Boca Raton, FL Real Estate Agent

Many foreign investors I am working with are building real estate portfolios with properties from South Florida and elsewhere in the states.  They are making advanced trips to find a group of professionals as their US Team.  Those professionals include an attorney, accountant, property manager and an EXCLUSIVE BUYER BROKER.

Homeowners' insurance shouldn't be taken lightly.  If you get too much coverage, you're throwing money away.  However, with too little, you won't be able to rebuild if disaster strikes.  Homeowner insurance policies can vary greatly, and if homeowners aren’t careful, they may find their claims denied when disaster strikes, according to a study to be published early next year by the University of Chicago Law Review.



Knowing what your insurance policy covers -- including fire, theft, and earthquakes -- is important.  Nevertheless, knowing the things that aren't covered -- known as exclusions -- may be even more crucial.  While home insurers once used standard policy forms by the Insurance Services Office, now some are coming up with their own policies and a few tweaks in the wording can mean trouble for some homeowners, according to the study.  Homeowners should read the fine print and carefully review their policies to examine what’s covered and what’s not, the study notes.  For example, some policies include mold and lead coverage; other policies do not.  



Your homeowners' insurance policy should probably cover the following items:

<!--[if !supportLists]-->1.<!--[endif]-->The structure of your house:  Don't base the cost of replacement of your home on what you paid for it, or on the value of the land.  You're not replacing the ground around you, and construction costs might be much different from what you paid.

<!--[if !supportLists]-->2.<!--[endif]-->Your personal possessions:Take an inventory of your home's personal property, especially high-priced items such as jewelry, furniture, and electronic equipment.  Determine how much it would cost to replace everything if you lost your goods to theft or destruction.  If you think you need more than what the basic policies provide, talk to your agent.

<!--[if !supportLists]-->3.<!--[endif]-->Additional living expenses if you can't live in your home:  Additional living expenses are usually part of your standard policy and total about 20% of the cost of insuring your home.  Policies that provide for unlimited expenses for a short period may also be available, as are policies for special situations, such as renting out your home.

<!--[if !supportLists]-->4.<!--[endif]-->Liability for injury to others:  While most policies provide a base of $100,000 in insurance to cover your liability should you be sued, consider getting more: In today's litigious society, potential damage awards could exceed those lower limits in a hurry.

<!--[if !supportLists]-->5.<!--[endif]-->Get special coverage if you need it:  If you live in an area that floods frequently, you'll want to make sure your coverage won't leave you underwater in a flood. Similarly, residents in earthquake-prone areas have to weigh the added costs of earthquake insurance against the risks of being uninsured.

<!--[if !supportLists]-->6.<!--[endif]-->Consider umbrella insurance: Umbrella insurance isn't directly connected to your home.  However, if other types of insurance you have don't provide enough coverage for damages, then your home could be at risk.  Umbrella insurance provides additional coverage that makes sure injured parties won't threaten to collect by taking away your home.

You should consider homeowners' insurance to be an integral part of your overall financial plan.  It can help minimize the disruption and economic loss you would realize should a calamity strike.  

It appears there is some good news for real estate players here as we close out 2011 and approach the dawn of 2012 although it may be tenuous at best, according to a comparison of statements released by industry groups.

A study released by Deloitte Real Estate Services says the U.S. commercial real estate market “appears to be on a gradual but uneven path to recovery with increased capital availability, transactions and improved fundamentals.” However, “a potential pause in recovery momentum” exists due to the European Debt Crisis, continued high unemployment rates in the U.S. and the high rate of maturing debt levels.

The Associated General Contractors of America released a study that says private construction spending increased for the first three quarters of 2011, but investments in the public sector continue to rapidly decline.

The National Association of Realtors reports pent up demand exists “from buyers who normally would have entered the market in recent years,” and that homeowner default rates now are lower than at any time in history.

A press release issued by the American Institute of Architects says that “there has been a definitive shift away from large residential subdivisions towards smaller-scale infill development projects with a greater emphasis on affordability, access to public transportation, commercial opportunities and job centers.”

Fannie Mae's November Housing Survey, which gauge’s consumer confidence, finds that during the next year 22 percent of homeowners expect home prices to increase, 22 percent expect a decrease, and 53 percent think values will remain unchanged.

And yet another study released by credit reporting agency TransUnion finds that mortgage delinquency rates should decrease in 2012 as long as the U.S. economy continues its move into positive territory.

For now, a 30-year fixed-rate mortgage remains at less than 4 percent, but a forecast by New York based investment banking firm Keefe, Bruyette and Woods, Inc. says the rate of 10-year treasury bonds should rise in 2012 because the Federal Reserve will not purchase enough mortgage backed securities “to keep mortgage rates from rising to 4.7 percent by the fourth quarter of 2012.”

What does all of this information mean? According to BusinessWeek, “…even the worst hit markets will begin to see improvement (in) 2012.”

Homes.org recently released a list of the top 10 reasons for using a buyer's agent. The list was derived from detailed feedback provided by numerous real estate professionals across the country. After reviewing the reasons provided it became clear that the better question wasn't why should home buyers use a buyer's agent but why wouldn't they?

"HUD'S Settlement Cost Booklet, 'Shopping for Your Home Loan' advises the home buyer in Section IV on page 6: It is your responsibility to search for an agent who will represent your interests in the real estate transaction. If you want someone to represent only your interests, consider hiring an "exclusive buyer's agent", who will be working for you, " points out John F. Sullivan, Vice-President & Associate Broker at Buyer's Edge Co. Inc. "If a buyer can't find an exclusive buyer's agent in their area, they should seek a single agency licensee who is an Accredited Buyer's Representative (ABR) or an ABR with a small dual agency brokerage to minimize the chance of dual agency."

Maxwell Carr Realtor® and Designated Luxury Specialist at First Team Real Estate put it this way, "imagine sitting at a poker table, and there's $200,000 in the center of the table. You're emotionally involved, nervous - get the idea? Rather than risk making a mistake, find representation. A [buyer agent] Realtor® is a professional negotiator, with a fiduciary duty to act in your best interest."

Top 10 Reasons for Using a Buyer's Agent based on feedback from real estate professionals actively working around the country, the points below are the most important and beneficial reasons for hiring a buyer's agent.

1. It's free 
2. It's makes the home search and buying process much more convenient 
3. Market knowledge 
4. Professional negotiation 
5. Professional connections 
6. Insider knowledge 
7. Access to Comps/Sales
8.  Info Help Identifying your needs 
9. Buyer agent is a mitigator of emotions 
10. Knowledge of industry standards, legalities, and writing a contract

The past few weeks have showcased numerous signals that the real estate market is on the rise. Recent statistics point to an industry turn around, including a 15 percent rise in housing starts in September; a surge in builder confidence in October, an increase in mortgage applications, and a slew of regional market improvements across the country ].

According to sales numbers reported in September, August's existing home sales increased 3.5% vs. July's results to a 5.03 million home annual run rate. The weakest region was the West with a 13% year over year decline in prices and the strongest region was the South with a 0.8% decrease.

Wall Street Journal & Forbes recent articles claim that “It’s Time to Buy A Home”

In a recent article entitled” It’s Time to Buy That House”, the WSJ told their subscribers:

“It’s an excellent time to buy a house, either to live in for the long term or for investment income…Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.”

MarketWatch.com (the on-line blog for WSJ) told their readers:

“Now could be the best time in history to buy a home.”

Feature on Forbes.com

In a report to their subscribers, Capital Economics reported that:

“The previous declines in house prices and the more recent drop in mortgage rates to record lows have created an unusual situation in which the median monthly mortgage payment is more or less the same as the median rental payment.”

Why is this important? Last week, Forbes explained to their readers:

“If rents simply kept up with inflation at a 3.2% annual increase, a $1,500 rent payment would cost that renter nearly $900,000 over the next 30 years. The same $1,500 payment made to their mortgage would be only $540,000 (because the payments don’t increase with inflation).”

They went on to explain the advantages of homeownership during retirement:

“Even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement…

Some good information!

4 Things you might not have known about your Cell Phone.

I was sent this via email and thought I would share it with you.  I did try a couple of them and they worked, so you might want to print this out and keep it in your wallet or car.

There are a few things that can be done in times of grave emergencies. Your mobile phone can actually be a life saver or an emergency tool for survival.

Check out the things that you can do with it:

FIRST   (Emergency)

The Emergency Number worldwide for  Mobile   is 112. If you find yourself out of the coverage area of your mobile network and there is an Emergency, dial 112 and the mobile will search any existing network to establish the emergency number for you, and interestingly, this number 112 can be dialed even if the keypad is locked. Try it out.

SECOND   (Hidden  Battery   Power)

Imagine your cell battery is very low. To activate, press the keys *3370#. Your cell phone will restart with this reserve and the instrument will show a 50% increase in battery. This reserve will get charged when you charge your cell phone next time.

THIRD   (How to disable a STOLEN mobile phone? )

To check your Mobile phone's serial number, key in the following Digits on your phone:   

  * .

A 15-digit code will appear on the screen. This number is unique to your handset. Write it down and keep it somewhere safe.

If your phone is stolen, you can phone your service provider and give them this code. They will then be able to block your handset so even if the thief changes the SIM card, your phone will be totally useless. You probably won't get your phone back, but at least you know that whoever stole it can't use/sell it either. If everybody does this, there would be no point in people stealing mobile phones.

And Finally....

FORTH   (Free Directory Service for Cells)

Cell phone companies are charging us $1.00 to $1.75 or more for 411 information calls when they don't have to. Most of us do not carry a telephone directory in our vehicle, which makes this situation even more of a problem. When you need to use the 411 information option, simply dial:

(800) FREE411   or (800) 373-3411  

without incurring any charge at all.  Program this into your cell phone now.

This is sponsored by McDonalds. 

What do you do when the appraisal on the dream home you want to buy comes in below the price in the offer the seller has accepted—even as much as 10 to 20 percent below?

Chances are that raising the cash for your down payment and closing cost has tapped you out. Finding thousands more to make up the difference between the appraised value and the contracted amount is out of the question.

You’re not the only buyer who has hit the low appraisal snag. This past June and July, 16 percent of real estate pros reported a cancelation in a sale, mostly due to a large number of low appraisals.

However, you don’t have to walk away. In fact, some real estate professionals and economists say that low-ball appraisals are pushing home values down and undermining the housing recovery.

You can fight back. You have options, and chances are you can find a way to make the deal work without increasing your down payment.

Appraisals are largely based on prices recently paid for comparable local properties. Over the past decade, finding “comps” that accurately reflect values has been a challenge as values rose quickly during the boom and fell just as fast during the bust. Discounts paid for foreclosures and short sales have created a dual price structure between “normal” and distress sales.

Finally, today many buyers rely on popular online valuation tools, called AVMs or automated valuation models, instead of a comparable market analysis from a real estate professional. AVMs give fast property value estimates, but they often differ greatly from appraised values because they are determined by algorithms using available local price data, not actual inspections of the property. During this time of record low home values, it’s no wonder that more and more appraisals are coming in below prices that buyers and sellers have agreed on.

It may seem ironic that buyers would want the homes they want to buy to appraise for as much or more than they are willing to pay. Remember, the purpose of the appraisal is not to help you get a better price, but to protect your lender should you default. The lender wants assurance that your home will be worth enough to recoup their investment.

Even if you have a great job, sterling credit, an adequate down payment and money in the bank, your lender will still want a conservative appraisal. In light of losses they have taken on the millions of foreclosures in recent years and the tough times many banks have had on Wall Street, lenders are taking no chances these days. They are more interested in protecting themselves from a loss than they are in giving you a loan.

Here are five steps you can take to save your dream home:

1. Get the seller to lower the price. By far, this is the easiest solution, especially if your appraisal comes in less than 10 percent of the contract price. Obviously, a lower price is a great idea for the buyer, but why would a seller go along? In July, 2011 the average home in America took about 88 days to sell. Demand is soft and time is money. Your seller, particularly if they are selling to buy another home, could be in a real bind if you are forced to back out and they have to put the house on the market again. After all, there is no guarantee that if you walk away, the seller won’t receive a low or even lower appraisal from the next buyer’s lender. Today, many buyers are offering incentives to sellers, such as payment of some or all closing costs. Lowering the price might be a cheaper option for the seller in order to get the deal done on time. Sometimes a bird in the hand is best.

2. Ask the seller to offer to carry a second mortgage for the difference. This solution doesn’t cost the seller anything but the buyer incurs greater debt. If the buyer really wants the home but cannot come up with the difference in cash, making payments or a lump sum payment at a later date to the seller is an option. After the escrow closes, sellers often retain the right to discount the second mortgage, and can sell it for less than face value to an investor.

3. Do your research and dispute the appraisal. Is the contract sales price a fair assessment of the property value based on a well-prepared comparable market analysis (CMA) from your real estate agent as opposed to an online AVM? Was the appraisal done by an appraisal management company that may have used a less-than-expert or out-of-town appraiser?

Disputing the appraisal may sound a little aggressive but you might be the victim of a poorly prepared appraisal. Do some research first and go to war if you have the ammunition.

You have the right to get a copy of the appraisal from your lender and to find out who did it. What is the appraiser’s reputation? Have any complaints been filed with your state appraisal licensing agency? Where is the appraiser based? Did they perform an appraisal in a housing market that they may not know well? Did the appraiser have adequate information about the subject property? If your appraisal was conducted by an out-of-town appraiser unfamiliar with your market, you have every right to demand a new appraisal.

What comparables did they use? Ask your agent and the seller’s agent to put together a list of recent comparable sales that justify the agreed-to sales price. Submit that list to the underwriter and ask for a review of the appraisal. Also, ask the agents to call the listing agents of pending sales to try to find out the actual sales price of those properties. Listing agents do not have to disclose the sales price, but many are happy to help because they could find themselves in the same situation. Pending sales are more current and are not closed, so the original appraiser would not have access to them.

The key to a successful dispute is data. You will need as much data you can get to back up your dispute.

4. Ask the lender for a new appraisal. Should you find that you have a good case that the appraisal wasn’t fair or accurate, ask your lender for a new appraisal, which you may be charged for.

Another strategy is to get two additional, unbiased appraisals and use the average of all three to arrive at a fair price. This is a risky strategy, in light of the fact that another appraisal might not come in higher than your first; it might even be lower if values have fallen.

Depending on how convincing your argument is, your lender has the ability to override the appraisal estimate, which is unlikely, or to order a new appraisal, which is more likely. If a new appraisal is ordered, talk with your agent about somehow splitting the cost with the seller. Perhaps the listing agent and selling agent will split the fee so the buyer does not have to incur additional costs associated with the transaction. Appraisals cost around $400 or so.

5. Get your own, independent appraisal. If you order your own appraisal and your loan is an FHA loan, ask the lender for a list of approved appraisers. Usually the bank will review your appraisal and ask the previous appraiser if they agree or disagree with the newly submitted one.

If the first appraiser disputes your appraisal, the bank may request a third appraisal done by another appraiser, or they may just reject your appraisal.

However, if the first appraiser agrees with the disputes you present, they may adjust their original appraisal and you may get a better price.

If these tactics fail and you cannot make up the shortfall in the appraised value, you may find yourself moving on. If so, be sure that you were protected by a contingency clause in the sales contract, stating that the transaction can be terminated if the home doesn’t appraise at, or above, the sales price.

Below is a list of some of the most common issues that arise when applying for a mortgage:

Taxes & Insurance - make sure to find out what the lender is using for taxes, insurance, and association dues when looking at properties to ensure accuracy.  If they come in higher than what is being used the loan can be denied.  

Seller Seasoning - Some lenders require that the Seller own the property for at least 90 days unless it was a bank disposition company. On an FHA loan if the property is being sold between 91-180 days for more than 100% of what the seller acquired it for a 2nd appraisal is required.

Condos - if the building's delinquencies are over 15%, there is pending litigation, one investor owns more than 10% of the units, there is not enough Fidelity Bond Coverage, not enough in reserves, over 50% of the units are investment properties, etc., it may make the condo ineligible for financing.

PUDs - if the property is located in a PUD ( planned urban development)  lenders may require a copy of the master insurance policy with $1 million in coverage.

Kitchens - most lenders want the kitchen to contain kitchen cabinets and a sink. The underwriter will look to see if the borrower has sufficient assets to purchase the appliances needed and if they don't the underwriter may require them to exist in advance of closing.

Deposits - Lenders need to prove where any and all deposits came from so if your deposit is presented in cash and you cannot document where it came from...don't use it. For the most part if it is  not from your compensation, a gift from a relative, or a transfer from another account you have, don't apply for a loan.

Declining Income - Lenders tend to income average commissions, overtime pay, bonuses, and self-employment income over 2-3 years. However if your most recent tax return shows declining income from the previous year then the lender will qualify you based on the lesser of the two. 

Paystubs - if there are payroll deductions that are not reflected on the credit report it could create another reduction in income.

Credit - don't pay off, pay down, take on new debt, or do anything with your credit unless speaking first with your mortgage professional.

Lastly, the 4 C's are always needed - Credit, Cash (Assets), Capacity (Income, & Collateral (the property). You cannot have one without the other. The borrower must qualify with the first 3 C's and the property must qualify too.

A sluggish housing market has caused millions of homeowners to lose their home to foreclosure, short sale, or deed in lieu of foreclosure. But once these former homeowners get a better handle on their credit, how long do they have to sit on the sidelines until they can secure future financing to buy a home again?

As an article in The New York Times notes, “there are plenty of asterisks and conditions” when it comes to how long a borrower must wait after a “significant derogatory event,” like a foreclosure or short sale.

In general, however, The New York Times reports that the longest wait to buy again will come if there is a foreclosure in the former homeowner’s past.

Fannie Mae and Freddie Mac have a three-year waiting period following a foreclosure, and a two-year wait following a short sale, deed in lieu, or discharge or dismissal of bankruptcy. However, if borrowers can justify that the circumstance for the foreclosure or bankruptcy occurred because of an illness or job loss — or other “extenuating circumstance” — that may help reduce their wait. But with no such extenuating circumstances, these former homeowners may have to wait longer, even up to seven years following a foreclosure or four years after bankruptcy, the article notes.

For loans insured by the Federal Housing Administration, borrowers with perfect credit afterwards also will, in general, have to wait three years after a foreclosure and two years after a bankruptcy is discharged, The New York Times notes.

Following a short sale, borrowers will have to wait three years to secure another FHA loan — however, there are plenty of exceptions. Borrowers will have to wait three years if they were in default at the time of the short sale and had no extenuating circumstances. However, if the borrowers were on time with all their payments a year prior to the short sale, they may have no wait at all and might even qualify for an FHA loan immediately.

“The key is to avoid the foreclosure,” Andrew Wilson, a spokesman for Fannie Mae, told The New York Times. “That is what will help you be eligible for the shorter period.”

There is good news for military personnel who own Florida real estate.  Voters in the sunshine state approved a constitutional amendment during the November elections that will allow service members to save on their property taxes.

According to a Jacksonville.com article, service members deployed outside the U.S. who are part of Operation Enduring Freedom, Operation Iraqi Freedom or Operation New Dawn may take advantage of the tax exemption. In order to receive the benefit, military members must file with their county’s property appraiser. It is reported that approximately 150 Duval County residents have applied for the exemption as of mid-June.

The amount saved is correlated with the amount of time the service member spent deployed the previous year; the longer one’s deployment was, the greater their exemption will be. For example, service members who served overseas for six months during 2010 will save 50 percent on his or her tax bill.  The exemption is also in addition to the homestead exemption available to all Florida residents.

The law stipulates that the balance of the money saved is applied to the next year’s bill, so residents will see the credit applied to their 2011 property taxes.