of The Avondale A Team in Jacksonville,FL can (and do) provide just such expertise. If you have questions, please feel free to call us — we’ve love to help!
They need to determine if the price that the buyer has agreed to pay is, in fact, fair market value and the appraisal is supposed to
Cheap Money! Get Yours NOW!
This offer ends soon ( you must make a loan application by May 31st, 2010) so act quickly!
Jacksonville, FL based Gibraltar Mortgage, an affiliate of Wells Fargo Mortgage, recently announced a program where they will buy down the interest rate of your FHA or VA 30 Year Fixed mortgage by 1% for the first year for FREE.
FHA loans are available to all buyers purchasing a primary residence assuming they don’t currently have an FHA loan. Loan limits for the surrounding areas is $387,500.
VA loans are for current or former members of the military, national guard or reserves. There are qualifying parameters based on the veteran’s participation. The VA loan limits for Duval, Clay and Saint Johns County are based off conforming loan limits of $417,000 pursuant to the veteran’s remaining eligibility.
Thanks for reading. We write primarily about the state of real estate in Avondale, Ortega and Riverside. We’d love to have you subscribe so you can hear about the latest news for the area — new listings, recent sales, price reductions, mortgage news and more!
The Importance of Communication in a Real Estate Relationship
Do you ever see a friend in the grocery store that you’ve been meaning to call and just haven’t gotten around to it? You feel TERRIBLE and want that friend to know that you REALLY have been thinking about them. You’ve MEANT to call almost every day but by the time you remember to call, the day is almost over and it just didn’t happen.
Unfortunately, the life of a realtor is often the same. We mean to call each and every one of our buyers and sellers every day. The truth is that we DO think about you all the time. Almost every day we say, we REALLY need to call (….). But in the interim, life happens. Busy with getting a new listing photographed, negotiating a offer on a listing, attending an inspection, creating a flyer for your open house on Sunday, researching what the proper price of the house you want might be, searching through active listings for what we’re going to show you or calling to schedule showing appointments keep us from sittting down to check in and just say hello.
The realtor is the middle man. It’s through us that you learn “what’s going on”. How did the showing go? What did the buyer think of my house? Do you think I’ll get an offer? Have you seen anything new on the market? What do you think we should offer on this house that we love? We’ve received an offer way below our asking price — should we make a counter-offer or just not respond? Have you heard anything from the bank on our short sale offer?
Despite knowing that the MOST important thing we can do is STAY IN TOUCH, it’s one thing that can be the most difficult to do. Please know that even if you don’t hear from us, we ARE thinking of you nearly every minute of every day — REALLY. And…..if we don’t call you — CALL US! We love to hear from you. Thanks!
Thanks for reading! If you like what you see, please subscribe so that our posts will be sent directly to your inbox. We write primarily about the state of real estate in Avondale, Ortega and Riverside.
Pick(s) of the Week – Best Bungalow Buys!
3316 Knight Street
The first Tuesday of every month, realtors in Jacksonville’s neighborhoods of Avondale, Ortega and Riverside go look at LOTS of open houses — it’s called Neighborhood Caravan. I set out to pick a “favorite” from the caravan and write a blog about it, but after reviewing the list, I decided to write about two houses that have been on the market for a long time instead. Why? Because I think they are great deals!
The first house is at 3316 Knight Street. I suppose the reason it hasn’t sold is that it’s only got two bedrooms. But…it’s been nicely renovated with new roof, ac, appliances, kitchen, bathrooms and wood floors. It’s on a great low traffic street in Avondale, it’s got an open floorplan, two full bathrooms (which is a big plus in the Avondale bungalow market) and a very large backyard which would allow the addition of a third bedroom if one ever wanted to do that. It’s got 2br/2ba, 1568 SF and the lot is 60 x 120. Priced at $274,900, it’s at $175 per square foot. If you’re interested, please give me a call.
3914 Baltic Street
The second house is at 3914 Baltic Street in Ortega and I must say I’m surprised at why this house has not sold. I can’t say I’m a fan of the green interior paint colors the owner has selected but can this possibly be the reason people won’t buy it? It’s got a lot of space (1,900 sf), 3br’s and 2ba’s in the front part of the house and a large master suite with bath in the back part of the house. It’s got nice curb appeal and is in a great location. The lot is large at 100 x 125. Priced at only $278,900, it’s only $146 per square foot. Interested? Call me and we can go take a look.
Thanks for reading. Please join me for my next adventure in the Avondale, Ortega and Riverside real estate markets!
How a Realtor Gets Paid — The Nuts and Bolts
I had a conversation today with someone who is NOT thinking of buying or selling. At some point, we talked about the commission a realtor gets paid and he said “Give me a break! My realtor spent all of 3 hours with me combined in our entire transaction and got a HUGE paycheck”! This perception of the fact that we realtors are all driving around in our Mercedes Benz’s throwing dollar bills out the window deserves a little attention.
Most realtors charge between 6 and 7% commission. The listing realtor (the one whose sign is in your yard) and the selling agent (the one who represents the buyer) each get half (3% each). The average real estate transaction is about $200K which at 6% commission is $12,000 or $6,000 for each realtor.
Out of the $6,000, the realtor must pay the broker a “split”. In most agencies, the realtor gets around 70% and the broker gets 30% which in this scenario $4,200 for the realtor and $1,800 for the broker.
Out of that $4,200, the realtor pays ALL of their own marketing expenses. This includes all ads, photography for our listings (we use and pay for professional photography), postcards, postage for postcards, online advertising (including realtor.com, trulia.com, zillow.com, etc…) and dues including membership in the MLS (multiple listing service) & NEFAR (NorthEast Florida Association of Realtors).
Realtors spend many, many hours on the phone talking with homeowners, prospective buyers and other realtors. They hold open houses, place signs out for open houses (and then pick them back up), attend showings, follow up with showings, call realtors to get feedback, negotiate contracts (once at the beginning of a deal and often a second time after inspections), coordinate the transaction with the closing or title company, the mortgage company, attend inspections, go to closing, buy closing gifts, prospect for new business, develop budgets and marketing strategies, place ads in local publications, etc… The list goes on and on.
Realtors are also condsidered independent contractors which means that we pay both employer and employee taxes AND we pay for our own health insurance. Perhaps even more important than all of the expenses is the fact that a realtor only gets paid if someone buys (or sells). We show lots of houses to people that never buy and not every listing we take sells.
The average realtor is involved in 6-8 transactions per year. So, the next time you think you’re realtor is overpaid, ask how much he/she made last year. I bet you’ll be surprised. Hopefully you can see that with all that’s involved, most realtors are not getting rich. Just like in any profession (superstar athletes, surgeons, businessmen, actors, etc…) there are a few MEGA producers that do make a lot of money — but they’ve served their time of lost holidays, weekends and evenings on their way to the top. 
A final point to consider is that when you bought your house, you didn’t pay ANY commission at all – the seller paid it. So, if you’re getting ready to sell and dreading the thought of paying a commission, try to remember all the times that you got the services of a realtor for free!
There seems to be the perception out there that realtors don’t do much and get paid a lot. I hope after reading this that you’ll see things a little differently. If you’re interested, I copied an article from the internet on the subject — click here to read it.
Thanks for reading — if you’d like more information about houses for sale in Jacksonville (or thinking or selling yours) in the Avondale, Ortega or Riverside neighborhoods of Jacksonville, I’d love to share my local area knowledge with you!
Extra, Extra….Read All About It!
In case you’re wondering who has the latest and greatest news — it’s often a realtor who specializes in your local area market. I often know about a house that’s getting ready to come on the market, a house whose price is getting ready to be reduced or about programs that lenders are getting ready to roll out that could save you a lot of money.
You might say that I have a lot of insider information. So…if you’re the kind of person who likes to know about it before it happens, then give me a call and I’ll be certain that as soon as I know it, you will too!
If you’re a loyal reader of mine (which I hope you are!) then you’ll know that I specialize in the Avondale, Ortega and Riverside neighborhoods of Jacksonville. Please join me for my next adventure in these very special neighborhoods of Jacksonville!
FREE MONEY – Get Some Now!
FREE MONEY
If you are a first time home buyer, I cannot imagine a better time to buy a house! First, there’s the $8,000 tax credit. This expires at the end of November 2009, so you will need to move quickly if you want to take advantage of this fantastic FREE MONEY.
AMAZINGLY LOW INTEREST RATES
Save even more money with government loans ( like FHA loans) because they require very small down payments — only 3.5% of the purchase price and now have interest rates below 4% — yes, you heard me 4%!!! This rate is for a five year adjustable rate that will then increase only 1% per year thereafter. Since national home statistics show that the average person moves every seven years, then you would only be at 6% in your SEVENTH year of ownership.
LOW PRICES
If you’ve had a chance to read any of my Monday morning market memo’s, you’ve seen that there are huge numbers of price reductions each and every week. Sellers are finally realizing that the only way to “move” their properties is to reduce the price(often multiple times). I’ve seen cases many times where sellers take reduction after reduction and nothing happens. Then, when they hit that “magic” number, the market takes notice and offers start flying in.
To see homes in Avondale, Ortega and Riverside $250,000 and below, click here!
So, if you or anyone you know is considering home ownership — it’s time to jump in! Thanks for reading.
The DANGER of Pricing Your Home too High – “Just to See What Happens”
It’s been a soft market, today’s buyers are super savvy and there is loads of data available to the public. Everyone knows what the house down the street sold for and it’s no secret that your house is overpriced in comparison.
There’s a term that realtors use called “trailing the market down” which means that if a person prices a home too high in the beginning, they miss the “prime window” that a new listing has to attract buyers. In a declining market, as we’ve had in the last few years, by the time the seller has agreed to reduce the price, the market has fallen more and, once again, the seller’s (reduced price) is too high. Thus the term, trailing the market down.
If you really want to sell, you must price your house to be competitive with (or below) the other homes listed for sale. Let’s face it, there are a lot to choose from and you’ve got to find a way to make yours stand out. In addition to having a great price, everything has to be in tip top shape. Clean, organized, de-cluttered and nice landscaping are essential. You cannot sell a place that appears to have deferred maintenance ( a realtor’s term for peeling paint, burned out light bulbs, air conditioning grills caked with dust, unsightly clutter and grass that hasn’t been mowed).
If the house is priced too high, buyers know it immediately! They’ve been out there looking and they can sniff out a good deal like a bloodhound! They’re equally good at spotting an overpriced house and will avoid it like the plague. So, do yourself a favor and listen to what we’re telling you. If you overprice your home, you’ll only get in your own way and your house WILL NOT SELL! Trust us….we know.
Thanks for reading. If you like what you see, we’d love for you to subscribe so you’ll get our posts directly to your inbox. If you or anyone you know is thinking of buying or selling in the Jacksonville area, we’d love to have the referrral. Our email address is steilberg@comcast.net or you can give us a call at 904-252-5181. Thanks!
Just Exactly What Is Property Tax Portability?
We all love saving money — right? If you have lived in your home for a long time and it has been declared as your primary residence (homestead), you will love hearing about how much money you can save if you sell that home and move to another one with the property tax portability feature! The savings can be HUGE!
Take a look at your property tax statement that you just received and you’ll see a Market Value figure and an Assessed Value figure. To determine what you would “port” or carry with you, subtract the assessed value from the market value.
For example, if your market value is $500K and your assessed value is $300K, then you can “port” or carry the difference of $200K with you. In order to port the entire $200K the next home you purchase must be of greater value than the home you sell.
An Example:
New Home You Are Buying: $550K
– Accumulated Property Tax Savings: $200K
Property taxes on new home will be calculated based on $350K
In addition, the property taxes on your new homestead will also be capped with the Save Our Homes feature and you will also be eligible to take deductions for homestead.
If you are downsizing to a home that costs less than the one you’ve just sold, you are still eligible to port your accumulated property tax savings but the calculation is done differently and is a bit more complicated. Call me at 904-252-5181 or send me an email at steilberg@comcast.net for an explanation of how this works.
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