SPRUCE IT UP!

Home Staging: Home Staging is the preparation of a home to sell by a professional who specializes in this form of decorating.

Most home sellers cannot view their home objectively, and many successful realtors do not have the time or resources to properly stage a home. A professional home stager has the time and objectivity to view the home as a product, and the ability to highlight the home's assets and downplay its flaws.

Cindy Robertson, Real Estate Staging Professional, joined Camille in 2007 and they have been working together in staging and selling homes. The National Association of Realtors states that:

• 96% of realtors say that buyers react better to fully staged homes than to vacant homes
• 94% of realtors say that fully staged homes sell much faster than vacant homes
• 68% of realtors say vacant homes take twice as long to sell as fully staged homes
• 94% of realtors say vacant homes sell for less money than fully staged homes
• 63% of realtors say a vacant home will sell for 15% less than a fully staged home

In addition to home staging, Cindy offers a variety of services to the potential home seller, such as
• In-house consultation to determine the seller's unique situation
• Work with homeowner to sort thru and decide what to discard before the move
• Oversee the move day and unpack at destination

Cindy is a licensed Home Staging Professional thru RESA PRO
Real Estate Staging Association.

Contact Information:

http://www.spruceitupdesign.com/

cindyspruceitup@gmail.com
954-214-6995

OPPORTUNITY KNOCKS

Lower home prices are creating opportunities for buyers like never before. Here's a look at affordability through the years.


Kelly Smallridge knows that lower home prices are good for Florida's future. "When companies consider relocating their operations to our state, housing affordability for their employees is a major consideration," says Smallridge, president and CEO of the Business Development Board of Palm Beach County. "The decline in home prices over the past two years has encouraged prospective employers to take another look at our area. CEOs want an environment that's attractive to recruiting the best employees, and housing price is a factor."


Five years ago, affordability was the major challenge facing Florida's housing market. With home prices jumping 15 to 25 percent annually in the boom years, many working-class buyers found themselves priced out of the market. At the 2006 peak, the state's median sales prices reached $248,300 for single-family homes and $211,300 for condos, according to Florida Realtors statistics.


To put those figures into perspective, buying a $250,000 home typically requires a $25,000 down payment (10 percent of the total), and a $225,000 mortgage. To comfortably meet those monthly payments of about $2,500 (including taxes and insurance), the buyer needs more than $115,000 in annual income.

Since 2006, however, the state's median sales prices have fallen more than 40% to about $140,000, putting far more Florida homes in the reach of middle-class buyers with household incomes of $40,000 to $75,000. Now that prices have stabilized in many areas, the number of transactions is rising and listing inventories are shrinking as more and more buyers take advantage of market conditions that are highly favorable to them. "The combination of adjusted prices, historically low rates and the income tax credit makes it incredibly attractive for buyers on the lower end of the scale," says Michael Wohl, founding partner of Pinnacle Housing Group in Miami, Florida.

Florida Realtor Magazine March 2010

To All Buyers in 2010

Tax Credit for New
Home Buyers in 2010:

The Worker, Homeownership and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.

For sales occurring after November 6, 2009, the Act establishes income limits of $125,000 for single taxpayers and $225,000 for married couples filing joint returns.

Tax Credit for

Existing Homeowners

The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. That is, both spouses must qualify as long-time residents, with at least five years of principal residency for each. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.

The Worker, Homeownership and Business Assistance Act of 2009 has established a tax credit of up to $6,500 for qualified move-up/repeat home buyers (existing home owners) purchasing a principal residence after November 6, 2009 and on or before April 30, 2010 (or purchased by June 30, 2010 with a binding sales contract signed by April 30, 2010).

For more information on the New and Existing Homeowners Tax Credit, go to

http://www.irs.gov/newsroom/article/0,,id=204671,00.html

It's Time to File Your Homestead Exemption

All legal Florida residents are eligible for a Homestead Exemption on their homes, condos, co-op apartments and certain mobile home lots if they qualify.  The Florida Constitution provides this tax-saving exemption on the first and third $25,000 of the assessed value of an owner/occupied residence.  While a complicated formula is used to explain this, (an additional $25,000 only applies to the non-schools portion of your tax bill), the bottom line is that the basic homestead exemption saved a Broward homeowner in 2009 anywhere from $686 to $1,015 (depending on your city's millage rate), in annual tax savings for all homes with a value of $75,000 or higher.

You are entitled to a Homestead Exemption if, as of January 1st, you have made the property your permanent home or the permanent home of a person who is legally or naturally dependent on you.  By law, January 1st of each year is the date on which permanent residence is determined.

How to Apply for Homestead Exemption:

You may file for Homestead ONLINE by going to http://www.bcpa.net/ and clicking the large yellow button in the navigation menu on the top left side of the page, or you may file by visiting either of the Broward County Property Appraiser offices listed below:

The timely filing period for Homestead Exemption for 2010 is March 3, 2009, through March 1, 2010.  However, if eligible for an exemption, you may late file for a 2010 exemption until September 20, 2010.

What You Need When Filing for Homestead:

When filing an application, you must bring the following items listed below.  To claim 100% coverage, all owners occupying the property as Tenants in Common, (i.e., proportional share co-owners), must file in person on jointly held property.  In the case of a husband/wife, (Tenants by the Entirety), or Joint Tenants with Right of Survivorship, (JTRS), any one owner may qualify for 100% coverage, although it is always highly advisable to have all eligible owner-occupants to file.  If you are married and the Deed has different last names for a husband and wife, a marriage certificate must be presented if the deed does not indicate the two co-owners are "husband and wife".

1. 
   
   Proof of Ownership:  in general the recorded Deed or Co-op Proprietary Lease must be held in the name(s) of the individuals applying for Homestead.  You do not need to bring a copy of the deed or co-op lease if the document has already been recorded in the official records of Broward County.  If the property is head in a trust, we also need either a notarized certificate of treust or a complete copy of the trust agreement.  Note:  most taxpayers prefer to use the simple Certificate of Trust form, instead of submitting the entire trust for our review, as it better protects the privacy of your estate planning and other financial matters.
   
   
   
2. Proof of Permanent Florida residence - preferably dated prior to January 1 of the tax year for which you are filing:  Florida Driver's License is REQUIRED. In addition, applicants must present EITHER a Florida Voter's Registration or a Recorded Declaration of Domicile.  If applicant is a NON-US CITIZEN:  applicant must have the items listed above AND proof of permanent residency, asylum/parolee status (or other "PRUCOL" status).
3. If you or your married spouse have a Homestead Exemption in any other county, state or country, (or an equivalent permanent residency-based exemption or tax credit, such as New York's "S.T.A.R." exemption), on another property you also currently own, you will NOT be eligible for a homestead in Broward until after you surrender the exemption in that other jurisdiction.     
   

The State-approved application form requests certain information for all owners living on the premises and filing:

• Current employers of all owners
• Addresses listed on last IRS income tax returns
• Date of each owner's permanent Florida resident
• Date of occupancy for each property owner
• Social security numbers of all owners filing (including the Social Security numbers of any married spouses, even if not named in the deed). 

For further information on this or any other real estate questions, please call me at 954-465-9804

President Obama Approves the Extension and
Expansion of the Homebuyer Tax Credit

Extends timeline; Raises Income Limit

It's a done deal! President Obama has officially signed the bill that includes the extension and expansion of the homebuyer tax credit. Here are the details:

• Provides an $8,000 tax credit to first time homebuyers
• Provides a $6,500 tax credit for repeat purchasers (those who have used previous home as principal residence for 5-8 previous years)
• Sets income limits at $125,000 for single filers and $225,000 for joint filers.
• Makes the credit available until April 30, 2010, with a 60-day extension if binding contract is in place by April 30, 2010.
• Purchase price of home must not exceed $800,000

Thanks for all you have done to help us extend and expand the federal homebuyer tax credit.


Jesse Acevedo, ABR, e-PRO
President, Realtor Association of Greater Fort Lauderdale, Inc.

Property Tax Challenges Just Got Easier

TALLAHASSEE, Fla. – June 4, 2009

Home and business owners who think their local tax bill is too high caught a break today when Gov. Charlie Crist signed a bill that makes it easier to challenge how much a property is worth. Flanked by business and real estate leaders, Crist put his name to HB 521. The bill lowers the burden of proof for owners who dispute property tax assessments to a preponderance of the evidence, a lower standard than the clear and convincing threshold they now must meet to overturn a property appraiser’s estimate. Local governments had successfully scuttled earlier efforts to lower the standard. In the just-signed version, property appraisers still enjoy the presumption that their estimates are correct, but the legislative analysts say the bill will cost local governments $157 million during the current fiscal year, increasing to $693 million a year by 2013.

Foreclosed Homes Could Become Hurricane Shelters

MIAMI (AP) – June 4, 2009

Trying to make the best of a bad situation, federal officials might use foreclosed homes as temporary housing for hurricane evacuees in Florida as soon as this summer. The proposal would keep people close to their homes and communities instead of scattering them around the country, which happened when Hurricane Katrina devastated New Orleans nearly four years ago. Thousands never returned.But the idea is still in its infancy and many questions remain unanswered, including whether the banks that own the foreclosed homes would agree to such a plan. “It makes all the sense in the world,” said Jack McCabe, a South Florida real estate analyst, who has watched tens of thousands of homes go into foreclosure. “We have a lot of vacant units available.”FEMA told The Associated Press that it might consider using foreclosed homes if hotels, shelters and other housing options are full and only for a catastrophic situation, such as Hurricane Katrina. The idea was discussed at a hurricane drill this week in Florida.Jeff Bryant, FEMA’s federal coordinating officer for Florida, said the agency will work with other federal agencies such as Housing and Urban Development and state emergency planners to see if it could be a solution.If the proposal works in Florida, it could serve as a model nationally. In April, there were 278,287 homes in some stage of foreclosure in Florida, according to RealtyTrac. The idea isn’t wholly new. About 100 families were moved into foreclosed homes after Katrina, FEMA said. “When you have a diaspora that leaves the state, it’s very hard to get those guys back. You really want to prevent them from leaving the state,” Bryant said. “We want to keep them in their same local community.”

Foreclosures fall 6 percent in May from April

WASHINGTON – June 11, 2009

The number of U.S. households on the verge of losing their homes dipped in May from April, and the annual increase was the smallest in three years. But as layoffs, rather than risky mortgages, become the main reason that borrowers default on their home loans, foreclosures likely will remain elevated this year and into 2010. Many economists expect unemployment, now at 9.4 percent nationwide, to rise as high as 10 percent, and some project it will exceed the post-World War II record of 10.8 percent.Foreclosure filings fell 6 percent in May from April, according to RealtyTrac Inc. More than 321,000 households received at least one foreclosure-related notice last month – 18 percent more than a year earlier – but the smallest annual gain since June 2006. Despite the drop from April, it was the third-highest monthly rate since Irvine, Calif.-based RealtyTrac began its report in January 2005, and the third straight month with more than 300,000 households receiving a foreclosure filing. One in every 398 U.S. homes received a foreclosure filing last month, according to the foreclosure listing firm’s report.The mortgage industry has resumed cracking down on delinquent borrowers after foreclosures were temporarily halted by mortgage finance companies Fannie Mae and Freddie Mac and other lenders. “It would not be a huge surprise to see the numbers level off a little bit at this point,” said Rick Sharga, RealtyTrac’s senior vice president for marketing.Banks repossessed about 65,000 homes in May, up from 64,000 in April, due to big increases in several states including Michigan, Arizona and Nevada.

The Obama administration announced a plan in March to provide $50 billion from the financial industry rescue fund as an incentive for the mortgage industry to modify loans at lower monthly payments. But the effectiveness of the relief plan remains unclear, with questions lingering about how much the lending industry will cooperate. Many housing counselors say it hasn’t made much of a difference so far. In Florida, one in every 148 households received a foreclosure filing. Rounding out the top 10 were Arizona, Utah, Michigan, Georgia, Colorado, Idaho and Ohio.

Chinese Drywall

After hurricanes, foreclosures and dizzying price declines, contaminated drywall from China is the latest hardship facing homeowners. Not all Chinese drywall is bad, but as many as 36,000 homes in Florida and 100,000 nationwide may contain defective wallboard, which can give off a sulfurous “rotten egg” odor, tarnish metals and ruin appliances and electronics by corroding pipes and wires.Complaints in Broward and Palm Beach counties generally have come from Parkland, Pompano Beach, Davie and communities west of Delray Beach and Boynton Beach. But local officials fear the problem is more widespread. Scores of bank-owned houses and condominiums may have the defective drywall and the lenders don’t know it because no one lives in the homes.Homeowners insist the drywall is making them sick, causing nosebleeds, headaches, sore throats and respiratory issues. State and federal agencies have yet to determine whether the wallboard poses a health threat. The Florida Department of Health is waiting for results after testing the air quality of a house in Parkland last week.Most complaints involve homes built from 2002 to 2006 during the housing boom that caused a shortage of materials. Builders then began using imports. Homes rebuilt after the busy 2004 and 2005 hurricane seasons also are at risk for the defective drywall.

Rainy Day Fund for Real Estate Investors

Clifford A. Hockley

In these economic times we all need to consider whether or not we have enough money set aside to cover our expenses. Many financial planners suggest three to six months pay as a good guideline.

As a real estate investor, setting aside a reserve fund is always a good practice. Not only is the economy unpredictable, so are the weather and your tenants. How do we evaluate how much to set aside? Let’s review some of our risks.

Economy

In an economic downturn real estate investors are faced with high unemployment, unpredictable interest rates and lack of financial liquidity, none of which we could have forecast. Inevitably, the lack of work means landlords lose tenants as tenants lose their jobs. Layoffs also mean that people are moving in together. Together these challenges mean that there are fewer tenants. This means a higher vacancy rate and, landlords will inevitably lower their rent and offer rent concessions in order to keep cash flow coming in. This rent reduction means lower returns for investors. This occurred in 2002 and is now occurring in 2009.

Weather

Worldwide, buildings are at risk for tornadoes, hurricanes, typhoons, summer storms, flooding, freezing, very hot temperatures, sandstorms, and snow storms; which then create downed trees, power outages, roof leaks and building envelope failures. These weather challenges create building repairs that may necessitate the use of insurance for repairs. Cash needs occur when an owner has high deductibles or the insurance will not cover a claim.

Tenants

Tenants are not always gentle with the use of their living spaces. Some tenants are victims of domestic violence, which may cause property damage; other tenants may not be familiar with the correct etiquette for living in an apartment and caring for the property and they can inadvertently damage the property. Finally, rental units are designed to cater to people who are in transition. Tenants tend to move in and out and this constant turnover causes damage to properties.

Other Risks

Of course, there is the unexpected. We see fires set by vagrants, people crashing cars into buildings, children getting behind a wheel of a car and losing control. We see electrical fires caused by mis-wiring, old wiring, electric blankets that short out for example. We also see plumbing that fails due to poor installation or electrolysis. Finally, we are also constantly faced with governmental agencies setting new standards for landlords. Examples here include; increased inspections of drywells, inspections of properties to make sure they comply with the American with Disabilities Act, continual code changes and currently a strong governmental push to reduce the use of electricity.

Regular maintenance and operations needs

We have major property expenses that need to be addressed as part of regular operations, such as tenant improvements, leasing fees, building renovations, pests control and other capital expenses.

Insurance and bank reserves

Many of the above risks can be insured for, so that when a huge expense occurs you have the ability to find some help. In addition, some financial institutions set aside a capital reserve as part of your loan structure, to help an investor overcome these challenges.

Rainy day fund

At this point you are probably saying, “Why invest in real estate there is too much risk.” As my father in law Sid Bluestone used to say, “There is risk when you walk across the street”. So how do we adjust? We review all of the above risks. When we buy a property we take the precautions to try to eliminate risk. We hire inspectors to make sure a property is built to current code, and that everything works. We hire engineers to make sure we do not have environmental hazards. We review the history of a property and see how it has operated in the past.

We learn from others, previous investments and underwrite a property conservatively. We buy insurance for huge risks and we screen tenants carefully to make sure we are not buying ourselves a headache. Finally we set aside some money to self insure. No one can forecast all of the expenses a property might have. So we self insure with a rainy day fund. We make sure we have at minimum a couple of mortgage payments, a couple of insurance deductibles, and some extra cash for those unexpected things. In that way when we go to sleep at night we know we have built a buffer that will help us buy time as we adjust to any of the risks we will encounter.

Don’t stop to think, start your rainy day fund today.

Here are some tips how to get started:

Put found Money aside

• Tax refund
• Insurance refund
• Laundry money from the vendor who is giving you an advance on your laundry room
• Repairs that come in under budget
• Put money in a money market fund
• Fund the reserves starting with analyzing your major repairs (maybe roof and asphalt), estimating the remaining life of the component and setting aside some of the $ every month.