Archive for February, 2012

What is the Difference Between an Agent and a Broker?

Tuesday, February 28th, 2012

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

Sean Hess, Broker and Manager for St. Augustine Team Realty

Sean Hess, Broker and Manager for St. Augustine Team Realty

What is the difference between a real estate agent and a real estate Broker?

In Florida the Broker is the head of the office, and often the head of the company.  In some larger corporations with multiple offices there might be a CEO or President who is not a Broker, but a Broker will be managing each individual office.

The Broker license is a special license.  Only a Broker can head or manage an office.

Brokers can and do sell real estate.

A Broker Associate is someone who has the license to be a Broker, but chooses to work for a Broker as a sales agent instead of heading their own office.

A sales agent, also called a “licensee,” is someone who has a license to sell real estate, but is not licensed as a Broker.  Sales agents make up the bulk of real estate agents.

Make sure you use St. Augustine Team Realty the next time you buy or sell.  Contact us at requestion@staugteam.com or call Broker Sean Hess at (904) 386-8327.

 

What Can a Seller Lie About on a Disclosure and Get Away With?

Thursday, February 23rd, 2012

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

Trees might not be the only shady thing going on...

Trees might not be the only shady thing going on...

What can a seller lie about on a disclosure and get away with?

Well a seller can only lie and get away with it if you let him.

Does it happen, though?  Yep.

I don’t want to say it’s common–I won’t even say it’s uncommon–but sellers making paint-and-putty fixes to hide problems from inspectors and would-be buyers is the stuff of real estate lore.

I saw an online post the other day that kind of illustrates the problem.  I’ll quote from it:

I learned that the seller was lying about mold, saying there was no problem and has been no problem since he is the first owner of the property. I have since learned that he had the finished basement gutted, re-sealed and refinished again, only to have mold re-appear on some walls. Obviously, he knew there was a problem.

Just so you know, I’m not a lawyer and I can’t give legal advice, but here goes my take on this.

In Florida the seller has to make a buyer aware of “latent defects” that may not be readily observable and may matierially affect the value of the property.  In other words, a seller has to let a buyer know about:

Any defects in the home that the buyer can’t see just by looking around, and/or

Any defect in the home that the buyer can’t see that may affect the value of the home.

In the quote above the buyer is assuming that the seller knew about a mold problem.  They are assuming this because they heard from a neighbor that he had a basement gutted, sealed and then finished off.

Now, these buyers have no actual knowledge that the basement was refinished–no proof at all–just heresay.

But for the sake of argument let’s say the seller did have the basement gutted and refinished, and let’s also say it was because of mold.  And let’s also say that the work fixed the problem, at least as long as the seller was living there.

So if there was a problem and it was fixed, and it didn’t appear again, was there any “latent defect” to disclose?

I’ll put it another way: if a roof had a leak and you fixed the leak (and any problems caused by dripping water), would you disclose that?  Most sellers wouldn’t because the problem was fixed…in other words there was no latent defect to disclose if the roof was performing properly.

Now, in the gutted basement example above the buyer infers that the mold grew back.  Again this is based on heresay.

If the mold really did grow back…and maybe that was a natural and expected thing for a basement (there aren’t many in Florida so I don’t know)…and the seller knew it and didn’t disclose it, then he probably failed to disclose a latent defect.

Could the buyer sue him in this case?  Probably.  But I imagine they would not only have to prove that mold was growing back, but that it happened when the seller lived there and that the seller knew about it.

So did the seller get away with lying in this case?  Maybe.  But even if he got sued and won, he still had to pay for attorneys for the defense.

Wouldn’t it have made more sense just to write a single line about mold in a written disclosure and put it on the buyers to do their own inspections?

Would disclosing it have kept the house from beings sold, though?  Maybe to these people, but they were the type of people who might sue because they didn’t understand mold.

And if he disclosed it maybe his Realtor could have directed him to a person who could have affected a real cure?

Who knows!

I had one a few years back where a guy bought a foreclosed home, fixed it up, and then resold it.  While he was inspecting the home (while the home was still a foreclosure) he did a septic inspection which came back fine.  When he flipped the property he gave a copy of this septic inspection to the new buyers while they were doing their own inspections.

About a week or two after the new buyers moved in their agent called and wanted some money for a septic pump/lift station that wasn’t working.  The seller refused.

Why?

Well, because he did it right.

He sold the home in good faith.  He wasn’t aware of any latent defects when he sold it, in fact, the septic pump was working when he sold it.  He had that inspection prior to his purchase that cleared it.  And the buyers had the opportunity to do any and all inspections during their inspection period.  That they failed to do their own septic inspection, while instead relying on a months-old report from the seller, became their own problem.

It was in reality probably nobody’s failure.  Using an inspection report on the septic system, even if it was a few months old, probably was fine…nobody was living in the house, after all, that would create any stress on the system.  My guess it was probably stress on the pump from people living there that actually caused the problem (after all, the pump had hardly been used the entire time the house was in forclosure or in the resale process)…a new inspection wouldn’t have turned up anything anyway.

Contact St. Augustine Team at requestion@staugteam.com to get help keeping clear of shady deals, or just call Broker Sean Hess at (904) 386-8327.

 

How Do I Estimate My Property Taxes?

Monday, February 20th, 2012

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

Understand your taxes before you have to pay them.

Understand your taxes before you have to pay them.

One of the first questions we get when a buyer steps into the market is, “What are the taxes on this home?”

And while we can’t always give the exact number, we can always at least give a solid estimate.  Here’s how you can estimate your property taxes.

First off, St. Johns County (where we are located) has a great property online tax estimator at the property appraisers website.  Go there right now if you want, or if you want a more detailed explanation of the process, just keep reading.

The first thing you have to understand about Florida real estate is that the property taxes are based on the purchase price.  So even though a home or other property that you are looking to buy is currently taxed at “$X,” that dollar figure will bear no relation to what you will pay in property taxes.

Appraised value for tax purposes.

Let’s do an example.

You buy a home here in St. Augustine for $200,000, that is where the tax appraised value starts before anything is deducted.

From that figure the county will knox off 8% (I believe it is still 8% for St. Johns County…and by the way each county knocks off a different amount) as a way of giving you a break for any closing costs you paid.

So the property you purchased for $200,000, minus 8%, is now appraised for tax purposes at $184,000.

If you are not a resident of Florida, or if you are a resident of Florida but this is not your homesteaded property, or this is commercial property or land, that is pretty much where your property will be appraised at, and there will be no further deductions on the appraised value.

If that’s the case then you can just skip down to the section on millage.

If you are resident of Florida and this will be your homesteaded property, read on.

Homesteaded property, and other deductions.

If the home you are buying will be listed as your homestead (you enroll your home as your “homestead” with the property appraiser each year between January and March), then you get to deduct another $50,000 off the appraised value.

In our example above that would take the appraised value down from $184,000 to $134,000.

What is homestead?  Well, basically, it’s a way of telling the state that this is your primary home.  When you do that it will protect your home from creditors if you ever declare bankruptcy, or otherwise fall on hard times.  What it won’t do is protect you from foreclosure if you fail to make the house payment, or protect you from a tax sale if you fail to pay your property taxes.

Homesteading will also cap the maximum amount they can raise the appraised value of your home in a given year to 3%.

For example, during the real estate boom some properties in St. Augustine were appreciating at 25% a year and compounding.  If the local property appraisers would have been allowed to raise valuations 25%, a lot of people would have been taxed out of their home.  In other words, they could still afford the house payment, but not taxes that were going up 25% a year.

That’s why homesteading was created, because Florida is a place where home values can suddenly rocket up.  The constitutional amendment that created homesteading is actually called “Save Our Homes.”

There are some other small ($500) deductions as well: for disabled persons, widows and widowers, and the blind.  Also, if you were disabled as a Veteran you can take an additonal $5000 off the appraised value.

Millage

The general millage rate in the non-city limit areas of St. Johns County is 15.8.  The City of St. Augustine and Hastings are closer to 22.  St. Augustine Beach is 18.  One section of Summer Haven is 25.  There are probably 40+ different millage zones.

If a millage is 15.8, then you essentially multiply the home value by .0158 to get a base rate for your taxes.  For the example above that would work out to about $2117 a year.

What millage zone is a particular property in?

Well, the way I find out as a Realtor is by going to the tax collectors website and pull the record on the property in question.  That will not only give you the zone but the total millage breakdown as well.  It will also alert you if there is a Community Development District (CDD) on your taxes.

Community Development Districts (CDDs)

A CDD is a special, additional, taxing district within the county.

CDDs exist basically to pay off the bonds issued to put in infrastructure when a big housing development went in.  In other words, for the developer to put in all the roads, drainage, amentity centers, etc., in a development like Palencia or Heritage Landing, they had to issue bonds.  Now each owner in those communities pays those bonds off over a period of years as a group, via a CDD assesment on their taxes.  The CDDs typically last around 20 years before they are paid off.  Since most CDDs came into existence no earlier than 2003, many won’t be paid off until 2023 at the earliest.

A CDD will typically add several thousand dollars to your tax bill.

Now, before you balk at that consider this.  In communities where there is a CDD the association fees are typically pretty low.  When you break down the payment from a monthly standpoint, and then add in your monthly association fee,  it’s usually inline with what other communities are paying on a monthly basis.

CDDs actually have their own small boards, and the CDD assesment can actually go up or down a bit in a given year.

Garbage and Recycling.

In some areas garbage and recycling are part of your tax bill.  It’s typically only a few hundred dollars.

Here’s the funny thing.  When you pay the tax bill in November, your are paying for the year you are in.  But you are paying the garbage portion of the bill for the upcoming year.

Portability

Last but not least there is something called “portability.”

Portability works this way: if you own a homesteaded property in Florida and you sell it, you can “port” a portion of those tax savings to your new homestead.

The portability formula is a bit complex and I’m not going to cover it here (hmmm…sounds like a future blog post), but at least know that it exists.

Contact St. Augustine Team at requestion@StAugTeam.com for the least “taxing” experience in real estate, or just contact Broker Sean Hess at (904) 386-8327. 

 

 

Why Do Sellers Buy Title Insurance for the Buyer?

Thursday, February 16th, 2012

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

This is Wanda, and she just realized she owns your house.

This is Wanda, and she just realized she owns your house.

In St. Johns County, Florida, where St. Augustine is located, and in many parts of Florida sellers pay for an Owner’s Title Policy (called “title insurance”) for the persons buying their home.

Why do sellers buy title insurance for the buyers?

In Florida it is is on the seller to prove ownership.  Why?

Well, because Florida law has a created a lot of scenarios where a person who is not on the deed may have an ownership interest in the house.  It has to do with homestead law.

I’ll give you an example.

Let’s say I’m a single guy and I buy a house.  It’s my primary house, so I homestead it.  I homestead my house because under Florida law it saves me a bundle on real estate taxes, and possibly more importantly, it protects me from creditors.  In other words, if I go belly up financially as long as I keep making the payments and taxes on my house creditors can’t touch it.

Well, on a trip to Vegas I meet an lady and I fall in love.  We get married at one of those drive thru wedding chapels, and she comes back to Florida and moves into my house.

Guess what?  Because the house is homesteaded, the state essentially says she now has a half ownership interest in the house.

So me and my lady–maybe we should have courted a bit more–well things aren’t going so great.  We take one last stab at saving our quikee marriage by going back to Vegas.  Maybe the fire that originally flamed to life beneath the tent at Circus Circus can be rekindled.

Alas, its not to be.  I lose it all betting “15″ (our lucky number) on the roulette wheel.  She’s upset and demands a quikee divorce, also at a drive thru.  I return to Florida alone, divorced, and bitter.

I get upset just looking at the empty house where Wanda (did I tell you her name was Wanda?) and I used to watch Jersey Shore reruns.  I decide I have to sell, and I do.  I move off to Tennessee.

Years later Wanda is reading an online blog, maybe this one, and she has a realization.  “Dangit,” she says, “I owned that house.”

And now she wants her half, but I have moved on and she can’t find me.

But the house, and you the poor person living there, well she finds you next.  She has an attorney draw up documents to kick you out because you know what?  Wanda’s right.  She still owns that house.  It was sold without her consent, and as a homesteaded owner under Florida law she can have you kicked out.

Fortunately, before I trotted off to Tennessee I bought you title insurance.  Title insurance is a way of saying, “As the owner of this house I have the right to sell it to you.”  If it turns out the seller didn’t have the right to convey the house, the title insurance is there to protect the new owner by either paying off the old owner or, essentially refunding what you already paid to live there.

After all, as the owner I didn’t know the ins and outs of homestead law.  Wanda and I were only married six months.  She wasn’t on any record that a title company could find.  As the owner I didn’t think to volunteer it.

Alternately, if a title closing company is a good one, they ask these questions ahead of time and ferret out all the Wandas lurking in a chain of ownership.  Then they get Wanda to sign off, because if she doesn’t sign off there will be no sale.

Do these things happen?  In a state of 17 million they can and do all the time.  Mostly they get caught way ahead of the sale, and most involve divorces, as above.  Sometimes it happens that an owner not on title is an heir (in the case of an estate).  Sometimes a person with ownership rights is in prison.

So to recap, why do sellers buy title insurance for the buyer?  Because it’s a way of putting their own money on the line and saying that they own the property, and that they have a right to sell it to you.  And if things go by the board, there is insurance in place to take care of the problem.

As an FYI, title insurance will protect you from chain of ownership issues, but it will not protect you from zoning issues, or homeowner’s association covenant issues, after the fact.  To get protection from these and other things that can pop up you need to buy endorsements to go with your owner’s policy.  But that’s a blog post for another time.

Contact St. Augustine Team today at requestion@staugteam.com for agents that will keep an eye out for lurking Wandas, or just call Broker Sean Hess at (904) 386-8327.

Joleen Nicodemus, Self Made Success, Businesswoman and Model, Joins St. Augustine Team!

Wednesday, February 15th, 2012

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

Joleen Nicodeumus of St. Augustine Team

Joleen Nicodeumus of St. Augustine Team

St. Augustine Team Realty is proud to announce that Joleen Nicodemus has joined its sales team.

A self-made success, Joleen is a veteran of the real estate industry, having worked for nearly ten years in residential sales in Montana and Idaho.  Most recently she worked in St. Marys, Georgia, and as a marketing coordinator for the Mayan Island project in Belize.

Joleen specializes in working with first-time home buyers.  “It was in Idaho where I started working with first time buyers,” she said. “I discovered I have a passion for helping people find their first home.”

Joleen has also spent time on various modeling and acting gigs throughout her career. She currently resides in St. Augustine with her family.

First time buyers wishing to work with Joleen can contact her via email at StAugHomes@gmail.com.

How Do I Get a Copy of My Deed?

Monday, February 13th, 2012

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

How do I get a copy of my deed?

Well, you go to the St. Johns County clerk of courts website and scroll down to “Recording.”  Then click “Online Records Search.”

Accept the disclaimer, and then on the search screen put in your name “last, first” or the name of the trust or corporation.  You might have to play with it a bit.

If the deed is an older one that was never scanned in to the online system you’ll have to go to the clerk of courts in person.  It’s located at 4010 Lewis Speedway, St. Augustine, FL 32084.

The clerk of courts online is the place to start.

The clerk of courts online is the place to start.

Contact St. Augustine Team at requestion@staugteam.com to get your name on a property deed: we make the process simple.  Or just call Broker Sean Hess at (904) 386-8327.

 

 

Where Should a First Time Buyer Start?

Wednesday, February 8th, 2012
How many years will you be in the home?

How many years will you be in the home?

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

If you are buying a home for the first time, where do you start?

Before you do anything else, try and figure out realistically how long you are planning to live in the home you are about to buy.

You do this first for a couple of reasons.

First of all, there are closing costs when you go to sell again.  It might take 3 years before a home gains enough equity to pay closing costs on a sale.  So if you go to sell the home in under three years, you may have to bring money to the table to pay the closing costs on the next sale.  Leaving you at square one again when you go to buy the next home.

So the upshot is, do I plan to live in this home for three or more years?

For example, you just took a new job in a new city.  Everybody is telling you that you should buy instead of rent.  I would say make sure you like the place first before you make that call.

So rent for a year in the place you think you would like to live and see if it meets your expectations.  It might turn out that after living there for a year you discover that there’s another part of town that suits your needs better, or that you like better.

Alternately, you might find out the job or the city isn’t the best fit.  If that’s the case you don’t have to go into a hole selling a property that you’ve only owned 12 months.

Next, the chicken or the egg question of do you find a Realtor or a loan first, and what type of home should a first time buyer look for.

If you are a first time buyer contact St. Augustine Team at requestion@staugteam.com , or simply call broker Sean Hess at (904) 386-8327.

 

How Much Does Real Estate Cost? Seller Closing Costs

Wednesday, February 8th, 2012

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

Previously we did a video on Buyer Closing Costs.

Here’s the video Kate Stevens, Broker Associate, and I did on Seller Closing Costs.

Here are the things we cover in the video:

Real estate commission, settlement fee/title search, owner’s title policy and endorsements, doc stamps on the deed, recording fees, survey, HOA estoppel, and any CDD fees.

Contact St. Augustine Team to get a handle on your closing costs, or call broker Sean Hess at (904) 386-8327.

Is Buying a Bank Owned Home a Good Bet?

Wednesday, February 1st, 2012

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

Is buying a foreclosure a good bet?

Is buying a foreclosure a good bet?

Is buying a home that is owned by a bank (a home that has been through the foreclosure process) a good bet?

I’ll keep this short and simple.

Take the words referencing “bank owned” out of the above sentence.  That leaves you with, “Is buying a home a good bet.”

It is all about the HOME itself.

Do you like the home?  Does it have the right amount of kitchen, bath and bedroom space?  Do all the extra things that come with it, communities, school, yard space, commute, etc., really work for you?  If these things fit the bill, by all means buy it.

After all, the house doesn’t know it was foreclosed on.  You wouldn’t know either except that it’s part of the public record and probably marketed that way to find a buyer quick.

Here are the caveats:

Do your inspections, and do them with a fine toothed comb.

When it comes to the paperwork that the bank wants you to sign (it will come from the Realtor who is marketing the home and will be given to your Realtor for you to sign), take it to a real estate attorney and have him or her go through it with a fine tooth comb.  Make sure you can get out of the contract (and what it will cost, if anything, ideally no cost) if you are uncomfortable with the results of the inspection.  Do this before you sign it.

And, insist that a local title agency, or your attorney, provide the owner’s title insurance policy with the same endorsements that a lender’s title insurance would have for the same house.  EVEN IF YOU HAVE TO PAY FOR IT YOURSELF.  That should save your butt if there is something that wasn’t done to code or, goodness forbid, two years down the road a court determines that there was a robo-signing issue with the house and gives it back to the original owners.

Wow, I haven’t used all caps in a blog post I think ever.  Must be an important point!

Contact St. Augustine Team for a group of Realtors that will make sure you hit all the important points.  Or just call Broker Sean Hess at (904) 386-8327.