Daily Real Estate News | Friday, September 23, 2011

Prices are rising in Florida: Florida cities have had the largest year-over-year increases in average list prices, according to the latest real estate data from Realtor.com. Florida cities make up 9 of the top 10 places for highest year-over-year list price spikes, based off of August data of 2.2 million listings in 146 markets.  Nationwide, the average list price is $320,325, up 2.36 percent year-over-year.

Here are the top 15 cities boasting the highest percentage of year-over-year increases in average list prices.

1. Miami
Average list price: $640,332
Year-over-year increase: 27.4%

2. Fort Myers-Cape Coral, Fla.
Average list price: $443,570
Year-over-year increase: 26.27%

3. Central-Fla.-RSA
Average list price: $405,809
Year-over-year increase: 19.41%

4. Punta Gorda, Fla.
Average list price: $267,066
Year-over-year increase: 16.37%

5. Macon, Ga.
Average list price: $193,520
Year-over-year increase: 15.98%

6. Sarasota-Bradenton, Fla.
Average list price: $466,785
Year-over-year increase: 15.86%

7. Naples, Fla.
Average list price: $713,087
Year-over-year increase: 15.13%

8. West Palm Beach-Boca Raton, Fla.
Average list price: $591,895
Year-over-year increase: 14.68%

9. Ocala, Fla.
Average list price: $193,360
Year-over-year increase: 12.07%

10. Lakeland-Winter Haven, Fla.
Average list price: $181,409
Year-over-year increase: 11.48%

11. Oralndo, Fla.
Average list price: $319,419
Year-over-year increase: 10.56%

12. Portland-Vancouver, Ore.-Wash.
Average list price: $314,537
Year-over-year increase: 10.52%

13. Boise City, Idaho
Average list price: $212,588
Year-over-year increase: 10.43%

14. Springfield, Illinois
Average list price: $174,537
Year-over-year increase: 9.12%

15. Shreveport-Bossier City, La.
Average list price: $211,414
Year-over-year increase: 8.34%

For Sale

These days everyone is looking for a great deal. We probably have all seen on the television, “This mansion sold in 2004 for 8.25 million and just one month ago sold for a 2.25 million.” Maybe not that great of a deal but seeing stories like this leads us to believe that we should all be taking advantage of the next “deal.” Well maybe and maybe not.

The market I follow which is Anna Maria Island and the surrounding areas are a bit different. Sure, Anna Maria Island Real Estate has our fair share of bank owned properties better known as REO which stands for Real Estate Owned. But, it is a much different story on our tiny little island. Where most of the nation sees more than 25% of its for sale inventory being REO, we on the island range between 5% – 9%. For a risk tolerant buyer that wants to live on Anna Maria Island the reward can absolutely outweigh the risk and especially if you have performed a renovation yourself in the past. Below are my top ten list of things to know for REO buyers. Of course this does not cover all the risks and this should merely be used as an aid and I always, always suggest using a local attorney to help through the shark infested waters.

#10) Hire a local real estate professional. Don’t use aunt Ruth who has a full time job but dabbles in real estate on the weekends in another area of the state. You need to use someone that is burning through alot of transactions every year and has a vast array of resources that will be suggested. Who is a good attorney, building inspector, mold inspector, banker and there are many more. You want a REALTOR that works through alot of transactions.  This is best because you want a diverse array of support personnel and the more transactions the more the sales person has seen who does a good job and who does not.  In an REO transaction it is more critical than ever to use someone with experience in this side of real estate.  Sure, I understand why this step may not seem transparent but just give me a few more minutes and you will see why it is here. If you need help finding a good real estate professional check out my blog, top 8 key’s to real estate success.

REO for sale

#9) Hire a good local attorney. Use your real estate professional for guidance if need be. They know who is handling bank owned properties and who will do a good job. If your real estate professional cannot give you a few to call then I suggest you find a new real estate professional. You need a good real estate attorney to help with the title search. Most banks make no guarantee of title.   To put it as plainly as I can, do you want someone 3 years after owning your REO home to come knocking at your door telling you owe them $35,000 for the roof they put on 4 years ago?   Worst yet, banks make no claim that the title is “marketable.”  This basically means that you might not be able to sell your home due to a cloud on the title.  Do you think it is important later some day to sell your home?

#8)  No prorations after closing.  In most cases this is not a huge issue but it is important to understand this especially in the case of new construction.  When property values start to go up then be sure to ask your professional sales person what this could mean in the way of your pocket book.

#7)  Most banks can back out of the contract for whatever reason they want.  Could be because it is a blue sky.  So keep this in mind as you spend thousands of dollars on mold inspections, building inspections and maybe a survey or elevation certificate.  It is not uncommon to spend $3 – $5,000 prior to closing.  Realize, regardless of how much you

Real estate treasure

 spend to prepare yourself to buy the property, the bank can back out anytime and for any reason and you have no claim on the funds spent to prepare for closing.  No refund of money.  Why – cause that is what is in the contract!  In addition, do you think as a buyer they let you back out for any reason?  No way!  Most banks will allow you a period to inspect the property.  Some REO contracts have no contingency period and if that is the case proceed very very carefully and I suggest consulting your attorney.  Consider your deposit up for risk.  Why?  If you put $20,000 down as an escrow deposit and you find the home is ready to fall down and is now worth $200,000 less,with no contingency to back out which would you rather lose?  $20,000 escrow or $200,000.

#6)  Banks will almost never disclose anything regarding the property.  This means as a buyer you are walking around in the dark and have absolutely no idea about any pre-existing conditions.  Most banks will allow you a period to inspect the property after the contract for sale is signed.  If the contract has no contingency for an inspection consult your attorney and be very very careful prior to signing the contract.   Consider your deposit up for risk.  Why?  If you put $20,000 down as an escrow deposit and you find the home is ready to fall down and is now worth $200,000 less than it is worth with no contingency to back out which would you rather lose?  $20,000 escrow or $200,000.  By the way, most banks have a clause in their contract that says they can grab your deposit immediately even if there is a dispute.

#5)  Undisclosed tenants.  This is a doozie.  If there are trespassers or squatters in posession of the property it will be your responsibility to evict using an attorney.  This takes money and time, all of which is a limited resource.  In addition, most contracts state that if there are any security deposits or last month’s rent on hand that will be the REO buyers responsibility.  This all equates to hiring the right building inspector to review the property does not have any evidence of squatters, etc.

#4)  Cannot sue the Bank. This is one of the toughest that will should require strong re-consideration.  Sure you can sue anyone but most contracts require the buyer to reimburse the lender for any costs they incur due to the suit and most require a penalty if the buyer violates the covenant not to sue.

REO Value

#3)  Avoid addenda that states the buyer will take title of all liens, easements, encroachments, assessments and eliminate all obligations of the REO lender to remedy any of these issues.  If you have not already hired legal counsel to help and you see this in the contract for sale do yourself a favor and PRIOR to signing the contract get legal counsel to help.  You will need a contingency time for someone that you have hired to be sure none of these pre-existing conditions exist.  If there is a lien on the property from the local government due to uncut grass  or garbage in the yard of $150,000 and language is in the contract as stated above then you as the buyer will be required to remedy the situation.  Feel like paying an extra $150,000 for your property.  This happens every day and we have seen higher fines than this on Anna Maria Island!

#2)  Read the contract. This may seem obvious but I cannot tell you how many times I have heard buyers state I will sign the contract now and read it later. Also I have heard – I am sure my real estate professional will warn me about the highlights and low lights – NO, this is your money, your investment. Each bank uses a different contact and to read through most sale for contract paperwork, it takes a good 1 hour. So, read the contract before you sign and if you have any questions consult your attorney.

#1)  Did I mention to get help?  The REO lender will not adjust their contract for sale.  This means that you should have a contingency period for inspection of the building, title and any other concerns.  You need good legal counsel to search for title defects, assessments, easements,  you name it.   Could you try an REO buy without a good local real estate professional, probably.  Without a local sales professional your escrow deposit is at risk.  Without an attorney’s assistance there is no question that your entire equity position in the real estate transaction is at risk.  I personally would not want to lose either however it is the buyer’s tolerant to risk that will dictate how to proceed. 

If you have any questions don’t hesitate to email me or call – (941) 345-1288.    If you are in the Bradenton, Sarasota, Longboat Key or Anna Maria Island area looking for a great investment I would love the opportunity to help.  Please note, I am not an attorney and this list is not meant to be all encompassing and only a guide and REO tricks of the trade change often.

Water Barrel

and Anna Maria Island areas save money and go green.  As of late MCUCS is offering potential rebates for replacing old high volume 3.5 gallon toilets.  There is a limit to two per household but if you have purchased an Anna Maria Island investment property that needs some updating you might be able to put some extra cash in your pockets if replacing two old toilets.

In addition, MCUCS is offering rain barrels and a low low rate.  It is actually a rain barrel kit that includes a 55 gallon drum to collect rain water.  The price is unbelievable at $39 per kit.  Just go to the utilities department at 4410 66th Street West, Bradenton, Fl or call (941) 792-8811 Extension 5327

Wind Insurance

If you live on Anna Maria Island and you have a home built prior to 2002 there is a good chance that you are paying way more than you need to on wind insurance. Due to Anna Maria Island being in a wind zone most builders used methods to lower the risk of wind damage when constructing homes. Just yesterday I visited a home built prior to 1965 and the home was eligible for at least a 25% reduction on their wind insurance.

Lets first discuss the details of what an Anna Maria Island, Sarasota, Longboat Key or Bradenton home owner should look for. First thing is to review the openings in your home. Have the windows and doors been updated since the home was constructed? If so, there is a good chance the wind rating on your openings are much improved compared to the rating the wind insurance company has used when calculating your wind insurance premium. There are a few more details that can help your wind insurance premium, is your under-layment for your roof plywood and secured with 8d nails? Do you have a newer roof with secondary underlayment and a hip or gable roof? If yes you are probably eligible for a insurance discount.

Lastly, the most important search of all. Go up to your home’s attic where you

Clips = Discount

can see the rafters. Review how your roof rafters are tied into the walls of your home. If you can see metal clips that are nailed into the rafter better tying the rafter to the exterior wall then you have a very high chance you are eligible for a wind insurance discount!  See diagram to the right.

Unfortunately you cannot just fill out a form and send it to your insurance agent and expect your discount. However, it is still pretty easy. Call a wind mitigation expert and they will come out and in a half an hour the wind construction expert will have everything they need to send in a report for your property. I have a great contact that will guarantee a discount on your wind insurance after their inspection or the $100 inspection fee will be waived. Just contact me for additional information.

So, climb up in your roof and check for tie straps. If you have tie straps contact me for a wind mitigation expert and lets get your wind insurance reduced. One other aid is the State of Florida wind survey that helps give you a guide of how much you could save on wind insurance.

Lead Guidelines

tougher for property investors all across the United States.   The EPA has enacted a guideline in section 402 (c) (3) of the Toxic Substances Control Act (TSCA) that requires qualified contractors to work on property constructed prior to 1978. 

The TSCA focus much of their attention on lead-based paint hazards that are created by renovation, repair, painting activities, etc.  The new guideline is set to go effective April of 2010.  The targeted housing is mostly related to children facilities as well as Commercial buildings constructed prior to 1978.  Unfortunately there is one other area that is affected that plays a very large part of Anna Maria Island Real Estate.  Buildings which are planned to be leased require a certified trained general contractor.  This of course correlates to larger costs for Anna Maria Island property investors. 

If you plan to paint very small areas of your Anna Maria Island investment property then you are probably fine.  Check the guideline to be sure at last check it was 6 square feet per room.  So the bottom line, if you are planning to purchase an investment property that will require significant renovation, plan to rent it and was built prior to 1978, then be sure PRIOR to purchasing you receive a few quotes to be sure your renovation doesn’t cost significantly more than you planned.  The extra cost is yet to be determined but keep it in mind. 

For more information on the exact language used by the EPA visit the informational page on this new guideline.  Of course if this all seems overwhelming then please feel free to contact me for more information.  I would love to help find your “peace” of paradise on Anna Maria Island, Bradenton, Sarasota or Longboat Key or just answer a few questions.  For that matter contact me for any Florida area as my work with the best of the best Real Estate professionals in the Florida Leadership Academy will allow me to refer you to someone that will be sure to help! 

Check renovation costs

More details on the second floor Bradenton Condominium… The enclosed lanai opens to wonderful tropical landscaping. The condominium complex has tennis courts, pools, and plenty of sidewalks. Property includes one carport and includes furnishings. Kitchen is equipped with newer appliances including a ceramic top stove with built in stove fan and microwave. Tons of closet storage, outdoor storage and big master bedroom with attached bath. Just minutes from lots of shopping and gorgeous white Anna Maria beaches. Lowest price on market and ready to move in. Price has just been reduced, act now before it is too late.

For more information on this fantastic condo please give me a call at (941) 345-1288. I am a Real Estate Professional with Island Real Estate of Anna Maria Island, Inc

News and Information

There is some fabulous news for Florida home owners. More specifically, Anna Maria Island vacation home owners and potential buyers of Anna Maria Island Real Estate.

Firstly, HB 521 was passed which puts the home owner in the drivers seat when appealing assessment values of their home. Currently the burden of proof lies with the Anna Maria Island home owner to prove the property assessment is incorrect with Ken Burton Jr. Not any more. Bill HB 521 changes the burden of proof to be on our local tax assessor to prove their estimated value is correct.

Florida Realtor Days

I had the opportunity to attend the Great American Realtor days in Tallahassee, Florida. I cannot say I enjoyed the drive from Anna Maria Island although I did have the chance to visit a few towns I have never had the pleasure of visiting. The most interesting visit was a small fishing village just North of Tampa called Cedar Key. Cedar Key is a very small village with the closest grocery store being 30 miles away. Their real estate has started to pick up in the last month and the realtor I spoke with proudly stated there were 2 contracts pending for her office which has not happened since 2006.

The Florida Association of Realtors (FAR) has the event very well planned. One meeting prepared the ~1000 real estate professionals with the talking points of our visits with our local representatives. Some of our highlights of the talking points were SB 1718, SB 2250, and HB 809 which was legislation to reduce the current eviction fees for landlords of $265. In addition, we worked to be sure our representatives knew we supported HB 7057 and SB 532 which limits the growth of property tax assessments on businesses, second homes, and non-homesteaded properties to a cap of 5% annually. Finally the last legislation that caught my eye was legislation that supports a “preponderance of evidence” for challenging property tax assessments. SB 1006 and HB 521 changes the philosophy of property owners challenging their assessments. Instead of a property owner proving their property is lower in value, the local tax collector must prove the value of your property is correct. There is a subtle difference between the two but if passed it could make a large impact on the ease of fighting your property value estimates. The above links for each individual bill is a link to the progress of each bill in Tallahassee. In addition for a list of more legislation visit FAR’s website.

Realtor Days - House

Our local boards made appointments with our local representatives so we could have about a half an hour with them during their open session. While the Manatee board chose not to attend the Great American Realtor days, (GARD) I was able to attend a few very well run meetings with the real estate board from Naples and they were a well oiled machine. It was very impressive.

Lastly I was able to attend the open session of legislation in Tallahassee. The most interesting point was while our political representatives were discussing legislation points there was a “circus” occurring on the political floor. Pictures being taken and conversations occurring were just a few of the activities taking place as the politicians voted on legislation. It is difficult to understand how our politicians can be productive in open session when a “circus” is occurring on the floor but I have always learned not to judge a book by its cover…

Part of 2009 Florida Leadership Academy

FAR has a lunch and dinner networking function that is fabulous. Wonderful food and wonderful company. The event was closed out with Cynthia Shelton and Charlie Christ giving a speech to the Florida Realtors on hand. Cynthia quoted some staggering first quarter real estate results for areas of Florida. Cape Coral, Miami-Dade, Naples, Tampa were among the few quoted with real estate transactions for the first quarter up more than 20% with some as high as 80% more transactions versus the first quarter of 2008. Unbelievable…Now is the time to buy!

Thanks to Cookie Douglas for the photo while our politicians were in session. She specializes in Fort Myers real estate.

2009 Florida Leadership Academy