Archive for September, 2011

Help St. Augustine Team Fight Breast Cancer this October!

Friday, September 30th, 2011

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

For the second straight year St. Augustine Team Realty is joining the fight against breast cancer by donating a portion of the proceeds from the sale of its October listings to Susan G. Komen for the Cure.

Susan G. Komen for the Cure is the global leader of the breast cancer movement, having invested nearly $1.5 billion since inception in 1982. As the world’s largest grassroots network of breast cancer survivors and activists, it works to save lives, empower people, ensure quality care for all and energize science to find the cures.

You can find out more by visiting the St. Augustine Team home page at www.StAugTeam.com and clicking on the pink ribbon, or go straight to our Find a Cure for Breast Cancer page.

 

How it All Went So Horribly Wrong…

Thursday, September 29th, 2011

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

The real estate market 2005
The 2005 real estate market and the Titanic: it worked about as well for both.

I was interviewed by Flagler College student reporter Nicholas Cardoso last week for a broadcast journalism class and the questions were about foreclosures and the foreclosure market.

In other words, “How did all go so horribly wrong in real estate?”

The reason is simple: banks wrote bad loans which created a false demand.

Basically, banks were writing loans to anybody, especially people who were unable or unwilling to pay these loans back.

Banks were writing loans to people who had no visible or credible means of making the payments on the loan amount.  These were the Unable.

Or, the banks were writing loans to people who had no intention of paying the loans back (based on credit score).  These were the Unwilling.

Why were the banks doing this?  Because they could then carve these loans up, rating agencies would stamp them as AAA+, and Wall Street would buy them.  These were called mortgage backed securities.

In the end it was so easy to get a loan you basically only needed a drivers license…no income check, no asset check, sometimes not even a credit check…to buy a house.

So what happens when you flood the market with cash?

In this case it created an insatiable, and false, demand.

False because these buyers should have never been in the market.

Had regular criteria been followed, had the loan amounts been in line with the buyers’ true ability to pay, many of the buyers would have been stuck at a drastically lower price point (and thus priced out of a rising market, which would have calmed prices), or it simply would have knocked them out of the market altogether (and into the rental market).

There is the story of a California strawberry picker who bought a $500,000 house.  Seriously?  A strawberry picker? Fueling the demand for half-million dollar houses?

For real.

The Upshot

People were fighting over houses.  The supply of houses dwindled.  It drove the price of houses up and up.

Here in St. Augustine houses that should have been selling for $134,000 were selling for $300,000.  I calculated that real estate on Anastasia Island was appreciating at 25% a year.  Some homes were appreciating at a rate of $5000 to $10,000 a month.

People jumped into the market that had no intention of actually living in the homes they were buying.  Especially new construction.  They would contract a home that wouldn’t be ready for 10 months and bet that they could sell it for a lot more when they actaully took possession of it.  People were actually selling the new construction contracts for a profit before the home was even built.  As the market was peaking some construction companies made an effort to cut the contract holders out at the last minute and sell to someone else, essentially trying to steal the profit themselves.

And then, who knows really why it ended?  Was it that the first-time buyers finally got priced out of the market, even with over inflated loan values, and decided to rent?  Was it the shock of Hurricane Katrina bumping gas prices to an unheard of (then) $4.00 a gallon with the fear of inflation looming?  Was it that strawberry pickers finally realized they just couldn’t swing a $5000 a month payment? Was it just that the bloom was off the real estate rose?

Whatever happened, sales started trailing off locally in September 2005.  Inventory, which had been in favor of sellers 2-to-1, switched in favor of buyers roughly 4-to-1 in 12 months.

It took the buying public awhile to figure this out.  Prices continued to rise into the summer of 2006 even though the market was becoming bloated.  Real estate agents at first thought it was just a correction.

By late 2006 a few sellers started cutting prices.  Some were absolutely disgusted that they had to do this.  They blamed Realtors for doing a poor job of marketing.

In November 2006 sent out a letter telling my sellers to get out now because “a real estate train wreck” was on the very near horizon.

Two sellers dumped me immediately.

Another seller chewed me out because I only got him $140,000 for his double wide in Flagler Estates, “and he had already dropped the price by $10,000″ based on my advice.

But those that did get their homes in line with the market sold and moved on.

Today that Flagler Estates home would probably sell for $60,000 (or less).  I wonder if that guy is still upset about the outcome?

What Role did the Real Estate Agents Play?

After the market crashed I was upbraided by a relative for doing my small part in causing the disaster.

I said, emphatically, “No Way.”

Sitting in my office during the boom years I was deluged with calls from buyers.  And I would take their information and give it to one of the several lenders I worked with.  These lenders checked credit, income and assets.  And so many times they would call back and say, “No f—ing way.”

They couldn’t tell me why (privacy rules), except the occasional “there may be credit issues here.”  But these people had enough of a history of not paying the bills that it scared the straight lenders away.

And yet, six months down the road I would find out that these same buyers bought a house.  A really expensive house.  They would just shop lenders until they would find someone who would tell them what they wanted to hear.

And we Realtors figured, “Well, these banks must know something we don’t.”

We had some idea that these people had terrible credit.  But if that really was an issue why would any lender in their right mind make a loan?  Unless there were mitigating factors…I personally believed that the banks had some kind of state-of-the-art, high-tech computer algorithm that could sort out the good bad risks from the bad bad risks.

And, finally, in the end all real estate agents had a choice to make.  Either choose to facilitate these buyers, because they were the major players in the market at the time, or make the choice not to work.

And if the banks were signing off, who was I as a real estate agent to question what they wanted to do with their money?

Sure there were trolls out there, real estate agent knowingly steering people who should not be buying to disreputable lenders.  Every office had one, but they really were the minority.  It was the buyers driving the train during that period, and they didn’t need any urging to jump right in.

And one of the secret truths about real estate agents is that they don’t know numbers and trends very well anyway.  Realtors are salespeople.  They are skilled at being the diplomats who get buyers and sellers to work together through the sometimes turbulent 60-day process of buying a home.  I can truthfully say that most Realtors I know or knew got burned themselves by real estate they bought during the boom.  They had no idea.

As did Wall Street and everyone else.

The Market Today

The market in St. Augustine is, for the most part, stable again.

Here in St. Augustine, the market for single family homes and most condo is stable and actually appreciating, albeit slightly.

There are just a few less sellers than buyers now, which is what you need to sustain appreciation.  And even the builders are starting to build again.

And this generation has learned from its mistakes.  I hope.

If you want a group of Realtors that can spot trends and steer you through the market, contact St. Augustine Team or call (904) 386-8327.

 

915 Brookhaven Drive in St. Augustine: St. Johns Home Back on the Market!

Monday, September 26th, 2011

by Kate Stevens ( Kate@StAugustineTeam.com ), Broker Associate for St. Augustine Team Realty (www.StAugustineTeamRealty.com). Join us on Facebook.

915 Brookhaven Drive, Home for sale St. Johns Golf & Country Club

915 Brookhaven Drive, Home for sale St. Johns Golf & Country Club

Just wanted to let everyone know that our beautiful home at 915 Brookhaven Drive in the St. Johns Golf & Country Club is back on the market!

This 4 bedroom, 2.5 bath home boasts a huge yard, backing to the golf course.

It has a large, open ground floor with formal living and dining rooms as well as a family room opening up to screened porch.  The kitchen is nicely upgraded kitchen with granite counters, 42″ cabinets and a commercial-style gas range.  All wet areas are tiled.  The large master bedroom features a den area, and a gigantic master bathroom with walk-in closets and big tub. Located off of County Road 210, its an absolutely convenient location for getting to Jacksonville or St Augustine quickly.  This home is a short sale.

Just email me (Kate@StAugustineTeam.com) to find out more!

Come Meet Your St. Augustine Team…Open House Tuesday!

Monday, September 26th, 2011

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

We’ve been open TWO YEARS now and we’re having a celebration / open house / mixer!  Come by Tuesday afternoon from 5-7, have some nosh, meet the Team and as this doubles as a mixer for the board of Realtors, you can meet some other members of the community as well!

Thanks for supporting our local business and hope to see you there!

Help Celebrate St. Augustine Team's 2nd Birthday!

Help Celebrate St. Augustine Team's 2nd Birthday!

 

How Much Does it REALLY Cost to Buy a House? Closing Costs and Your New Home

Thursday, September 22nd, 2011

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

Even babies wonder what's up with closing costs.

Even babies wonder what's up with closing costs.

How much does it really cost to buy a house?  What are the closing costs on a home?

If you’re paying cash, it will probably be under $1000 and may only be a few hundred.  If you’re getting a loan, well, that’s where the fun starts: it could be hefty.

If you’re getting a loan there will be fees from your lender.  There will be an origination fee (typically) because this is the amount the lender gets paid for doing the work on your loan…this could be any amount.  Seriously.

Here’s one I saw recently.  The origination fee was $3000, but the bank is offered the buyers a deal: if the buyers took a higher interest rate they would cut the origination fee in half.  So the origination fee dropped to $1500.

When you get a loan the bank orders an appraisal on the house.  You pay for this. Most of the time you pay for this at the time you make your application, but it could be on your closing sheet.  An appraisal will run from $400-$500.  You also will pay for a credit check, which is around $50, and a tax service fee of around $75 (which helps determine the exact taxes owed on the home).

You may need a survey (upwards of $400), but sometimes the bank will accept the copy of an old survey.   Whether you get a new survey or not you will need a flood elevation certificate for insurance purposes…I’ve been charged as much as $250 for one of these.

You need to pay your homeowners insurance for the first year at closing, plus (typically) an extra three months to start the escrow account that will pay for the insurance when its due again in a year.  So this may be $600 or it may be $3000 depending on your house.  If you have flood insurance, you will have to pay that too at closing.

You will need to pay the mortgage interest that’s due before you make your first actual payment on the loan.  Figure a months worth of interest?  A few hundred $? A few thousand?  It’s based on the loan.

If you put down less than 20% down then you will probably pay something called mortgage insurance (MIP).  This could be upwards of $1000 based on the amount of the loan.  Like insurance you will have to start funding an escrow for this as well, for when it’s due the next year.

Property taxes.  If it’s September, October or November (when taxes are due), you will pay the whole tax bill at closing.  But you will get a credit from the seller for the portion of the year they lived in the home.  So if the seller lived in the home 10 months, you will pay the whole tax bill, but you will get a money credit for 10 months and actually only pay for 2.  If it’s early in the year you won’t pay the whole tax bill at closing…there will be enough in your escrow to pay them at the end of the year.  But you will still need to pay at closing to start funding your escrow.

Title insurance.  This is based on the price of the home.  You will pay for a title insurance policy for your lender. This is called the Lender’s Policy.  On a $200,000 home this will be over $1000.  You will also pay for something called endorsements, also for your lender, which cover extra things not covered by normal title insurance (for example, title issues arising due to a previous owner making improvements that weren’t permitted).  At the same time the seller will pay for a title policy for you (this is called an Owner’s Policy).  But typically the seller will not pay for the same endorsements for the Owner’s Policy…you may want to pick these up yourself, they are worth it, and they are only a few hundred dollars.

Recording Taxes. Known as the doc stamps and intangible taxes, these are based on the value of the mortgage.  The cost is $.35 per $100 dollars of value for doc stamps, and $.20 per $100 in value for the intangibles.  On a $200,000 LOAN, the doc stamps would be $700 and the intangibles would be $400.

Additional Fees.  If it’s a mobile home there will be a title transfer fee that could be $1000.  Moving into a homeowner’s association or a condo?  These fees can run anywhere between $75 and a few hundred $$.  If the homeowner’s or condo fees have already been paid up by the seller, you will pay the seller back (as a closing credit to the seller) for the portion of the time that you will be living there until it is due again. If they haven’t been paid, you will pay your share.

There could be more I’m not thinking of. But these should be the fees in a nutshell.

It’s hard to get these fees altogether upfront.  Why?  Well it should be obvious. The lender is charging one group of fees.  The state is charging another set.  Your property tax credits will be based on the day of closing, which isn’t set yet.  You may not know at the time of contract whether there is a HOA or condo transfer fee, or whether the fees are up to date or not…and it might take weeks to find out depending on how responsive the HOA/condo association is.  You may not know if you need a survey yet, and you probably haven’t shopped for insurance yet, so you won’t know those costs yet.  Depending on how the flood cert shakes out, you may need flood insurance.  The title company may not know which endorsements the lender requires on their Lender’s Policy until a few days before closing.

What to do?  Manage each section separately.  And communicate, communicate, communicate with your Realtor, mortgage lender, and title company to get a handle on these costs as they evolve.

They will love you for it.  Why?  Because most buyers disappear between contract and closing, sometimes not even bothering to show up for the home inspection.  Then they yell at closing because of the costs.

Don’t let that be you.

Many thanks to Stephen Collins of Land Title of America in St. Augustine for help sorting out these fees.

For a group of Realtors that will help steer you through the maze of buyer fees, contact St. Augustine Team or call (904) 386-8327!


Native and Drought Resistant Plants for St. Augustine’s Valley of Death, Part II

Monday, September 19th, 2011

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

There is life in the Valley of Death!

Society Garlic surviving in the Valley.

Society Garlic surviving in the Valley.

Last month I wrote a post about growing plants (or rather killing them) in my front yard, aka, the Valley of Death.

A short recap: even the weeds don’t grow well in my front yard. So I had to find some plants that loved full sun, poor soil, didn’t need a lot of water, and didn’t need a lot of maintenance.

The first pioneer plants to go into this blighted place were Tender Fountain Grass (Pennisetua setaceum) “Rubrum.”  I am happy to say they are still hanging on, although one of the three we planted I have my doubts about.  We’ll see (this is the Valley of Death after all).

The second group of plants went in last week. This time we planted something called Society Garlic (Tulbaghia violacea), not a Florida native but a plant that does well in a Florida yard like mine.  It looks a bit like wild onions or scallions with pretty purple flowers.  We will see how they do before we plant more.

You can grow Society Garlic from bulbs, but the squirrels in my yard have no honor.  The little buggers would probably dig them up and eat them.  So we went over to Southern Horticulture on Anastasia Island again and bought these already grown…it’s not a problem planting these in a hot Florida September.

We have one other Flower planted in the Valley, something called a “Penta” (Pentas lanceolata), with purple flowers that the butterflies like.  My daughter got it from a planting class for kids earlier this summer.  While not exactly suited to the Valley, it will wilt faster than the other plants, so it acts a bit like a canary in a coalmine: it tells us when the soil is getting dry enough to kill.  It’s been in about a month now and it’s hanging on too.

We’ll give you more updates as we continue the plantings!

Pentas: Our Canary in the Coalmine

Pentas: Our Canary in the Coalmine

For a group of Realtors that will plant you in the right place, contact St. Augustine Team Realty St, Augustine Team Realty or call (904) 386-8327!


St. Augustine Team Donates Beach Buckets to Otis Mason Elementary Kindergarten

Monday, September 19th, 2011

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

Mrs. Grossholz, Mrs. Strauss and Monkey with Beach Buckets

Mrs. Grossholz, Mrs. Strauss and Monkey with Beach Buckets

For the second straight year we at St. Augustine Team have donated the extra beach buckets from our summer promo to Otis Mason Elementary kindergartners.

We donated a  total of 40 buckets to Mrs. Grossholz’s and Mrs. Strauss’ classes.  Last year we donated our extra buckets just to Mrs. Grossholz’s class (she called us after the summer to see if we had any extras), but this year I personally have a monkey in the Otis Mason kindergartner so we donated enough buckets for two classes.

The photo is of Mrs. Grossholz, Mrs. Strauss and the St. Augustine Team Monkey.

For a group of Realtors that will make sure you never run out of beach buckets in this wonderful beach town, contact St. Augustine Team Realty or call (904) 386-8327!


St. Aug Team’s Monica Nunchuck Donates Hair to Locks of Love

Thursday, September 15th, 2011

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

Monica Nunchuck of St. Augustine Team holding donated hair

Monica Nunchuck of St. Augustine Team holding donated hair

I am proud to announce our very own Monica Nunchuck visited the stylist in early September and said goodbye to her long tresses of flowing blonde hair.

Monica is donating said tresses to Locks of Love, a non-profit organization that provides hairpieces to financially disadvantaged children. The donations return a sense of self, confidence and normalcy to children suffering from long-term hair loss due to cancer or other medical issues.

“In addition to my two sons Alex and Gregory who are blessings from God,” Monica said, “I always wanted a girl. I’m not sure when I’ll be a grandma and if I’ll ever have granddaughters, so I thought what would be the next best thing for me but to grow my hair for a little girl that has lost her hair to cancer or alopecia areata. It is my hope that it will give that special little someone the confidence and self esteem she needs to get through her tender life.”

Anyone who wants to find out more can contact Monica at (904) 669-1075 or visit her website at www.StAugustineRealEstateBuyersAgent.co.


Be Prepared when Buying and Selling at the Same Time

Tuesday, September 13th, 2011

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

Yoda T pities the fool who is not prepared on closing day.

Yoda T pities the fool who is not prepared on closing day.

So you’re buying a house, and selling a house on the same day, and you’re not afraid.

As Yoda once famously said, “You will be, you will be.”

On a day where you’re buying and selling a home at the same time, be prepared for delays on one or both sides.  Closing delays are things that you and your agent simply cannot control.

What you can control is how well prepared you are for, and what backup plans you have for a delay.

A real estate transactions has a lot of moving parts, and all the moving parts are human beings. 

Let’s say you sell your house without a hitch and then head over for an afternoon closing on the house you are going to purchase.  But the underwriter on your loan didn’t look at your paperwork (for real…this happens all the time) until this morning.  He’s in California so he didn’t even get into the office until 12 pm eastern.  You’re closing at 3 pm eastern, you’ve already sold your house and have a moving van filled with all your stuff.  The underwriter notices that there’s a $500 credit for repairs on the settlement statement.  He puts the brakes on the whole thing because Bank of Whatever has Strict Guidelines on lending money on Homes That Need Repairs.  You don’t find this out until 4 pm, when the title company finally gets a response from Bank of Whatever, disapproving the settlement statement.  Now the house needs repaired ($500 for some cracked tile), and an appraiser will have to go out and verify the repairs were made.  It’s Friday…you’re looking at closing on next Wednesday at the earliest.  What are you going to do?

This is how the real world of real estate transactions works.

Most of the time when a closing is delayed the maximum warning you get is 24 hours when the bank paperwork doesn’t show up on time.  Many times the delay is a surprise on the day of closing.

As an agent I try to always have my buyers and sellers prepared for this situation.  Have a backup place to stay, have a backup place to store the furniture, and if possible, have a bit of a cash cushion built up to cover these expenses while you wait to get in.   

A benefit to not moving into a home right away is that it gives you the time to do the painting and upgrades you want at your own pace.  So this kills two birds with one stone: it allows you to do the upgrades and it gives you peace of mind just in case the closing is delayed.

True story: I once had a seller who was selling their home and buying a home on the same day.  They had to close on their existing home before they could move into the new home.  They had most of their stuff in storage, but still had a few items at the house the morning of closing that they were going to move before closing.  The buyer came in for the walk through and freaked out because there were still things in the home…a home he didn’t own yet.  He literally…I am not making this up…stomped around like an angry toddler, yelling that he was not going to close until the house was empty, clean and swept.  A grown man was doing this.  My mouth must have hit the floor. 

So we were really concerned that this guy was going to close at all.  You just don’t see this type of behavior from adults in public.  We were questioning the guy’s sanity.  But the angry toddler’s wife talked sense to him in the meantime and everything closed without a hitch.  And then the sellers could become buyers and move into their new home.

But it was a near thing.  Be prepared just in case the buyer of your home turns out to be in pre-K as well.

For a group of Realtors who will get you prepared, just in case, even to the point of providing warm milk and cookies to adults who act like preschoolers, contact St. Augustine Team or call (904) 386-8327.  

Kid Friendly Fridays: The Top 5 Parks for Kids in St. Augustine

Friday, September 9th, 2011

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

Is it Casual Friday? Nope, it’s Kid Friendly Friday!

Here are (in our opinion), the Top Five Parks for Kids in in St. Augustine:

Vaill Point Park

Vaill Point Park is tops because you have a huge, mulch-covered play area for the kids with two seperate climbing castles (one for bigger kids, one for smaller kids), a small climbing wall and swings.  There’s a big green area for the kids to run and a large picnic pavillion with shade for the adults to sit in while watching the monkeys.  Vaill Point also has paved, kid-easy nature trails that lead down to a beautiful pier and kayak launch on Moultrie Creek.  The only negative: parking is limited.  Vaill Point Park is located at 630 Vaill Point Drive.

Treaty Park

Treaty Park is one of our top 5 because there is simply so much to do.  There’s a huge playground that is good for big and small kids alike, partially mulch covered and partially covered with a soft rubber surface.  Right next to the playground is a huge green space that is big enough to accomodate two soccer practices and enough extra room for kids to run on the sidelines, a picnic pavillion, four baseball/softball fields, and a kid friendly boardwalk where the little ones can watch the ducks and turtles.  For the older kids and teens there’s a large skate park that’s seperated from the playground by the pond.  Treaty Park also has a jogging path that circles the park, and a fenced dog park.  Treaty Park is located on Wildwood Drive about halfway between SR 207 and U.S. 1.  Parking can be a bit tight when the softball games are going on.

The Pirate Ship at Palencia Park

The Pirate Ship at Palencia Park

Palencia Park 

Palencia Park makes our top 5 just because it has a big wooden pirate ship for the kids to romp around on!  The park also has swings, monkey bars and other play equipment inside the fenced playground area, as wells as soccer fields, baseball diamonds and a pretty pond outside of it.  Palencia Park is located at 405 Palencia Village Drive in the community of Palencia.  Like Treaty Park, parking can be tight if there are baseball games going on.

Project SWING Park

Project SWING Park makes the list because of the huge wooden castle with towers, stairs and swinging bridges for the bigger kids, and a seperate section with small swinging bridges, tunnels and a toddler sized play boat for the little kids.  There are tire swings and regular swings as well, plus a picnic pavillion in the center for shade.  The downside to this park is access: it sits on Orange Street on the corner of St. Francis Field right across from the City of St. Augustine Parking Garage.  You can pay the parking fee at the garage (which is going up to $10 a day soon).  Otherwise, unless you can find off street parking or have time to get a discounted Parking Pass from city hall, this park can be hard to get to.   

Davenport Park

Davenport Park makes our list because of the carousel!  Yes, that’s right, St. Augustine has it’s very own carousel, which only costs $1 a rider (and they even offer rides at a discount if you buy a 10 or 20 ride pass).  Davenport Park is mainly for the little kids, with the play equipment designed for the toddler crowd (the exception being some bigger monkey bars and swings).  The downside to this park is that the homeless hang out on the lawn on the other side of the fence at the old armory building.  However, there’s usually an army of parents watching over the kids.  Davenport Park is located at the corner of San Marco and San Carlos, right next to the main branch of the St. Johns County Public Library.

Honorable Mention: Splash Park at the Pier

On a hot summer day there is no better place to take the younger kids than the Splash Park at the Pier.  With jets of water shooting up everywhere it’s a great place for the kids to run around and cool off.  Right next to the water is a small climbing castle surrounded by sand for the kids who don’t want to get wet.  There’s plenty of places for parents to sit and watch, ice cream for sale in the pier office, and of course, it sits right next to the beach.  Why only an honorable mention?  Because the kids don’t use it much in the cold weather months. 

For a group of Realtors that work like adults and play like kids, contact St. Augustine Team or call (904) 386-8327!