The Real Estate industry is an ever-evolving entity in our time. Keeping up with it's fluctuations can be intimidating. Let's keep ourselves informed!

Wednesday, October 31, 2007

Homeowners' guide to property-tax amendment

BY MARY ELLEN KLAS
meklas@MiamiHerald.com

Of the four parts in a property-tax amendment up for a Jan. 29 vote, portability has the potential to affect homeowners the most. Key questions about it:

• Q: What is portability?

• A: The ability to transfer to a new home accumulated property-tax savings tied to the Save Our Homes law. The taxable value of a homestead can rise no more than 3 percent a year -- even if the real market value of the home is higher. Over a period of years, the market value of the home may be higher than its taxable value. That's called the ''differential.'' Under the amendment, that amount can be transferred to a new home so you pay less tax.

• Q: How can I find out the differential for my home?

• A: On Miami-Dade property-tax statements, subtract ''taxable value'' from ''market value'' to get the differential. In Broward, subtract ''taxable value'' from ''property assessment value.'' In Monroe, subtract ''taxable value'' from ``just value.''

• Q: How much savings can I carry to another home?

• A: If you buy a more expensive home, you transfer all of your benefit up to $500,000. For example, if you sell a home with market value of $600,000 and taxable value of $300,000, your differential is $300,000. If you then buy a new home with market value of $700,000, your taxable value would drop by the differential, $300,000. So your taxable value would be $400,000 your first year in the new home.
If you buy a lower-priced home, you transfer a percentage that matches your current benefit, up to $500,000. So if market value of your current home is $600,000 and your taxable value is $300,000, your differential is $300,000, or 50 percent. If you sell it and buy a new home for $400,000, you may transfer $200,000 -- 50 percent of the new home's market value. Your taxable value would be $200,000 the first year.

• Q: How much will my taxes increase on my new home in the future?

• A: You will still be covered by Save Our Homes, which means taxable value will grow no more than 3 percent each year.

• Q: What if I've never owned a home in Florida?

• A: You're at a disadvantage. But once you own a home, you will accumulate Save Our Homes benefits and can transfer them to another Florida home.

• Q: Do I get the benefits of portability only if I sell after the amendment passes?

• A: No. If the proposal passes on Jan. 29, you can get the benefits if you sold your home anytime in 2007, as long as you get homestead exemption on your new home by Jan. 1, 2009.

• Q: If I sell my home, do I have to buy another main home right away to transfer my tax savings?

• A: No. You will have two years to transfer savings.

Crist takes tax pitch to a Kendall home


In his first stop during a statewide sales pitch to sell a property-tax constitutional amendment to the voters, Gov. Charlie Crist showed up at the Kendall townhome of a public school teacher Wednesday, promising more relief to come.

Tuesday, October 30, 2007

Property-tax measure heads to voters


TALLAHASSEE -- Outmaneuvered and out of time, the Florida House railed for hours against a scaled-back property tax plan -- only to pass it Monday evening because the state Senate all but forced the vote in the waning hours of the lawmaking session.


Now Florida voters will have to decide Jan. 29 if it's enough. It will take 60 percent of the vote to pass.

Time to refinance is now


Even if your loan isn't going to reset in the near future, there are good reasons not to wait. Sinking home values eat into your equity, making it harder to get a new loan.

Monday, October 29, 2007

Senate tax plan: Take it or leave it


The state Senate released an 11th-hour tax plan that has small savings and a big political gambit for the House: Should it take it or leave it -- and risk having no tax cuts at all?

Thursday, October 25, 2007

Home prices now falling in Broward

September existing-home sales offered more of the same: drooping sales in a slumping market. But falling prices in Broward gave some hope that sellers may be getting serious about finding buyers.

Monday, October 22, 2007

Florida House pushes for stronger property tax cuts

In addition to portability – which the governor, Senate and House already advocate – the updated House proposal includes a 5 percent assessment cap on commercial and non-homestead property. The cap applies to properties, so a change of ownership would not change those taxes under a new owner, giving non-homestead property owners a degree of stability and predictability.

The House also advocates a new homestead exemption. Instead of doubling the current $25,000 exemption, the plan would guarantee a minimum Save Our Homes exemption of 40 percent of a county’s median home price. House leaders believe this will provide relief to not only new buyers but also those who have purchased in recent years.

Saturday, October 20, 2007

New tax plan, old pitfalls

A new House proposal for property-tax relief contains provisions that would benefit businesses -- but at homeowners' expense.

Thursday, October 18, 2007

PROPERTY TAXES - And yet another Property Tax Plan is proposed.

Legislators took votes on bills but made little progress resolving their differences over a property-tax plan that one senator said 'screws' South Florida seniors.

Tuesday, October 16, 2007

PROPERTY TAXES & Seniors




The proposal would allow people over 65 with a gross household income of less than $24,000 a year to avoid paying any homestead property taxes.

Monday, October 15, 2007

Real Estate Predictions

Prices are rolling back to around 2004 levels -- where they would have been anyway if the boom hadn't produced unusual, and unsustainable, price gains. Few will lose real money. A readjustment to normal market conditions -- a better balance between buyers and sellers -- will continue for the next 18 months. But, so far, this relatively orderly transition has not produced panic sales.

Friday, October 12, 2007

Where it's great to be a home buyer


If you're searching for property in Tampa, luck is on your side. Too many listed homes and not enough buyers means you've got the upper hand.

Want all-new appliances or $20,000 knocked off the asking price before you sign? Chances are, sellers in Tampa will be willing to comply.

The same can be said for Minneapolis, Miami and Kansas City, Mo. All three, like Tampa, currently favor buyers, thanks to an overabundance of supply and low sales rates.

Thursday, October 11, 2007

PROPERTY TAXES - Smaller property tax deal likely to pass


TALLAHASSEE -- State House and Senate leaders released the framework of a property tax cut plan Wednesday that adopts most of Gov. Charlie Crist's proposal and adds a few tweaks, giving renters a break and allowing low-income seniors to pay no homestead taxes.


The tentative deal means it likely will pass in some form by Oct. 22, now that the Legislature plans to extend the special lawmaking session on the budget through next week.

If approved by voters, the proposed constitutional amendment would save taxpayers about $2.1 billion statewide in 2008-09, but the plan would mean savings of only $240 for the average homeowner. The modest relief falls short of the Legislature's goals for deep savings but salvages their efforts to place a constitutional amendment on the Jan. 29 ballot.

Tuesday, October 09, 2007

PROPERTY TAXES - Now this is a little more like it.

TALLAHASSEE -- Gov. Charlie Crist is floating a property tax-cut plan that would give most homeowners a minimum $50,000 homestead exemption, as well as savings for businesses and first-time and new homebuyers.

Wednesday, October 03, 2007

Budget cuts, taxes and insurance burden governor


The reality is that property tax cuts aren't as big as promised, the property tax amendment he's pushed is not as popular as hoped, the economy is faltering, state tax collections are down, and the state has a $1.1 billion hole in its $71 billion budget.

The time to buy a home is now!

If you’re not seriously considering the purchase of a new home then DON’T READ THIS. Maybe you can just forward it to someone who might be interested.

When I began writing this piece I said to myself, “Keep it short. No one enjoys reading long messages they didn’t even ask for.” When I was done writing it I knew it was definitely too long, but I didn’t remove a single word. I realized that those who are truly looking for guidance in regards to what will most likely be their larges investment ever, will appreciate this article and what it has to say.

"Some men see things as they are and ask why? I dream things that never were and ask why not?" Bobby Kennedy

Is or is it not a good time to buy?

While it’s not a good time for sellers, it’s definitely a great time to buy.
Today’s real estate enthusiast is well informed through a bombardment of cyber information from hundreds, if not thousands, of different real estate websites or internet media reports on the subject. It has given way to a much more educated consumer. However, there is such a thing as information overload. Too much of anything is not always good for you and can tend to become somewhat confusing. Confusion leads to misinformation. Misinterpretation leads to mistakes.

Even though it’s an ideal time to buy a home, buyers have chosen to wait. They were first waiting for prices to come down. Then they heard property taxes were going to change, and that insurance premiums would soon drop.

Yes, we have seen how the seller’s asking prices has changed every few months. The numbers are becoming more and more favorable to the buyer. In the interim, buyers have chosen to wait it out in hopes prices will continue to drop.

Things are not always as they have been promised. We’ve seen that all that was proposed in terms of property taxes and insurance has fallen short of what we had been expecting. “Why not wait until this is resolved and then move in on the great deal?” I too would be thinking along those lines, but let’s take a closer look at all this.

Property Taxes

It was the politicians that started talking about reducing property taxes, or should I say, eliminating them altogether. Remember how they would replace it with a 2% increase in sales tax throughout the state? Well that didn’t happen. They went back and forth trying to come up with a viable solution that both side could agree on. What they came up with was a reduction of approximately $200 a year, if you were lucky. Oh sure, they’re also promising larger homestead exemptions, but that’s only if the proposal gets at least 60% of the votes (It has not yet been decided when this item will be put on the ballot). Even if it passes, you’ll need to think of what you’ll have to give up in return for the larger homestead exemptions…the “Save Our Home” 3% cap.

Who’s to say that although our homestead exemptions are larger and our taxable assessed value seems to be smaller, the millage or TRIM, which is used to calculate our taxes, will not increase way beyond our savings since there is no longer a cap protecting the homeowner from no more than a 3% increase per year.

On a more positive note, since property taxes are also directly impacted by mortgage fraud. Homeowners in neighborhoods saturated with mortgage fraud could see their property taxes reduced as law enforcement gears up for a countywide crackdown on the pervasive white-collar crime, according to Miami-Dade County Mayor Carlos Alvarez and Glenn Theobald, chief legal counsel for the county police.

Insurance

And then there’s insurance. What do we know about what’s been going on with this? Back in January, legislation was passed in the State of Florida that all insurance companies issuing policies in this state would have to reduce their premiums staring June of 2007. This would extend to all policies, new and pre-existing upon renewal. The reductions would be gauged by areas most affected by the recent requests for increase in premiums resulting in lower premiums ranging from 17% in the north to 53% in South Florida. What have we seen since June of this year? For the most part - totally the opposite. It was as early as July of this year when insurance companies again began submitting requests to the state for yet another increase in premium pricing.

Who should be addressing these issues?

It was Gov. Crist’s political platform to address Florida’s growing problem surrounding housing. Primarily taxes and insurance. As a matter of opinion, I believe he’s gotten the ball rolling and as a homeowner myself, I can appreciate that. However, there is no question that it’s hardly enough and even the Governor realizes that. Gov. Crist has begun issuing subpoenas to non-complying insurance companies and calling for hearings wanting to know why they’ve chosen not to obey “the law”. The outcome is still unclear.

Mortgages – Helpful or Toxic

Then there are the banks and their new and more restrictive lending practices. This directly affects some buyer’s ability to obtain financing for their purchase, reducing the pool of buyers even further. 100% financing is now a thing of the past. The sub-prime market and mortgage brokers with questionable credentials have taken advantage of non-existing regulatory practices against them to put buyers into homes they would not normally qualify for. In the long run this affects us all.

Adjustable rate mortgages (ARMs) offered more attractive terms for the not so affluent buyer at the time of purchase with the promise of refinancing to a more stable loan further down the road. Well now we see how lenders are no longer willing to negotiate these loans since they were originally acquired by the less credit worthy, usually at the advice of their mortgage broker. These borrowers are now left with the options of paying more as their rate adjusts or face losing their homes. This is the essence of the over inflated market we currently experience and the basis for such an accelerated rate of foreclosure.

But the Fed just dropped the rate by ½ point!

The federal funds rate is what banks charge each other for overnight loans and is the basis for everything from business loans to credit card charges.

The Fed also cut its discount rate -- the rate it charges member banks and institutions for short-term loans -- from 5.25% to 4.75%.

The Fed move will probably trim borrowing costs for business and credit card customers. However, the decision will have less of an impact on mortgage rates. Mortgages follow the Bond index and not stocks. The rate on a 30-year fixed-rate mortgage had hit 6.35% nationally in late June, Bankrate.com said. It dropped to about 5.93% a week ago, but it moved back to 6.02% today. Still very good by all accounts.

There is likely to be little immediate relief for borrowers with many adjustable rate mortgages because the rates on roughly half of these loans are tied to the London interbank offered rate (LIBOR). Libor recently jumped sharply above the Fed funds rate because of the continuing credit crunch in the markets.

Why buy now?

Before asking yourself why you should buy now. You should first ask yourself whether you are the right type of buyer. There is no question that now is the right time to buy. The market elements are in alignment, if you will, for buyers to obtain exceptional deals.

Taking into consideration the previous discussions - First off, a good buyer would not be affected nor have the need for a “toxic mortgage”. The buyer will also realize that any significant reduction to taxes and insurance is unlikely. Yes, there are some expectations, but nothing that can be determined with any degree of certainty.

Prepare yourself for several changes in the banking industry when you apply for your home loan. A credit score in the 6oo’s is favorably looked at by most lenders today as credit worthy and low risk. A good idea would be to obtain copies of your credit reports from all three bureaus and verify that all information is accurate or make any necessary corrections before applying for a loan.

Banks are also looking for the borrower to have a vested interest in the purchase by way of a down payment. This requirement will vary from bank to bank, but they’re anywhere from 5% to 10%.

Pricing has shown signs of decline. With so many properties for sale competing against each other, sellers have no choice but to slash their asking price. “Asking price” being the key phrase. Different sellers have different reasons for wanting to sell. Some are relocating, others are downsizing, and others are in total distress. In today’s market we find that most cases can relate to the latter. Therefore, an asking price is just that, what they are asking. What they expect to get in the way of an offer is totally different.

In addition to reduced pricing, sellers are offering incentives ranging from paying all closing costs, to paying association fees a year in advance, or even escrowing a years worth of mortgage payments for the buyer. These are just a few creative ways that sellers are looking to have their properties looked at first. Developers are drastically reducing their initial prices sometimes by $100,000 and in addition to that, they are also throwing in attractive upgrade packages.

If you are seriously considering a purchase, don’t pass up these great opportunities just because you heard from someone who heard it from someone else that prices are going to get better and that things will change in your favor later down the line.

If you see something you like, be prepared, get pre-approved by a reputable lender, find yourself a Professional Realtor, and walk in and make your offer. Sellers will be more than ready to negotiate with you. They will be glad to know that you have shown interest in their home let alone put in an offer to purchase. It’s probably been months since that seller has had a knock at the door or received a call from a prospective buyer. They will welcome you with open arms.

I hope this has enlightened you as to why the time to buy is now and, of course; I look forward to hearing from you if you choose to move forward. In my years as a Realtor I’ve realized that every buyer and their situation is different. Close attention is required to the individual’s specific needs in order to obtain a gratifying outcome.