Not all banks are the same

This is an updated post that I originally wrote back in 2014. I just had another instance where a large national bank dropped the ball created endless stress and expense for my buyers.

My buyers told me they were getting financing from a large bank where they had all their accounts in the mid west. I warned them that their bank may have trouble closing on time. They said they knew the loan officer for years and he assured them he could do loans in Florida.

First the bank said they didn’t need a survey. Technically maybe they didn’t but if you don’t get a survey in Florida there is an exclusion on the title insurance noting there was no survey provided and the bank’s underwriters won’t approve a mortgage with an exclusion like that on the title insurance. Someone sat the bank should have known that. I had to tell the buyers who in turn had to almost fight the bank over something they should have known.

Secondly the bank at first said they didn’t need an appraisal. I told my buyers that was really odd and they should double check with their loan officer. Then the bank decided they did need an appraisal and it was not ordered on time. The appraisal didn’t come back until almost 2 weeks after our closing date. In Florida we set a firm closing date and need to get an extension signed by all parties to extend that date. The seller was frustrated but agreed to 2 extensions.

My buyers were rightfully frustrated. They had to live in a hotel for 2 weeks and their furniture had to be put in storage. They suffered over $3000- in expenses all because this large national bank was incompetent.

Below from a July 23 2014 post.

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3 Fla. towns in top 5 for ‘affordable retirement’

SEBRING, Fla. – Sept. 7, 2018 – With 74 million members, baby boomers are the largest generation on record to retire. And if they follow previous generations, retirement will prompt them to move.

Many will head to warmer climates, but they’re also – unlike previous generations – in search of more active lifestyles too, looking for social and recreational opportunities, nearby restaurants and shopping.

“It’s going to be a tsunami when [all] the baby boomers retire,” Ken Gronbauch, a demographer at KGC Direct in Bonita Springs, Fla., told “The Southern states are going to get hit so hard. Florida’s population is going to explode.” evaluated the 500 largest U.S. metros to find where at least a quarter of the population is 60 years or older and where members of this age group generally relocated to between 2011 and 2015. The areas were then ranked by the total cost to pay down a 15-year mortgage on a median-priced home to identify the most affordable retirement havens.

The five most affordable retirement towns for 2018 include three in the Sunshine State:

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rent a house and look to buy

I was showing retirement homes to a single guy from up north, He saw a few homes he liked but friends kept telling him he should look at more cities. They told him to rent a house for a while and take his time looking.

I told him about a couple who rented in On Top of the World for a year. They wanted to be sure they liked it there. After I found them a house I said to the wife that prices had gone up a lot in that year. She agreed and thought it was a good $5-$10,000. In addition she and her husband spent another $1200 a month in rent.

A few things to think about if you think renting and looking is a good idea.

55+ communities restrict rentals most are a minimum of 6 months and landlords prefer a years lease.

Timing can be a problem. What if you find a perfect house in the first month ? Do you wait and hope it doesn’t sell right away ? Do you go for it knowing you will owe the rest of your lease ? Expect to pay a good $1000 a month in rent. Three four or five months rent is a lot if you find a house right away.

I suggested to my buyer that if he wanted to see other areas he’d be better off just driving around and staying in a nice hotel for a few days in each city. It’s cheaper in the long run than getting involved in a 6 month plus lease. He had to admit the 2 days he spent with me looking at communities and homes gave him an excellent idea of what we have here in Ocala for 55+ homes.

Low priced Ocala 55+ homes in short supply

Villas in On Top of the World

Villas in On Top of the World

We are now is a sellers market here in Ocala. Just a couple of years ago there were quite a few 55+ homes under $100,000.00. That is no longer the case. Prices have gone up and inventory has gone down. As of this posting January 2018 most 55+ homes under $100K are Villas in On Top of the World. Villas are homes attached in rows of 6-8. The Villas do include exterior maintenance, water and sewer but the $400-+ a month HOA fees are high for some buyers looking for a low priced retirement home. Today there are only maybe a dozen single detached homes in other 55+ communities. They are small around 1000 sqft of living area, 2/2 with a 1 car garage. They do have reasonable HOA fees but you need to hire a lawn guy and pay water and sewer. There are low priced mobile home communities but mobiles in Florida on rented lots are not considered real estate and I can’t sell there.

Spruce Creek Preserve Dunnellon FL

Spruce Creek Preserve entry sign

Spruce Creek Preserve

Spruce Creek Preserve is just off SR 200 in Dunnellon Fl. This is a great location because it is just a short drive to restaurants, shopping and health care in the SW 200 corridor area. Spruce Creek Preserve is a gated, 55+, golf course community.  Houses in Spruce Creek Preserve are frame with stucco or frame with vinyl siding. Homes here can range from 1,000 sq ft of living area to over 2,000 with most being in the middle. HOA fees of around $120- per month which includes the guard at the gate, clubhouse, common area maintenance, curbside trash pickup and basic cable TV. Golf is not included in the HOA fees. Spruce Creek Preserve is a very nice community that shows pride of ownership

Update 3/16 HOA fees are $121- month. Fees are very stable here and it seems like a well run association

Update 1/20/18 HOA fees are $124 month. A great deal.

Update 1/23/19 HOA fees went up to $127- month. A great value still.

Update 3/2/2020 HOA fees went up to $127- month. A great value still.

If you would like a list of homes for sale in Spruce Creek Preserve fill out my Ocala Dream Home Finder, call me or send me an email. I can set you up a Listing Cart on the Ocala Marion County MLS for Spruce Creek Preserve.

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Buy a retirement home with no monthly payments

I have to go to real estate classes to get points for my license renewal. A few weeks ago I had a free day and went to a class about how to buy a retirement home using a reverse mortgage. It was more interesting than I expected.

There is an FHA program called a Home Equity Conversion Mortgage for Purchase. With a large down payment, usually around 50%, you can buy a house with no monthly payments as long as you live in the home. There is of course a monthly charge that gradually eats up the 50% or so equity you have in your house but at the same time the house should be appreciating in value to offset that to some degree.

Why would anyone do this ? A lot of people don’t want a mortgage payment for cash flow reasons on a fixed income. Others don’t want all their cash tied up in a house but don’t want mortgage payments either. Some buyers may have a sizable amount of money from the sale of another home say $100K. However a $100K home usually needs a fair amount of work. Using a HECM the buyer could buy a much newer totally move in ready home in the $175-$200K range with no monthly payments.

What are the negatives ? You gradually lose equity in the home. The closing costs are higher than a traditional loan. The interest rate is higher too.

This isn’t for everyone. Consult your financial planner.

Ocala 55+ homes with a view

view looking down Oak Run golf course

All 55+ homes in the Ocala area are on small lots and the homes are close together side by side. Builders do this because retired people don’t want to maintain a big yard and so they can fit as many homes on an acre of land as possible in order to pay for things like clubhouses pools and a golf course.

A lot of buyers can accept a small lot if there is a view or some privacy directly in back that they see while sitting on their Lanai. There are 3 options.

A water view. This would be a very hard to find view of a pond on a golf course. There are no 55+ communities in Marion County on a lake.

A golf course view. There are quite a few homes with a view of the golf course. Builders sell these lots at a premium when new and build communities to maximize golf course lots.

A view of a wooded area. These homes would usually be on the perimeter of the community. An exception is Oak Run which unlike other 55+ was not built with parallel streets. The streets are more laid out in circles allowing more privacy.

Some times you might find some sort of hedge or planting and there are huge open drainage areas that have privacy but are not a real view in my opinion.

Other than golf course frontage I can not search on private back yards. The only way to determine this is by pictures on the MLS and the map feature which often has a birdseye view of the listing

You can only have 1 homestead deduction in Florida

This is an article about a recent court decision where a couple wanted to claim homestead deductions on 2 homes in 2 different states one being here in Florida.

Court upholds homestead exemption restrictions

 TALLAHASSEE, Fla. – March 30, 2016 – Venice Endsley and her husband, Robert, had what a court described as an “intact, congenial marriage” for more than 60 years.

In the 1980s, Venice Endsley signed over her rights to a home in Huntington, Ind., to her husband. In turn, Robert Endsley signed over his rights to a home in Lauderdale-By-The-Sea to his wife. Venice Endsley had a homestead exemption on the Florida home, while her husband received a similar exemption on the Indiana home.

But the Broward County property appraiser learned of the arrangement in 2006, leading to a dispute that resulted Wednesday in an appeals court ruling that Venice Endsley was not entitled to receive the Florida homestead exemption. In doing so, the court waded into questions about whether state law only barred multiple homestead exemptions in Florida – or whether the prohibition also addresses properties in other states.

A three-judge panel of the 4th District Court of Appeal, pointing to a provision in the Florida Constitution, upheld a decision by a Broward County circuit judge, who found that the Endsleys were a “single family unit and could not claim separate homestead exemptions,” according to last Wednesday’s ruling.

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Factors that influence a homes price in Ocala

These are factors that account for a homes price in our Ocala real estate market.

Age Homes prior to the mid 90’s do not have today’s open floor plans. Older homes are broken up more into rooms. The kitchen is a separate room from the living room as opposed to new homes where the kitchen and living room are actually a single room divided by a large kitchen island. Older homes are also more expensive to insure because they do not meet the newest building codes.

Size Kind of obvious. Less expensive homes are also smaller.

Garage Most homes here have a 2 car attached garage but smaller older homes have a 1 car garage and sometimes even a carport.

Construction Method Concrete block with a stucco finish is considered superior in this area. In most cases frame homes with stucco or some sort of siding like vinyl or aluminum  sell for less money.

Location Similar homes will be priced differently due to the desirability of the community.

Reasonable Expectations in Home Buying

I had a buyer recently who thought a home that was built in 2004 needed a new air conditioner even though it was in working condition. My buyer thought that she should deduct from the list price the cost of a new AC along with a laundry list of renovations that she needed to make the house more to her liking in determining her offer. Not only did she want a new AC but the most expensive Trane model made. I thought the home was in pretty pristine condition and it is normal for a home that age to have an original AC unit. I showed her sold comps from the past 3 months to determine fair market value. Homes in that community consistently sold for $5K to $10K off list price. The home we were looking at was priced right. Her offer based on her needed upgrades was $20K off list price. Needless to say the seller thought she was crazy and we were unable to make a deal. I’m telling this story for a couple of reasons. If the list price of a house is correct it already takes into account the age of the home and the community where it is located. You can’t just ignore sold comparables and make up an offer based on nothing other than your personal opinion.