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Archive for August, 2012

Pre-qualifying A Buyer, What To Know Before Looking.

A big issue and pressing question for a lot of For Sale By Owner sellers is how to determine if a potential buyer can afford to purchase the home for sale. This situation is known as pre-qualifying a buyer. At first glance, this may seem like a complicated process and a complex dilemma but in actuality it is relatively simple and involves crunching a few numbers in some basic mathematic equations. 

It is important to determine the meaning of some terms that are involved in this process. The first term to understand is the acronym PITI. This stands for Principle, Interest, Taxes, and Insurance. This is a figure that represents the total cost, monthly, of the mortgage payment including principle and interest as well as the monthly cost of property taxes and homeowners insurance. The second term is Ratio. This is a number that most banks use in order to determine how much of a buyer’s monthly gross income they can afford to spend on PITI. The most commonly used ratio is twenty-eight per cent. This ratio is determined without considering any other debts such as credit cards or car payments. Sometimes this ratio is referred to as the front-end ratio. When other monthly debt is taken into consideration, a ratio of thirty six to forty per cent is acceptable. This is called the back-end ratio. 

The calculations are as follows:  the front-end ratio is determined by dividing the PITI by the gross monthly income. The back-end ratio is determined by dividing the PITI combined with the debt, by the gross monthly income. Four things are needed in order to determine the PITI. The sales price, the mortgage amount, annual taxes, and annual hazard insurance. From the sales price you must subtract the down payment in order to determine how much is needed from your bank. 

The mortgage amount is generally the sales price minus the down payment. To determine the principle and interest portion of the payment you must use a mortgage payment calculator and input the loan amount, the interest rate, and the term of the loan in years. Mortgage calculator websites are available and can be found without much difficulty. Annual taxes are divided by twelve in order to determine the monthly property tax payment. The annual hazard insurance must be divided by twelve in order to come up with the monthly property insurance payment. 

All of these terms and figures seem daunting, but once put into practice, things become easier and more self-explanatory. This is the most complex portion of pre-qualifying your buyer. Other requirements include the standard credit check and job history check. A good credit rating as well as at least two years of consecutive employment are usually necessary in order to get the best terms for a mortgage and to get the lowest interest rate possible. 

It is not as difficult as it sounds in order to pre-qualify a buyer. This can usually be determined by a simple conversation where figures are discussed. With a small amount of due diligence, this process can be much simpler than it sounds and a profitable transaction can be completed.

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Installing Shutters On Your Windows, Things To Keep In Mind

Installing your shutters isn’t a difficult process at all.  The key here is to work with shutters that are specifically built for each individual window opening in conjunction with detailed instructions.

Many companies that install shutters will tell customers that the shutters need to be installed by a certified installer.  This isn’t the case, as you can install your shutters like a pro with no experience at all.

Measuring your shutters To properly install shutters to a window opening, you’ll need to measure.  First, you’ll need to determine if the shutters will be mounted to the inside or the outside of the window opening.

Inside mount installation The preferred means of installation is to mount shutters directly to the window jamb inside of the window opening.  This method is generally cleaner than mounting to the outside of the window and it doesn’t require additional hang strips or frame strips.  Keep in mind, the window must be somewhat square and have a solid jamb for you to attach the screws to.

To determine the window depth, measure from the front plane of the window back to the nearest obstruction that’ll prevent the louvers from rotating.  If you prefer, the company you are ordering from can also tell you the window depth for the style of shutters you order.

On occasion, a supplier of shutters will offer a second inside mounting method that uses rear hanging strips concealed behind the shutter panels that will allow adjustment up, down, left, and right for easier alignment.  This method is ideal if the window is out of square or if it has a drywall opening without a solid wood jamb.

Outside mount installation Outside mount installations use frames that attach to the wall or existing trim just to the outside of the opening of the window.  Normally, the frame will surround the shutter panels on three or four sides, depending on if a lower still exists. 

If you go with a cafe type shutter style, the hang strips are used on either side of the shutter panels.  The frame or hang strips will screw directly to the wall or trim, and the shutter hinge to the frame or the hanging strips.

Always play it safe and measure with a steel tape measure, which will give you the most accurate measurements.  Don’t attempt to measure with a fabric tape or yard stick – as this will lead you to a poor installation.

Carpet Repair For Your Home, Condo Or Rental

How often you need to repair your carpet depends on you.  There are instances such as burns, crushing, fading, furniture, bleeding, sprouting, and carpet beetles where you’ll want to take action.  Most of the time, you can finish a repair job without needing a professional, although there will be times when you will need professional assistance.

Burns occur when a cigarette butt or flame comes in contact with the carpet.  If the burn is small, the burnt fibers of the carpet can be cut out with scissors.  If the burn is large, you’ll need to replace the area with a new piece of carpet.  You can do this yourself if you know how, or have an installer do it.

Fuzzing This occurs when loose fibers come out on the edges of the carpet.  To fix this, simply cut the fibers that are sticking out.

Furniture marks Heavy furniture can result in indentations being left on the carpet.  To get rid of these nasty marks, you should sprinkle your carpet with some club soda, place a towel over the area, then iron it.  Do this a couple of times and you will see your carpet begin to re-fluff.

Shading, crushing, and matting A lot of traffic on the surface of the carpet will cause it to flatten, which may give some types of carpet a shaded appearance.  If this happens, you should brush and vacuum the area.  If you can’t fix the problem, you may need to hire a professional, as this can sometimes be very tricky.

Shedding and snagging Shedding is a problem of usage, as the fibers will surface on the carpet.  This isn’t a defect in manufacturing, but a normal problem.  To fix it, you’ll need to vacuum the area.  The snags on the other hand are tufts that have pulled out of the surface of the carpet.  They will occur more often with loop pile than cut pile carpets.  You should never pull them off, but instead cut them off neatly with a pair of scissors.

Sprouting A carpet is known to have sprouts only when there are tufts on it, which are longer than the rest. As pulling on them will only damage the carpet more, you should trim them off with scissors and level them down to the rest of the pile.

Static electricity This depends on the carpet material, construction, and padding.  Humidity will play an important role as the moisture in the air is absorbed by the carpet fibers.  A humidifier will help to retain moisture, and you can also spray the surface of the carpet with an anti static agent. 

Carpet beetles The best way to deal with carpet beetles is with a strong vacuum suction.  You should always avoid spillage and keep the surface of the carpet clean of food.  The carpet beetles are quite annoying, as they feed on wool, hair, hides, fur, grain, seeds, and flour.  If the carpet is infested bad, you professional cleaner is the way to go.

Bleeding or crocking Bleeding of the carpet is the loss or transfer of the color from one section to another.  Good undergarments can help to prevent bleeding to a certain degree.  Crocking on the other hand is the loss of the carpets color when it is rubbed. To avoid this, simply avoid getting your carpet wet.

A carpet installation job that is one right can help you reduce your repair worries to quite an amazing degree.  You can always call a pro as well, as their services will often end up being much cheaper than if you were to go ahead and replace the entire carpet.

Commercial Real Estate In Florida, Hello Florida!

Commercial real estate in Florida has reached an all time low.  Now is the best time to invest in any real estate in this sunny state, including commercial properties.  Real estate investors flooded the Florida residential market with a surplus of residential properties.  There are dozens of empty subdivisions where brand new homes sit that have never been occupied.  

If you are thinking of investing in commercial real estate in Florida, you have many different options.  One of the best options is to invest in strip malls or other commercial business property near some of these brand new subdivisions.  Some of them are miles away from even a convenience store.  While there are many vacancies in these subdivisions,  they are filling up all the time as people take advantage of low mortgage rates as well as the low cost of the homes. 

Because the residential real estate market has reached rock bottom, there are a lot of trades people out of work and building and materials businesses are suffering.  You can get labor and materials at bargain rates when building any sort of commercial real estate in Florida.  

You may decide to buy land, which is also at an all time low, and build a small strip mall that has convenience stores and other necessities.  Even if you do no want to go through the trouble of actually building the strip mall and having to rent it out and manage the property, you can develop the property, get it zoned and sell it at a profit to another developer who wants to do the actual building.  Better yet, you can embark on this kind of endeavor with a partner. 

Other commercial real estate in Florida includes hotels that are being renovated and turned into luxury condominiums.  Although the residential real estate market has crashed, the tourism industry is still thriving.  Investing in any property that caters to tourists is always a good bet in Florida.  

In most parts of Florida, older hotels and motels are being purchased by developers so they can construct luxury high-rise condominiums.  Because building has slowed down a bit in the sunshine state, now is a good time to buy property such as old hotels and motels if you have time to wait for developers who are sure to take over.  You can buy cheap and hold onto the property for a year or so until the market rebounds at which time, the luxury condominiums will again be in demand.  One thing about the Florida real estate market, it always rebounds. 

Commercial real estate in Florida varies from stores, hotels, restaurants and shopping centers.  There has never been a better time than now to invest in Florida real estate.  If you have money to invest in real estate in Florida, you should consider investing in commercial real estate in Florida.  With loan rates at an all time low and the price of property at rock bottom, there has never been a better time to buy real estate in the sunshine state.

Development Land Investment, Things You Need To Know.

Land development requires working with engineers, blueprints and municipalities.  A development land investment can be very lucrative but takes knowledge of how to improve vacant property.  Improvements on vacant land include the following: 

Ÿ  Streets or roads;

Ÿ  Sewer hookups;

Ÿ  Utilities such as gas, electric and telephone lines;

Ÿ  Curbs and gutters;

Ÿ  Sidewalks (if necessary)

Ÿ  Parking areas for commercial property 

When developing unimproved property, you will have to work with an engineer who will draw up blueprints reflecting the improvements.  You will then have to have the improvements approved by the municipality in which you are working. 

Development land investment can take a year or more to get started.  In some cases, property has to be subdivided to have separate tax parcels.  Municipalities do not move quickly and often do no approve a plan on the first request.  You may need to have an attorney help you push the development land investment through the various committees within the municipality.  

If the property needs to be rezoned, as is often the case with unimproved property, you will have to apply for a rezoning permit from the zoning committee of the local municipality.  A notice must be published within a certain period of time so all neighbors in the vicinity know how the property is going to be used.  

If you are thinking of making a development land investment, you need to have extensive knowledge of the real estate market in the area as well as how the municipality works.  If you are planning on purchasing vacant land where you will construct a strip mall, for example, you should protect your investment by making sure the contract to purchase the real estate includes a contingency that the property be zoned for business usage.  There are several different types of zoning and they differ from state to state. 

Zoning can determine whether the property can be used for residential, business or industrial type of use.  There are other ways a property can be zoned for use and different ways to zone property for residential, business or industrial uses.  In addition to knowledge of the real estate market, if you want to make a development land investment, you have to have some understanding of the zoning laws within the municipality in which the property is located. 

Developing a good working relationship with the municipality representatives is also essential when investing in unimproved land.  In most cases, the municipality will embrace any improved land as it will add value to the area.  You must also consider he surrounding neighborhood when making a development land investment.  Is the area oversaturated with houses?  If so, surrounding neighbors may be glad to have a strip mall with a convenience store.  Do a bit of research to see what the neighborhood where the property is located really needs. 

Development land investment can earn a very profitable return if the investor has good knowledge of the market and the municipality is receptive to the development.  Once the property is improved, the commercial real estate investor can build on the property or sell it for a profit as improved property to another commercial real estate investor.

A Guide to the Settlement Statement, Also Called The Closing Statement

You’re about to cross the finish line in your home selling process.  There are just a few more steps that you need to complete before you hand over the keys to the home.  During the home closing, the primary document you and your buyer will be dealing with is the settlement statement (also called the closing statement).  This is a document that lists out the fees and charges that you, as the seller, and the buyer are required to pay in the housing transaction. 

The settlement statement is prepared either by the buyer’s lender or the escrow agent.  Regardless of who prepares the statement, that person is required to follow pertinent federal guidelines.  The Real Estate Settlement Procedures Act of 1974, the governing law for closing processing in housing transactions. 

It is important that you pay close attention to the settlement statement as the for sale by owner seller because it will list out the costs for which you and the buyer are responsible.  Most likely, you and the buyer have already negotiated which of you will be paying which closing costs.  You must review the settlement statement to ensure these costs have been assigned to the correct party. 

Usually, the settlement statement is broken down into two pages.  The first page summarizes payments to be made in the housing transaction.  Included is the sales price of the home, settlement charges that the borrower must pay, tax adjustments, settlement charges the seller (you) must pay, first mortgage payoff amount, and total amount of cash the borrower (the buyer) must pay to the seller. 

The second page of the settlement statement lists the settlement charges that you and the buyer are required to pay.  This page is where your previous closing cost negotiations will appear.  Your sales contract should also list these charges and to whom the charges were assigned.  There will be a group of charges that are related to processing the mortgage, whether it is a new mortgage or an assumed one.  Typical fees are the loan origination fee, appraisal fee, lender’s inspection fee, assumption fee, and underwriting fees. 

The mortgage lender often requires some interest and insurance premiums to be paid in advance.  Usually paid by the buyer, these fees are also listed on the second page of the settlement statement.  Other mortgage related costs include reserves that are deposited to set up an escrow account.  These charges are assigned to the buyer. 

Another group of fees included in the settlement statement are related to guaranteeing the legitimacy of the title: title search, title insurance, document preparation, notary fees, and attorney fees.  Refer to the sales contract for the agreements made pertaining to these fees.  

Government fees include recording fees, tax and stamps and are usually negotiated in the sales contract. 

The final group of charges is miscellaneous charges that were not included in previous sections of the settlement statement.  For example, a pest inspection requested by the buyer is a miscellaneous charge. 

The settlement charges are totaled and entered on the first page in the summary information on the first page of the settlement statement. 

 

Real Estate Attorney, Consider Using With A Housing Transaction.

Even though you are selling your home without a real estate agent, the assistance of a real estate professional is still needed at various steps in the home selling process.  The requirement of a real estate attorney depends on the laws in your state.  Even if you live in a state where a real estate attorney is not needed, as a for sale by owner seller, it will still be beneficial for you to use one. 

A real estate attorney can serve many purposes in the housing transaction.  When you hire an attorney that specialized in real estate, that attorney is responsible for seeing that your best interests are met in the housing transaction.  A real estate attorney can act as the escrow agent by holding down payments, documentation, and earnest money deposits.  Not only that, the attorney can help you decipher and evaluate complicated offers you might receive from a buyer.  In the event that the lender’s attorney does not handle the closing, your real estate attorney will host and handle the closing.  If the lender’s attorney does handle the closing, then your real attorney will represent you in the process. 

Your primary concern should be to find a real estate attorney that will provide you with assistance you need in the housing transaction.  You can use a local or internet directory to find the names of some attorneys in your area.  Asking friends or family who have recently sold homes for references is another way that you can find an attorney to assist you.  If there are neighbors with “for sale” signs in their yards, you can casually inquire about the real estate attorney they are using.  Hiring an attorney that comes as a reference is often better than cold calling attorneys. 

As you look for a real estate attorney to hire, you should choose one that works primarily with real estate transactions.  Avoid choosing a criminal or family law attorney that handles real estate transaction on the side.  Your interests will not be best served by an attorney that does not spend a significant part of his or her time in real estate transactions.  Certainly do not hire an attorney that has never worked in real estate. 

Along with experience in real estate transactions, price will be the other factor you use to choose a real estate attorney.  The attorney you hire will have two major responsibilities: reading and advising you on documents and representing you at closing.  Get a price quote from prospective real estate attorneys on those two tasks.  You can get a discount from the attorney by letting him or her know that you will be preparing and filling out some of the documentation.  Shop around among several real estate attorneys to get a feel for experience level and price charged. 

The most important thing is that you have a real estate professional available to assist you through the transaction.  Even if you have successfully sold a for sale by owner home before, it is better to have legal assistance than to attempt to complete the process on your own.