Archive for September, 2010

How Do I Know if the Florida Home I’m Renting is Safe from Foreclosure?

Wednesday, September 29th, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

How do you know that the home you’re renting is safe from foreclosure?

It’s pretty easy and it just takes a few minutes of searching on the internet. 

The first thing you’ll be looking to find out is if the property owner is behind on their taxes.  To do this you go to the tax collector’s site in your county.  Since we’re based here in St. Augustine, Florida, I’m going to use the St. Johns County site as an example (and I’ll include the links to Jacksonville and Duval County below). 

The St. Johns tax collector site is at  http://www.sjctax.us/ .  On the left menu bar click on “Search Property Tax Records.”  There will be a “Tax Search” menu at the bottom, click on “Physical Address.”  Then put in the address and press the “go” button to search.  This will bring the tax record up.

DelinqTax

Here's What a Delinquent Tax Record Looks Like

For this example I pulled the record on a property that I knew was delinquent.  The image to the left is what a delinquent tax record looks like, and it’s the first sign that the property you may want to rent is heading in foreclosure.

Believe it or not there are properties heading for foreclosure where the taxes are current, so the second place you want to head is the Clerk of Courts website to see if something called a “LIS PENDENS” has been filed against the property.

A “LIS PENDENS” tells you that a lender(s) have filed the paperwork to start the foreclosure process.  That doesn’t mean the property will be foreclosed on, but there’s a strong indication that the owner isn’t making the house payments.  Which means you could be paying rent to a person who is taking your money and not putting it back into the home.

Now, you could just go to the Clerk of Courts site first.  But in St. Johns County the Clerk’s site is very hard to navigate, so I go to the tax rolls first to get the property’s Tax Identification number and the owner’s name and address, which makes searching on the Clerk’s site much easier.

The Clerk of Courts site in St. Johns County can be found at http://www.clk.co.st-johns.fl.us/ .  Click on “Recording” on the left menu bar, then “Online Records Search,” then accept the disclaimer.

On the right hand side, put the owner’s name in the “Name” box, last name first, then hit “Search” and see what comes up.  If too many entries show up because its a common name, search again, but this time in the “Documents Type” box, hit the gray button to the right and scroll down looking for “(64) LIS PENDENS” to see if the property is in pre-foreclosure, and “(65) LIS PENDENS RELEASE” to see if the Lis Pendens is still in effect.

Here's what a Lis Pendens looks likeHere's what a Lis Pendens looks like

Here's what a Lis Pendens looks likeHere's what a Lis Pendens looks like

Here’s what came up on another property that I knew was in foreclosure.  A Lis Pendens was filed on this particular property in October of 2009, a year previous to this writing.  That means the foreclosure process has been underway for a year.  If you scroll down through the records and see anything that looks like “Final Judgment,” that means the house has been ordered to auction and foreclosure is iminent.

One more thing to consider: if you are renting in a subdivision where there is a homeowner’s association (HOA), as a renter you are required by (a new Florida) law to pay the HOA dues.  So if your landlord isn’t paying his taxes or mortgage, it will be on you.  If the HOA dues have been in arrears for awhile, the HOA may have filed a lein on the property, which should show up on the Clerk of Courts site along with the Lis Pendens.

So if you do a search and the taxes are unpaid, and there’s a Lis Pendens (which means the mortgage isn’t being paid), you can be pretty sure that the HOA dues are delinquent, too.  Just walk away from that property and never look back, if for no other reasons than the liability of the HOA dues, and again, the fact that your rent monies are not going toward the home you are living in in any way, shape or form. 

Lastly, another good resource in getting this information is your friendly neighborhood Realtor.  I have databases and resources that I can look into that can give me an even greater insight into the property, and faster.  So if you know a good Realtor, give him or her a call with your questions.

For Jacksonville and Duval County you can find the Clerk of Courts site at http://www.duvalclerk.com/ccWebsite/ and the Duval County Tax Collector at http://taxjax.com/default.aspx .  The search functions will be done differently on these sites, but remember you’re looking for “Lis Pendens” and “Final Judgment” at the Clerk’s site, and delinquent taxes on the tax site.

Homes for Sale in St. Augustine: I Did Not Show Your Home Because…

Saturday, September 25th, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

You have a home on the market but it’s barely getting shown, and you want to know why.  Well, here’s why:

  1. You have a beach condo on the market and there are just too few buyers that qualify for condos as a second home.  For example, there are 50 condos on the market and only 10 available buyers…no matter what happens 40 condos will fail to sell.  Want to win that game?  Be the best priced unit.  Don’t want to “give it away?”  Sweetheart, with the condo fees in some places no one can afford to take it.  Everything will sell with the right price and terms…if you’re not willing to go with the market get it off the market.
  2. Price your home with the market.  If you’re in a neighborhood that is especially cookie cutter in that the builder and build dates for most homes is/are the same, throw out the high and the low sales and price where most homes sold, either on the average sales price or price per square foot.  If you believe that crown molding adds a few thousand more in value you’ll still be staring at it while everyone else’s homes get shown and sold.
  3. As a Realtor if there is no lockbox and I have to pick up a key, your home isn’t getting shown.  There are too many other homes on the market that will meet my customer’s needs, trust me.  I don’t have time to run cross town, pick up a key, drive back, then do all the prep for my customers and show homes and then drop the key back off.  Time is money, friend, and your time just ran out. 

Here’s a few more that I picked up from a blog post by Gita Bantwal, a Realtor from suburban Philadelphia.  I’ll quote Gina here verbatim:

  • If the seller has to be there for all appointments and we are showing many homes we may be reluctant to put the home on the list of homes because we never know if we will be running late . We show the home if the buyer wants to see it and then try to put it first on the list.
  • If the instructions for appointments requires 24 hours notice and we have someone who wants to see on short notice, we do not show the home.

So, to recap:

Price the home right, have a lockbox, make it easy to show, don’t hang around when the buyers show up.  Do these things and your home will get shown.

Homes for Sale in St. Augustine: Can I Short Sell My Home to a Relative?

Wednesday, September 22nd, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

So you can’t make the payments on your home anymore, and the home is worth less than you paid for it, so you need to attempt a short sale (a short sale, in a nutshell, is where you try and sell a home for less than you owe on it, with the bank agreeing to take less).

So your brother or sister finds out that you’re having difficulty and wants to help out by purchasing your home at a short sale price.

Can you short sell your home to a relative?

No, you can’t. 

The reason is the “arms-length affadvit,” which we’ve seen on every short sale we’ve done in this office.  Here’s why:

“In a short sale transaction, an arms-length affidavit must be signed in order to ensure there is no relation from the seller to buyer,” said Realtor Caroline Choi on a recent post on Trulia. “As you can imagine, there has been a lot of fraud where buyers who are related to the seller purchase the house from him or her, and give it back at the bank’s loss. The arms-length affidavit is designed to prevent that sort of situation.”

Not only do the buyer and seller have to sign the arms-length affadavit, but the Realtors and/or agents have to sign it.  Every bank has their own arms-length form, and some forbid even the agents to be related to the buyer or seller.  In other words, the bank may want strangers all around.

Even if the the bank does all their due dilligence in accepting the short sale price by ordering BPOs (broker price opinions) and appraisals, the very fact that you are related to the buyer would raise red flags.  And were you to go ahead and lie on the arms-length form and sell it anyway, you and your relative could be guilty of fraud.

Most arms-length forms also stipulate that you, the seller, will not remain in the home after closing.

An alternative may be a loan modification with your bank.  However, from what our customers tell us, the banks make loan modification harder than a short sale.  In the stories we hear they will modify you payment, but to an amount higher than you are paying now.  Seriously.

So if you have to short sell the best thing to do is just put it on the market and sell it to a stranger.

Homes for Sale in St. Augustine: If I Don’t Use an Agent, Can I Save the Buyer Commission?

Monday, September 20th, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

If I don’t use a real estate agent can I save the buyer commission?

In the strictest sense, no.  In fact, if a home is listed in MLS you will have to use an agent.  If you don’t choose your own agent, by default it will be the listing agent.  

First, what commission is:

Commission is negotiated between the seller and the agent who lists the property.  In Florida commission is considered employment. 

Typically the listing agent advertises half the agreed upon commission to any agent who brings a buyer.  In other words, the listing agent is offering employment to any agent that brings the buyer.  By Florida law, only those licensed to sell real estate or who are a party to the transaction (i.e. buyer or seller) are allowed to receive any commission at the close.

As commission is an offer of an employment, any agent can decide for him or herself what an acceptable commission is.  If the agent feels that a commission is is too low on a property (in that the potential work is not worth the potential pay), the agent is under no legal, honorable or ethical obligation to show that property.  It would be the same if you were responding to “help wanted” ads and decided to decline a job offer because the pay was too low for your tastes.

So getting back to the original question, when you decide to buy a property the commission was decided before you ever entered the picture.  And it has already been figured into the bottom line.

This is especially true with new construction and foreclosures.  With a foreclosure the listing agent will keep the entire amount, and in new home construction the builder will keep the entire amount.

There are some real estate agents that will offer to rebate a few hundred dollars at closing in order to attract new business, but the sale still has to be profitable for them to do it (because if it is not profitable they will go out of business). 

In any case you want a real estate agent.  On a similar question posted in a different forum, Realtor Cindy Jones of Woodbridge, Virginia, stated, “You are far better off to have an agent who is protecting your interest in the transaction than worrying about real estate commissions.”

There are literally hundreds of issues that could come up during a real estate sale.  You want an agent that is going to look out for your interests and get you safely to closing.  In the cases of foreclosure buying or new construction buying you especially want an agent who knows the procedure and can refer you to the right attorney to vet the real estate contract.

Homes for Sale in St. Augustine: I Need to Sell By the End of 2010, How do I do it?

Wednesday, September 15th, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

While scouring the web for topics this morning I ran into this one:

I have a vacant property that I need to sell by the end of 2010 and need a Realtor to list it with, who do I contact?

An agent in Miami named Nayla Benitez was the only one who gave good advice and didn’t shill for the business.  Among other things she mentioned:

  • Choose an agent that works full time.
  • Choose an agent that is successful getting deals closed.
  • Choose an agent who is familiar with the area where the property is located.
  • Choose an agent with a good marketing strategy.

As for actually selling the property, I would make sure the agent can demonstrate these things:

  • Choose an agent that will tell you what you need to hear, not what you want to hear.
  • Choose an agent who can tell you how many sales this neighborhood, or this type of property, normally does in a year.  Why?  Because you need to know the odds.  If this neighborhood normally does 15 sales in a year, its already done 12 sales and there are 2 more under contract, you may be competing for a single buyer between now and New Years…you better be aggressive.
  • Once you determine a price range, drop it 10% below the low range.  If that doesn’t sell it be even more aggressive with the price.
  • In the case of multiple offers, cash always beats financing. 

One last thing I would mention.  The Realtor who is the most expert as selling your property may not be the agent with the most sales in your neighborhood.  Example: Charlene Spitbucket sold five homes on your block this year, and she calls herself the “Neighborhood Expert.”  Trouble is, Charlene listed 50 in your neighborhood…she only is able to sell 10% of what she lists.  Far from being the “Neighborhood Expert,” she may actually be “The Place Where Sales Go to Die.”   I would rather have an agent who listed three and sold two, or listed one and sold one.  If you do call in the “Neighborhood Expert,” make sure they bring in EVERYTHING they listed…sold, expired, active and withdrawn…and see which nickname they actually deserve.

Homes for Sale in St. Augustine: How Much OVER Market Can I Sell My Home For?

Monday, September 13th, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

I saw a post this morning on an online forum from a seller who wanted to know what % he could charge over market value and still sell his home.

I’d like to paraphrase the Trix Rabbit here: “Silly Seller, Real Estate is for Pros.”

Actually, you can overcharge for your home in Orlando, becuase Orlando is where Fantasy Land is located, and that be the only place you can sell your home for over market right now.  And then when you’re finished you can ride “It’s a Small World.” 

Market price is simply the place where a willing seller and a willing buyer meet.  We use recent sales to give us the most recent indication of where buyers are at in terms of what they are willing to pay for, and what list price we expect to see activity at.  For example, if most homes in a neighborhood are selling around $150,000, but several of them are listed at $170,000, then you can list at $170,000 but don’t expect more than $150,000.  The best thing you can do is actually list at $150,000 and get that offer right away instead of paying for 6 months of house payments, utilities, etc.  Head over that top line and you will fail to sell…and your neighbors also trying to sell their home will thank you for taking yourself out of the game. 

“But Sean, if I list for $150,000 they’re going to bring me an offer of $140,000.”

Possibly, but the offer will be in the first few weeks and if they are serious they will come up.  If it really is a $150,000 house someone will come along even if these koombas don’t.  And, after you run the numbers, maybe $140,000 works after all. 

Think about it: if you’re paying $2000 a month in carrying costs and you are listed at $170,000 and you end up selling seven months later at $142,000, you’ve just spent $14,000 to get an offer that was only $2000 better than what you would have gotten the first week…at a net loss of $12,000.  That $12,000 should have been going into your new home.

If you have a home that does not lend itself to more uniform pricing, you should at least be able to determine a range…and right now the way things are the best professional advice I have for this market, today, is to head for the lower end or below that range

You really want a few more dollars (and a faster sale) beyond list price?  Take this advice I found online from Glendale, California, real estate agent Keith Sorem

1. Most home sellers do not properly prepare their homes for sale. One of main reasons that home sellers hire a Realtor is to find out what they can do to their home with limited time and money to make it the most marketable.
2. It is not how much money or time you spend, it is where. The benefit to hiring a Realtor to sell your home is that they know the local market, what is on the market, and what buyers want.
3. Declutter – space is money. Get rid of everything that you do not need.
4. Clean – as you never have before, including windows, light fxtures….maybe hire a professional cleaner.
5. Paint – all must look freshly painted.
6. Staging touches – I give my clients a staging checklist. After doing all the above, add, fresh flowers, flowering plants, expensive looking and/or new towels in the bath, linens on the dining table, etc.

Homes for Sale in St. Augustine: I Want to Sell My Home FAST!

Friday, September 10th, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

So you want to sell your home FAST?

Okay, look you’re not alone.  Less time on the market usually means a better offer.

Price is the most important component in any home sale, fast or otherwise.  Your price has to be in line with the market, i.e., what other homes have sold for in your peer group.

By peer group I mean the same neighborhood, or the same type of home or condo unit in differing neighborhoods.  I’ll give you some examples:

If you have 22 sales this year in a subdivision that’s only five years old: don’t go looking beyond the border for better prices.  That country club right next door? You can’t use those homes to base your value…you have to stay with the homes in your neighborhood because they are of a similar age and construction.

But, if you have a townhome style condo, you can do some of your price basing of similar units in other communities.  In my home market of St. Augustine, Florida, we have a lot of oceanfront condo communities…with very few sales in each.  But by looking at all sales of ocean view 2-bedroom townhomes (or all sales of oceanfront flats to draw a price differentation), then we can get a good idea of what price range buyers are making buy decisions in.  Only then can we  factor in how good the view is, or what condition the unit is in, etc.

If you are truly in need of a FAST sale…by that I mean an offer in two weeks…once you determine market price you should reduce that by 3% to 10%.  It will get a buyer’s attention fast.  In some markets a higher buyer-side commission will also help…if nothing else the buyer’s agent will be super motivated to hold the deal together if there are issues along the way (and there always are). 

Lastly there’s the marketing component.  Sure, you’ve got a great price on your home but it doesn’t matter if nobody knows.  So that’s where choosing a great real estate agency (like St. Augustine Team Realty) really will do wonders for your sale.  In this case, a fast sale, the online component of marketing is extrodinarily important because it can get to a potential buyer immediately.  And a smaller agency with an adept website can often move faster in this regards than one of the behemoth agencies where it takes days to get new properties uploaded and/or updated. 

I cull the real estate blogs in the morning to get insights for our blog posts here.  Today I drew inspiration from two Realtors, San Diego, California, Broker Victoria Crown and Los Angeles agent Nicholas Abouchian.   Their posts are below:

Abouchian post.

Crown post.

Homes for sale in St. Augustine: I’ve Been on the Market 2 Weeks and No Showings? Is that Normal?

Wednesday, September 8th, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

So you’ve been on the market two weeks now and no showings, and you want to know if that is normal.

It’s normal if your particular subdivision does six sales a year.  In a case like that you’re only looking at one bona fide buyer every 60 days, and maybe you’ve already had five sales this year.  So yes, this is normal.

It’s also normal if you’re in an elevated price range.  In the St. Augustine market it’s not unusual to have over 100 homes priced over $1 million.  Yet, only 14 may sell in a given year.  That means there are only 14 bona fide buyers out there, period.  Furthermore, fully 86% of those homes will fail to sell simply because there are not physically enough buyers for homes in those price ranges.  (As of today the actual number is 93 homes priced over $1M, with 8 sales posted since January 1…not a great price range to be in.)

Real estate showings are cyclic…you can go weeks with very light activity and then four showings in a day, it happens.  But if you are in a neighborhood that has numerous, regular sales it still is not such an issue in the first two weeks, but if it gets to four weeks then it’s time to look at the price, the terms and the housekeeping.

Two famous real estate maxims:

  1. “There is nothing that won’t sell at the right price and terms.”
  2. “No amount of advertising will sell an overpriced listing.”

As a seller you have the sale in your hands.  A Realtor such as myself can get your home seen in the far corners of the world, but if the price is out of line with prices in your neighborhood then the buyers will key into that fact pretty quick.  The internet can make anyone an expert on your neighborhood in a couple of days…in fact a buyer searching for a home may know more about the place you live than you do.  

Also, things like “24 hour notice to show” or “tenant occupied, need 24 hour notice,” or “pick up keys in office” are death knells for a listed property.  You don’t have 24 hours to wait for anything…why should a buyer wait when there are other homes to look at right now? 

A final factor: housekeeping.  Your house doesn’t have to be spotless, but have it looking like it would if you were having a bunch of strangers over for a party.  Get the d*mn exercise equipment and kitty condo out of the living areas and into the garage.  Remove the DVD rack with your Rambo films.  The computer desk should have a computer…that’s it…not three years worth of paperwork piled alongside with cables and wires running everywhere.  Nothing says “keep me on the market forever and bring me a low offer” like clutter.

And no one cares about crown molding.  Repeat after me, “Crown molding DOES NOT add value to a home.”

If you really want to know how your house is stacking up, go to Realtor.com and search for other homes in your neighborhood or price range.  If you’ve got a 3-bedroom ranch built in 1975, you may discover that the price you are offering will also get you a newer waterfront home in the neighborhood right next door, and the probablity is that you are overpriced.  It can be an eye opening experience, but it will also help you sell your home.     

Michael Lescher, a Realtor from the Chain of Lakes (Gurney), Illinois are provided some great insight for this posting.

Homes for Sale in St. Augustine: I Paid CASH, Can the HOA Foreclose on My Home?

Friday, September 3rd, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

So you bought a house, paid cash (no mortgage), but you decided that you didn’t need to bother with those Homeowner’s Association Dues.  Bad move on not paying the HOA dues. 

In Florida an HOA can foreclose if you don’t pay the dues.

Ditching HOA dues is like ditching a speeding ticket: sooner or later it catches up with you, it will cost more to settle than if you would have just paid it, and it will possibly involve attorneys. 

Basically, if you are behind on your dues the HOA can file a lien on your property forcing you to pay the dues before you can sell.  But if they don’t want to wait for you to sell they can ask the court to foreclose and use the proceeds from the sale to pay the dues.

So if you have issues with the association try to work with them, and be a part of the association, before it gets that far.

I’ll give you an example.

My friend bought a house in a new development in 2005.  In 2009 the developer turned management of the association to the homeowners.  Now, in this community about 25% of residents keep their lawns golf course manicured perfect, the other 75% keep their lawns up, but don’t otherwise irrigate or fertilize.

This summer has been the hottest in Florida in over 50 years, the fourth hottest on record and in our part of the state we had something like a record 45 days in a row above 90 degrees.  Even if you irrigate regularly this has been a hard summer on grass, with burnt patches and thin growth. 

So in my friend’s development the HOA sent out a letter to about 3/4 of the folks demanding that they get rid of the burnt patches, edge, weed…all this goofy stuff.  For my friend to comply to these standards he would not only have to hire a landscaper, but he would have to install a irrigation system.  Furthermore, to meet these standards from the HOA he would have to irrigate everyday, which would be illegal (you’re only allowed to irrigate two days a week here due to water conservation rules).

So he is going to be friendly, but firm, with the HOA and work with them.  He’s going to site all the points above.  He will continue to take care of his lawn.  But he will not reach for an artificial standard that would force him to bear undue cost or violate the law by watering illegally.  And if the HOA doesn’t back down he can then move towards legal action, should he choose.

Better the homeowner initiating the lawsuit than the homeowner’s association.

This post was inspired by an answer posted in a Truli online Q&A forum by New Smyrna Beach Realtor Donna Concannon of Prestige Properties.  And thanks to my dear friend Jake for the HOA example.      

Homes for Sale in St. Augustine: I’m Buying a New Home, I Don’t NEED an Inspection!

Wednesday, September 1st, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

Buying new?  Don’t think you need a home inspection?

What are you crazy?

Look a home is a home.  The only difference between a new home and a re-sale home is the age of the materials. 

You would inspect a 5-year old home wouldn’t you?  Would it matter if the home was new or 5-years old if a subcontractor forgot to blow the insulation in?

Using a home inspector on a new home helps you in two ways.  The first is it helps you create a punchlist for items that aren’t done yet, so that the builder can fix these items before you move in and before you close.  The second thing is that it will find items that simply were not done: electrical outlets that weren’t connected, insulation that wasn’t blown in, a toilet that was broken during installation and is leaking.

So get a home inspection and get some peice of mind. 

This blog post was inspired by a similar blog post from Realtor Carla Muss-Jacobs in Portland (Beaverton), Oregon.