Archive for August, 2012

Why Am I Paying More Property Taxes than My Neighbors?

Tuesday, August 28th, 2012

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

Did you ever move into a place, get your tax bill and wonder why you were paying more property taxes than your neighbors?

Have you lived in your home awhile and wonder why you are paying higher taxes than people who just moved in?

The reason why is called Homestead (also called “Save Our Homes” or “Amendment 10″).

Here’s how it works:

For example, a person buys a house and  “homesteads” it.

Homesteading signifies that it is their primary residence.

Homesteading gives a homeowner tax advantages (and some advantages against creditors as well).

One of the tax advantages of homesteading is that it currently exempts $50,000 off the assessed value of a home.

Why am I paying more taxes than my neighbor? Image by 401 (K) 2012.
Why am I paying more taxes than my neighbor? Image by 401 (K) 2012.

So if I buy a house today for $200,000 and homestead it, the assessed value will be stay the same, but since I get to exempt $50,000 for the homestead, my taxable value becomes $150,000.

In this example the homestead exemption saves me about $750 a year in property taxes.

The other tax advantage is that the assessed value can’t go up more than 3% a year.

The reason homesteading is called “Save Our Homes” is because by limiting how much your assesment can go up, it prevents people from losing their homes due to rising taxes.

But why am I paying higher property taxes than my neighbors…

You will end up paying more property taxes than your neighbors if your taxable value is higher than your neighbor’s taxable value.

Based on the above example my taxable value is $150,000.

If your sales price a year earlier was $210,000, and you homesteaded like I did, your taxable value would be approximately $160,000.

So your taxes would be a bit higher than mine because you paid more for your house, even though you moved in a year earlier.

And if you failed to homestead the house, or you couldn’t homestead the house (because it’s your second home or an investment property or a vacation property) then your taxable value will be closer to $210,000.  And the taxes will be based on that higher number.

But I moved in WAY earlier than my neighbor and I am STILL paying higher taxes…

Here’s where it gets weird and a bit messy due to the housing bust.

Let’s use the same example again, where I bought the house for $200,000, except instead of buying it this year I bought it back in 2005.

Well, the market crashed.

Because the taxable value of my property can never be higher than its fair market value (due to homesteading law), the property appraiser dropped the fair market value of my property.*

According to their new assesment, the property appraiser says the fair market value of my home is now just $120,000.  Taking off the $50,000 for homesteading, my new taxable value is now $70,000.

So I lost $80,000 in the value of my home, but at least my taxes dropped as well.

That may be the only silver lining in this whole thing.

Now, because my new neighbors bought their home as a foreclosure for $110,000 (and they are homesteading it), their taxable value will be only $60,000…which is $10,000 less than mine.

Even though they just moved in, because their sales price is less than the fair market value placed on my home by the property appraiser, they will pay less taxes than I will, and I’ve been in my house nearly seven years.

Can I appeal this fair market value?

Can you appeal your fair market value?

Yes you can, and if you have a legitimate case it might be a good idea because it will save you taxes down the road.

Even in this case, where the difference may only be $10,000 in valuation (worth about $150 in taxes), as the property begins to appreciate again those taxes will compound over time at a higher rate.

Another bummer from the housing bust: you lost your “portability” as well…

“Porta” what?

Portability.  Passed in 2008 as “Amendment 1″ it was designed to let you take the tax savings from your old homesteaded home to a new homesteaded home.

For example, let’s say your homesteaded house had an assessed value of $200,000 but a “fair market value” of $300,000.

This “fair market value” (also called Total Market Value or Just Value) is assigned by your property appraiser.  Fair market value is essentially the amount they would assess your property at if you didn’t have the homestead exemption.

So for homesteaded property: fair market value is what they could assess your home for if you didn’t have homestead, assessed value is the amount your home is assessed at and which can’t be raised more than 3% a year (this is also called the Save Our Homes value), and taxable value is the value they acutally tax you on after you take your homestead exemption (and any other exemptions) off your assessed value.

So you sell your house, and you buy a new house for $350,000, which you make your new homestead.

The difference between the “fair market value” ($300,000) and the “assessed value” ($200,000) of your old homestead is $100,000.

With portability you could take that $100,000 and it would become the new homestead exemption for your new house.

In other words your new $350,000 house will have an assessed value of $350,000, but then your $100,000 tax savings from your old home “ports” to your new homestead, reducing the taxable value to $250,000.

This $100,000 “port” is better than the $50,000 exemption you would have received without porting, and an additional savings in taxes.

But the market crash essentially wiped out most portability.

Since the housing market lost so much value in the bust and has gained only a little bit of it back…in other words, home appreciation is flat…if you look at property appraiser assesments it is a very rare occasion when you will find a fair market value that is higher than the assessed value (except in cases where the owner has lived in the home a very long time).

Thus, no portability.

The tradeoff is lower taxes now, instead of lower taxes in a home you buy down the road.

Confused?

Heck, it was confusing just pulling this all together and I’m in the real estate business.

But, hey, things can only go up from here, right?

*As I understand it, the taxable value of your home can never exceed its fair market value or “just” value.  However, there is nothing that compels the property appraiser to lower your fair market value.  In some counties the property appraisers have not lowered the fair market value, or not lowered it enough since the market crashed.  Resulting in higher taxes as millage rates went up.  The fix? Amendment 4 goes in front of voters this November.

Call me or drop me a line if you have questions, and be sure to Hire St. Augustine Team Realty the next time you buy or sell a house.  Email to ReQuestion@StAugTeam.com or call (904) 386-8327.

Image above by kind permission of 401 (K) 2012 under creative commons license at flickr.

 

Should I Get My Home Inspected Before I Sell It?

Thursday, August 23rd, 2012

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

Should I get my home inspected before I sell it?

Get an inspection in case this dude went to town on your house!

Get an inspection in case this dude went to town on your house!

Yes you should!

So few sellers do it, it will give you a leg up.

A lot of homes have maintenance issues that the sellers don’t even realize are there.

Plumbing issues and wood rot are probably the two biggest things that pop up and surprise homeowners.  And it’s never big stuff either.

Here are two examples from my own experience:

An outside spigot on a brick house that was never used was leaking.  It turned up on a home inspection…and because the leak was behind the brick it freaked the buyer out (they imagined cascades of water destroying the drywall and framing between the brick and the living area…and creating mold besides).

It was a tiny little problem with big consequences.  It turned out to be not such a big deal in the end but it could have derailed the deal.

Another time a homeowner had borer bees go to town on the soffet near the roof, and then a woodpecker decided to go after the bees, tearing through the soffet.

In the grand scheme of the house it was a small thing, and it was up by the eaves and the homeowner never noticed.  But a pest inspector found it and the home failed it’s wood and pest inspections until it was fixed.

So get home inspections ahead of time.  If there are minor items (or even major items) found, you’ll have time to get them fixed before the house hits the market.

And hopefully you will have clear sailing all the way through.

Hire St. Augustine Team Realty, we’ll get you through the inspection process safe and sound.  Email ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327. 

Hey, Another Broker is Advertising My Home!!

Wednesday, August 22nd, 2012

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

“Hey, that’s my home!  But that’s not my agent!”

Just troll around Craigslist sometime and you’ll see real estate ads from agents who don’t actually have the listings.

Every market has a couple of these bozos (my opinion) placing bunches of these ads every day.

Some strange person is advertising my home on Craigslist! Make it stop! Image by Gagilas.

Some strange person is advertising my home on Craigslist! Make it stop! Image by Gagilas.

Everything in these ads would indicate that the person placing the ad IS the agent to contact, EXCEPT for a tiny disclaimer at the bottom that says, “Listing courtesy of such-and-such realty.”

Is this legal?  Is this ethical?

According to Margy Grant, Vice President for Law and Policy, and General Counsel for Florida Realtors, it is neither legal nor ethical unless the true listing broker has given their express permission for the other agent to advertise the  listing.

In a video on the Florida Realtors website, Grant states, “From a legal perspective, if you place a [another broker's] listing on Craigslist and ask buyers to contact you for information you are leading them to believe that the listing is yours.  This could be considered dishonest dealing.”

On the ethical issue Grant says, “If the listing on Craigslist includes a photo downloaded from IDX [IDX explained below], you could be in violation of Article 12 of the Code of Ethics.”

So if you see an ad on Craigslist for your home, and it’s not your agent, and your agent or their broker have not given permission for the ad, file a complaint for “dishonest dealing” with the Florida Real Estate Commission.

So when can a Realtor advertise another agent’s listing?

There’s a data feed Realtors use called IDX, which stands for “Internet Data Exchange.”  IDX essentially allows any real estate brokerage (or an agent who is a member of that brokerage) to advertise listings of other brokerages on their company or agent website in the aggregate.

The term “aggregate” means a group of homes meeting a certain criteria.  For example, all the 3-bedroom homes in a certain price range or in a certain school district.

Have you ever been to a real estate website (including our own) and seen something that says “Search for Homes” or “Search the MLS?”  The homes that you see on those websites are actually IDX feeds from all the participating in brokers in the MLS.

I’ll try and make it easier to understand:

Nearly all of the brokers in the local MLS pool the date for their homes into the IDX.

Each brokerage then can put this group of homes on their own websites.

They can then advertise this “Search for Homes” feature, hoping to capture you as a buyer lead when you go to their website.

For example, all of St. Augustine Team Realty’s listings are on the IDX.  So you may go to another company’s website, do a search for homes and find one of our listings.

Why St. Augustine Team is Cool with IDX.

As the Broker of St. Augustine Team Realty I am perfectly okay with IDX because the only thing I want to do is sell our listings.  If we get the buyer, fine.  If another agent from another company finds the buyer (which is more likely anyway), fine.  Our goal is to sell the home.

Another reason we’re okay with the IDX is that the data is structured in a very specific way…nobody else can change how it is presented, in other words…and St. Augustine Team Realty is identified as the listing broker (though our email and phone number are not shown).

Why We Have an Issue With Other Agents Hijacking One of Our Listings.

Where it gets to be a problem is when some agent assumes that just because our listings are on IDX that they can take it and advertise it on Craigslist, and put a little disclaimer at the bottom, “listing courtesy of St. Augustine Team Realty.”

Aside from the legal issues that Grant illustrated above, when someone hijacks one of our listings they are not presenting it in a way we want it presented.

If they botch the presentation, change the marketing, put it on a shady website, or show a bad photo it could hurt the home’s chances of selling.

Also, if the agent has a poor reputation, which a Craigslist hijacker probably does, it might cause potential buyers to avoid the home, in order to avoid the agent who they think is listing it.

We cannot allow this.

You shouldn’t allow it either.  If you see it, file a complaint.

Hire St. Augustine Team Realty when you sell or buy a home.  Email ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

Photo of baby used by kind permission of Gagilas via creative commons.  See the Gagilas photo stream on flickr.

Tenting A House for Termites: What It’s Like

Monday, August 20th, 2012

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

Have you ever been driving around town and seen one of those homes completely covered in a tent?  What’s going on there?

Well, the only way you can treat for a certain type of termite is to fumigate the house.  And to fumigate a house you need to cover it in a tent.  My partner Kate and I show you what it looks like in the video below:

Hire St. Augustine Team Realty the next time you go to sell, even if the house is under a tent!  Email us at ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

Can I Enforce a Closing Date?

Friday, August 17th, 2012

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

Be careful, this dude may be on the other side of the closing table.

Be careful, this dude may be on the other side of the closing table.

August 2014 Update:

While banks have gotten a lot better about hitting closing dates in the two years since I wrote this, it’s still fairly common for loan packages to be late or delayed.

If it looks like you’re going to miss a closing date, be proactive, and get your extensions ready and signed ahead of time.

When it is obvious that the closing is going to run long I start trying to get that extension right away. About half work with me … the other half, well …

Objection #1 is that the buyer or seller buries their head in the sand. “Oh, the closing is going to happen. We’ll cross that bridge when we get to it.”

If your real estate agent tells you the closing is going to run late, there’s a 99% probability that it will. If you sign an extension and it closes on time, even better that you didn’t need it.

The second biggest objection–and this is the one that usually comes from the other real estate agent–is, “The seller might get upset!” or “The buyer might get upset!”

If you are going to miss the closing, you’re going to miss the closing. They are going to be upset whether you tell them now or the day before. Just do it.

Original post: August 17, 2012

I saw this question posted in an online forum the other day and just had to chime in:

“I have a set closing date but the seller is saying they need more time.  Can I enforce the closing date?”

Before I answer that question I want to set the mood with a little bit of music.  Set your way-back machine to the year 1983, pull out that cassette tape player gathering dust in the garage, and cue up Michael Jackson’s Thriller.

Do you remember the end where Vincent Price just goes to town with that extended, maniacal laugh?

Okay, I want that madman’s laugh going through your brain while I answer this question.

Be so very careful what you wish for.

The only way you could essentially force a seller to the closing table is by threatening to walk away from the deal.  And if you pressed the sellers hard enough you just might succeed.

But you see, there is a terrible reality these days in real estate where many loan packages just don’t show up on time.

It’s not your fault, it’s probably not even your loan officer or mortgage broker’s fault.  It’s just that the department that is doing your loan processing is three time zones away, the employees there are making $8 an hour, and quite honestly they could care less if your loan closed on time.  After all, they have the money, don’t they?  You’re not buying the home without it, are you?

So a really wonderful way to eat crow is to force the sellers to close on a certain date and then have your loan package delayed.  And since YOU failed to close on time, they just might ask for another week in the house in order to give YOU an extension.  They might not even need the week … they just want to see your stuff rot in a moving van while you run around trying to find a place to store it.

If the seller has delayed again and again, and you’ve given them extensions again and again I might give a different answer.

But my point here is this: a home sale is a cooperative venture between a buyer and a seller.  Inevitably one side is going to need something from the other side.  So be diplomatic.  It’s not about being right.

Hire St. Augustine Team Realty when you buy or sell, and we promise we won’t laugh maniacally.  Email us at ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

All images, video and audio not in the public domain are used in accordance with the Fair Use Law (Per Title 17–United States Code–Section 107) and remain the property of the film or photo copyright owners. Click here to pick up a collection of Vincent Price flicks on Amazon, including The Pit & The Pendulum and  The Abominable Dr. Phibes. Even the title gives me the shivers.

When It Says “Under Contract” that Means it’s Sold, Right?

Wednesday, August 15th, 2012

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

When it says “Under Contract” that means the home is sold, right?

Wrong.

“Under Contract” is just another way of saying “Sale Pending.”

Does under contract mean sold?

Well, does it?

And some pending sales are stronger than others.  So the likelihood of any individual pending sale actually making it all the way to the closing varies.

Some of the variables are the condition of the home, the strength of the buyer’s financing, the ability for the buyer and seller to work together towards solving any problems that arise, and the type of loan that the buyer’s are getting.

Sometimes you will see a home labeled with “Contingent” status.  Contingent means the same thing as “Sale Pending,” except that it has more hurdles to clear than the typical sale.

For example, an older home with a buyer trying to secure a VA loan may be labeled “Contingent.”

The reason?

VA loan appraisers scrutinize a home at a much higher level…even to the point where a home with a small patch of missing popcorn ceiling would fail the appraisal.  Since this is a hurdle most homes don’t face, the sale might be marked as “Contingent.”

Hire St. Augustine Team Realty when you buy or sell a home…we’ll get your sale “Under Contract” fast!  Email ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

How Much Money Do I Need Upfront to Buy a Home?

Monday, August 13th, 2012

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

So you are thinking about buying a home for the first time.

Before you ever contact a lender, before you ever contact a Realtor, how much money will you need to have set aside before you even start looking?

My partner Kate Stevens and I tackle this question in the short video below!

Hire St. Augustine Team Realty when you buy for the first time!  Email us at ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

Facebook as a Farm in Real Estate Sales

Tuesday, August 7th, 2012

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

In real estate sales Facebook can be described as a farm.

Down at the Facebook farm.

When I started in real estate back in 2001 at the age of 31 I was one of the youngest people in real estate in my market.

Eleven years later, I am still one of the youngest.

As the Broker and Manager of my company, it’s sometimes hard to convice the agents who are older than me that social media and Facebook are here to stay.  It can be even harder to convince them that it’s something they need to embrace if they are going to stay in business.

In real estate terms Facebook can be best described as a farm.

Back in the day most real estate agents had what are called “farms.”  A farm was a subdivision or a street that an agent faithfully sent postcards to every month, year in and year out.  Sometimes the agent would even walk the neighborhood, knocking on doors and handing out flyers, or spend an evening every quarter cold-calling.

The idea was to build trust and brand awareness with the people living in a certain neighborhood.

It was called a farm because it took awhile to plant the seeds and see sales grow.

Agents were very territorial about their farms.

Times Have Changed

In those days it was hard for consumers to get real time information on sales.  These days the information is generally free and easy to find.  So with the exception of a few diehards still mailing out there, the traditional real estate farm is dead.

Facebook has arrived in real estate to fill that role, among others.

But unlike the traditional real estate farm, the home buyers and sellers have to opt in.  They find you.  And they are no longer confined to a certain geographical area, or a subdivision.

The cool thing is that you get to see your customers’ faces now, instead of just an address on some mailing list.

The Dos and Don’ts

On a scale of 1 to 10 for exciting things to talk about (10 being the most exciting), real estate comes in at about a 1.5, barely edging funeral plot buying and whole life insurance.

So any post you make on Facebook or any other social media platform really has to be relevant to the person in the market today, it really has to answer the current real estate issues they are facing on the ground, and most of all it has to be interesting.

It also has to be transparent. 

In the first company that I worked for it was office policy that you never put addresses with the photos of the homes you were selling.  This forced the consumer to call in to get the address.  And the agent’s role was to torment these poor people on the phone, wheedling as much information out of them as they could while trying to secure an appointment.

Consumers HATED that.

If you try to hide the information behind a gate like that these days don’t expect to generate any business.

Do just the opposite instead, answer the questions as clearly and as frankly as you can.

Property vs. Opinion

The thing that will get the real estate needle to move the strongest on Facebook is a new property listing or price change.  That being said, those are things you want to add sparingly.

Think of them as the spice.  A little goes a long way, add too much and you will ruin the dish.

If you keep posting properties on your page day after day, the consumer is going to opt out after day five, thinking, “None of these properties are for me, this page is worthless.”

But if you have good content that answers their questions, they will find something of value most days and stay with you.  And the properties you do post are like an extra special look into the real world of real estate.

Keep Posting, and Keep It Fresh

Have you ever looked up a restaurant online, found their Facebook page and saw that the last post was six months ago?

The first question that goes through my mind is always, “Are they still in business?”

So if you are going to engage in social media, you have to post a few times a week.

It’s a Spint, Not A Marathon

While my company, St. Augustine Team Realty, has generated some pretty quick sales as the result of our social media efforts, it’s generally not the rule.

What I’m saying is: You Still Have to Do It But Don’t Expect Quick Sales.

Instead think of it as a place where you can build trust and brand awareness with the consumer.  Just like the old real estate farms.

Hire St. Augustine Team Realty to sell your farm, house or any other property!  Email us at ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

 

 

 

 

 

 

 

3941 Sea Eagle Circle: New Listing in St. Augustine, FL 32086 !

Monday, August 6th, 2012

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

I just listed this darling 3-bedroom house at 3941 SeaEagle Circle (technically it’s all one word) in St. Augustine, Florida’s Creekside subdivision.  Boasting a half-acre lot it’s priced at just $149,900!

Click on the photo below for a link to more information including a YouTube video and a virtual tour!

3941 Sea Eagle 32086, St. Augustine, FL

3941 Sea Eagle Circle, 32086

To get great marketing like this hire St. Augustine Team Realty when you sell your home!