Archive for October, 2016
House Hunting in SW Florida Calls for Level-Headedness, Naples, Marco Island. If you’ve been house hunting for the SW Florida home you know is out there—the one that will fit your needs, is situated in a suitable neighborhood, and fits your budget—when you home in on a likely candidate, try not to fall in love with it (at least not right away). House hunting is a nesting exercise: part logic, part emotion. Nothing will change that. But problems can result when emotions take over early on in the process. It’s human nature to rush past what seem to be pesky little details as you near the finish line. If, later, “pesky” turns into “horrendous,” it can usually be traced to a rush to judgement born of emotion. The most productive attitude is one of patience—energized by optimism but tempered with cool judgement. When you have faith that you will find what you’ve been house hunting for, persistence comes easily.
One basic house hunting tip has to do with your original checklist. You certainly start out with a list of what your minimum requirements must be, but if you don’t keep that basic list close at hand, you are apt to fall in love with a place that’s missing one or two vital elements. If your SW Florida dream house lacks something you set out thinking of as a necessity, you’ll be much more satisfied in the end if you at least consciously decide early on that the other wonderful features make the sacrifice worth the tradeoff.
The second tip category deals with maintenance…and upgrades…and décor changes…and the like. It’s about the realistic cost you are going to pay for necessary changes to will bring the property into line with your tastes and requirements. Being realistic about the amount of effort and budget that will be required is hard to do when you are already head-over-heels with the place—but it needs to be done realistically. The bottom line for your new SW Florida digs will include changes you know you’ll be making, so estimating those costs is integral to developing a levelheaded negotiating position.
The third house hunting tip is really the most hard-headed financial factor. If the home you’re falling in love with satisfies this one, go ahead and fall—this isn’t puppy love: it looks like the real thing! This tip is sort of romance killer (it’s like a prenup). After you’re pretty sure the property is what you’ve been looking for, stop and seriously consider what it’s resale value will be in a few years. Of course you’re not going to sell your dream house anytime soon—but one day you may want to do so. Will the property’s construction stand up to Father Time? Does the neighborhood look like it, too, will retain its charm (or even better, improve with the years)? And are the fine points of the house the kind that have wide appeal—and not just peculiar to the sellers (and you)?
House Hunting in SW Florida Calls for Level-Headedness, Naples, Marco Island. House hunting can be fun; it can be stressful; it can be (and usually is) both. But it is a terrifically valuable use of your time. The goal is to emerge from the process with the SW Florida home that will be a pleasure to come home to for many years to come. All the better when it produces an investment that creates value as those years pass. It’s my job to assist my clients in making the most of every house hunting hour. I hope you’ll call me so we can get started!
When the Topic is Energy Savings for SW Florida Homeowners. It’s been a welcome relief for SW Florida homeowners as the Bad Old Days of the energy crisis recede from memory. $4+-a-gallon gasoline, huge electric, propane and fuel oil bills that were the subject of national outrage have faded from the headlines. We’re now busy attending to the current challenges of daily living—and OPEC’s machinations aren’t front and center!
But for those SW Florida homeowners more attuned to what’s likely to be headed our way sooner or later, now is as good a time as any to prepare for the next spate of energy price surprises. And there are many new products—some in development, some already on the market—that soon could put a serious dent in the damage tomorrow’s energy bills might wreak.
Some of the interesting innovations:
- Bladeless Fans. These are already out there—the weird-looking magnifying-glass-shaped electric fans that suck hot air in through the base and push a steady stream of air out via an impeller. The no-blades design promises to make them safer, and eventually less of an energy-eater.
- Smart Thermostats. The best new ones connect to home systems and display how much energy is being used (and how much it’s costing). Being able to see the dollars and cents result of every temperature-setting decision, these “smart” thermostats can’t help but result in measurable energy savings.
- Flooring Upgrades. Who isn’t attracted to the warmth of hardwood floors? That never changes, but when it comes to the cost factor, they can’t match the energy savings of radiant heat. Unlike older versions of radiant flooring, the new products like Warmboard don’t require running tubes in concrete to circulate hot water. Radiant solutions were already 25% more efficient than forced air—the newer systems allow greater control and lower water temperatures.
- Sprinkler Controllers. Water bills can be eyebrow-raisers anytime—but if you’ve ever found yourself rushing outside during a rainstorm to figure out how to stop your automatic lawn sprinkling system from adding to the flood, that situation needn’t reoccur. The newest “smart” systems take weather, sprinkler type—even growing conditions—into account. As an extra, mobile apps allow you to supervise from afar.
- Solar Shingles. They’re not yet at the price point of traditional solar panels (who would have thought that bolt-on solar panels would ever become “traditional”?)—but they are quicker to install and have the advantage of maintaining the traditional rooflines. They are becoming the renewable energy solution with curb appeal!
Investments in home renovations that give SW Florida homeowners energy savings are investments that pay off twice: right now, as the monthly operating costs are realized; and later, when those advanced features make the property more attractive to buyers. If that “later” is also a time when a future energy crunch is on everybody’s minds, it can be an important selling feature.
When the Topic is Energy Savings for SW Florida Homeowners. That would also be prime time to give me a call!
Regular Inspections Protect SW Florida Rental Home Assets, Naples, Bonita Springs. Suppose you have put your SW Florida home on the market, but the number of showings is signaling that your asking price is not attracting much buyer interest. In most cases, you will notch the price down to a competitive level. That’s simply responding to the real life market in real-time.
But if you have no need to sell within a limited time frame—and you are disinclined to accept what the market is supporting at the moment—you have the option of waiting. If you also aren’t in residence at the property, you have another option, too: you can turn the property into one of the SW Florida rental homes that keep cash coming in while the market continues to improve.
To make the most of the home rental solution, one major management issue is a systematic approach to maintenance. If you hire one of SW Florida’s experienced property management firms, that will be high on their priority list. If you decide to take on the job yourself, it will fall to you. Although good tenants can be considerate, watchful guardians of your property, to assure that your asset that retains its value when you aren’t in residence, regular inspections should be part of the rental home arrangement. Surprise landlord visits are to be avoided, but when regular inspections have been agreed upon and advance notice given, there should be no reason for anything other harmonious cooperation—particularly if generally agreed-upon good practices are followed:
- There should be no ambiguity about why routine inspections are necessary. Every home needs to have its systems and structural integrity proactively maintained. No matter how thoughtful and careful a tenant may be, Father Time needs to be held at bay in ways the owner is most likely to spot.
- If at all possible, at least one of the responsible tenants should be present during inspections. Not only does this deter any possibility of accusations of theft or other mischief from materializing, it’s also that much easier to foster an atmosphere of cooperation instead of confrontation. At its best, a successful inspection yields more than a checklist of items to be attended to. It gives the tenant assurance that their quality of life is part of your goal as landlord.
- When issues arise that should be photographed—for communication with maintenance professionals or for legal documentation—care should be taken that they never include personal items (like family photos, pets, people or valuables). This is a privacy issue that is universally observed, but too easily overlooked. Don’t!
- If the above Communication and Teamwork ideas run up against a reality where the property is being neglected in any substantial corner, personal on-the-spot confrontation is generally regarded as likely to yield negative results. You will have documented the problem, and the best way to handle it is to address the issues with the tenant formally—and in writing.
Regular Inspections Protect SW Florida Rental Home Assets, Naples, Bonita Springs. When SW Florida properties convert into SW Florida rental homes, they can also acquire an extra asset—because that’s exactly what a good tenant is. And if the time comes to ultimately list the property, it might find a whole new group of prospects—investors interested in SW Florida rental homes that come equipped with long-time tenants. Call me!
One way or another, it’s all connected.
Mortgage Interest Rates & SW Florida Real Estate: It’s All Connected. Last week ended with what some observers justifiably called a “shocking” development—one that could impact SW Florida’s home buyers and sellers measurably—at least in the short run. It came with the release of the employment statistics from the Department of Labor. They weren’t good numbers. But the surprisingly weak report might be good news for some home buyers, since it could well affect affordability. As I said, it’s all connected.
“Affordability” is the index that seeks to summarize in a single number whether or not a typical family would qualify for a mortgage under current economic conditions. When a homeowner in SW Florida is looking at the state of the market, it’s not a bad indicator for explaining why sales might be rising or falling. Even though the nation’s residential prices have been rising steadily, the Affordability Index has remained better than the historical average. You’d think that when something is more expensive, it would be less affordable—but the contradiction is explainable when mortgage interest rates are taken into account.
All across the U.S., very low mortgage interest rates have been more than compensating for higher home price tags. Interest rates near or below the 4% mark tend to make monthly home loan payments eminently affordable. That happy situation can’t last forever, of course; so it’s why anyone with stake in SW Florida real estate has reason to watch for changes in mortgage interest rates. If you are thinking of buying a home in SW Florida, low mortgage interest rates are a strong motivator to get going. If you are thinking of selling, legions of motivated buyers are what you’d hope for.
Adding more fuel to the fire had been the growing likelihood that those mortgage interest rates will soon begin to rise—this month, as a matter of fact. Until last Friday, the Federal Reserve governors had been unusually forthright in statements that they were likely raise lending rates at next week’s meeting. The experts didn’t disagree.
Then came Friday’s jobs report, which blew those expectations, if not into the weeds, at least onto the sidewalk. MarketWatch was typical. “Weak job numbers…have essentially taken a June rate increase off the table.” They called the chances for such a move in July “also significantly reduced.” Only hours earlier, the same site had headlined, “Investors are now ready to accept the Fed’s interest-rate hike.”
Fortune was equally firm, headlining, “Don’t expect the Fed to Raise Interest Rates This Month.” An earlier article had described financial markets that were raising bets on a June increase following release of Fed deliberations.
Does this new twist make SW Florida real estate market more or less attractive? The poor labor report might give some pause about the U.S. economy as a whole, but SW Florida’s continuing low mortgage interest rates certainly counterbalance those concerns. Then there is always the outside chance that the experts are, again, wrong—and the Fed will raise the Funds rate, anyway.
Mortgage Interest Rates & SW Florida Real Estate: It’s All Connected. This is a realm in which few things are certain. One is that, as previously mentioned, it’s all connected. Second, there’s at least one sure way to take advantage of the best SW Florida’s real estate market has to offer—calling me!
Your SW Florida Listing May Become a World Traveler! Naples, Ft. Myers, Estero. The SW Florida listings are one piece of what is now a towering real estate marketing colossus. Our MLS is like the bulletin board at the local supermarket where you pin-up your garage sale notice or picture of the old lawn mower you’d like to get rid of in that it’s simple to use and, for the sellers, free. The difference is that today’s SW Florida listings are on the internet, so instead of just being available to the shoppers in SW Florida, it’s posted for the whole world to see. Literally.
And people from all over the world, instead of just wheeling their carts past it on their way to a parking lot, are increasingly paying attention. The most recent survey had foreign buyers plunking down $104 billion for about 8% of total existing homes sales dollars. In other words, people in China are checking out the homes for sale in SW Florida. (Fewer people in SW Florida are checking out the homes for sale in China, but there are ample reasons for that). Real estate magazine The Real Deal points out that in some U.S. markets, Chinese buyers have claimed the title of top foreign buyers because of internet buying. “Indeed, prospective Chinese buyers are increasingly relying on websites…”
How foreign buyers come across likely purchases is hard to track, but it’s a cinch that the same listings we use are frequently splashed onto screens across Canada, Mexico, Great Britain, China, etc. When the simplest in-home showing involves the hassle and expense of foreign travel, you can be sure that the still photos and virtual tours integrated into the local listings are close to decisive when foreign buyers are the prospective buyers.
You might think that wealthy Chinese prospects in particular would be mainly attracted to the highest-end trophy properties, but some of the most recent statistics don’t bear that out. Business Insider last reported that in the U.S., “Chinese buyers spent an average of $425,000 on homes.” Because of the difficulty U.S. lenders have in verifying borrower financial data, these are largely cash purchases.
Your SW Florida Listing May Become a World Traveler! Naples, Ft. Myers, Estero. When a residence goes up on the SW Florida listings, it’s one more reminder of how wide-ranging the potential audience will be. We expect to be viewed by out-of-towners, of course—out-of-staters, sure…but now, increasingly, way out-ofs! With eyes from all over the world joining those who will be giving a property the once-over, we’re again reminded how powerful the visual element of our listings become. It’s why I take great pains to help assemble the finest onscreen presentations for every client…and another good reason you should give me a call!
Homes for Sale in SW Florida Can Exploit the “Food Connection”! It’s interesting to look into how many ways the universe of food —be it restaurants, markets, cooking, gardening or eating—intersects with the world of real estate. The connections are many and important. That’s true from the moment a future SW Florida homeowner begins to look into the current crop of SW Florida homes for sale.
We commonly think about residential real estate predominantly in terms of shelter. The listed homes for sale are vying to become the roof over our head; the place where the family will be blissfully protected from the elements. But since it will also be the place where we prepare our meals, store the groceries, and experience the holiday celebrations and feasts that will be remembered forever as key moments in our family’s life together.
Food is central to all these things—it’s why homes for sale that can claim superior kitchens have a clear advantage over those with cramped layouts or dated appliances. The popularity of formal dining rooms may be waning, but the importance of the kitchen has never been more pronounced. Interestingly, large, showy kitchens don’t always get the highest marks from experienced family head chefs. For some, a more compact layout that creates an efficient “work triangle” (the imaginary line connecting cook top, sink, and refrigerator) can win favor by saving steps—and time. In any case, most Americans think of the kitchen as the house’s nerve center around which family life revolves. And in summertime, when the action moves outside, an extra advantage goes to the homes for sale that have patios or decks that look ideal for outdoor grilling.
It is also true that for even the most dedicated amateur chefs, hectic workday schedules can mean that cookery of any kind is forced into becoming a strictly weekend pursuit. For those whose professional lives make that an unavoidable reality, a property’s proximity to quality SW Florida dining outlets can be a major selling point. One way alert homeowners take advantage of that is by preparing a list of their favorite local eateries—or even by prominently displaying a collection of current take-out menus from nearby restaurants.
Homes for Sale in SW Florida Can Exploit the “Food Connection”! When you think about it, it makes good sense to take a look at the ways homes for sale in SW Florida can make the food connection part of their marketing approach. Call me for a rundown of some of the other lifestyle elements that we can use to demonstrate to prospective buyers how readily your property can fit into their vision of what a treasured home should be.
SW Florida Mortgage Applicants’ Credit Histories Reappraised, Naples, Bonita Springs. This will be a heads-up for SW Florida residents who may be applying for a home loan in the future: there are some major adjustments underway that could affect their eligibility. It hasn’t been talked about much—possibly because most peoples’ eyes tend to glaze over when the topic of loan analysis is raised. But the more SW Florida mortgage applicants know about how lenders decide which loans to grant and on what terms, the better the odds of getting a green light. Briefly, here’s what is coming:
Starting on the 25th of this month, the way Fannie Mae (FNMA) goes about assessing creditworthiness will change. FNMA is the government-backed outfit that buys up private lenders’ home loans once they have been made. That insures that the lenders continue to have a steady supply of cash with which to fund new loans. In short, Fannie’s mission is to keep the home loan industry liquid. Together with similar corporation Freddie Mac, they are behind 60% of home loans in the U.S.—so many SW Florida mortgages are directly involved.
In order to qualify for government backing, lenders have to prove that a given home loan carries an acceptable level of risk. Lenders work with software programs issued by Fannie to help put numbers to the amount of risk—and that’s where the change is about to take place. Beginning next weekend, their latest release of the software (“Desk Underwriter 10.0”) will start to be used. For the first time, it will add a new element in the way a local applicant’s credit history is analyzed—one that is intended to better predict their ability to repay. It’s called “trended data.”
Credit reports will continue to use the familiar scoring benchmarks: outstanding balance, percentage of credit used, and timeliness of payments. In fact, the traditional credit scores aren’t slated to be impacted at all. What will change is the importance those scores are given, because the trended credit data will go deeper into what a borrower’s history shows. The software will take the previous 24 months’ revolving credit card payment history to rate whether the trend has been one of using more credit; maintaining the same level of borrowing; or paying down balances. In brief, if the “trended data” shows that balances owed have been rising, it indicates a Near Prime borrower. If the amount owed remains relatively stable, it shows a Prime borrower. If the balances have been dropping, it indicates a Super Prime candidate who is most likely to repay without a hitch.
There are nuances, too (they really would make everyone’s eyes glaze over)—but that’s the big picture. For SW Florida mortgage applicants who will be applying this summer, the fact that their history will now be analyzed in this manner is at least good to know—even if it’s not possible to alter. For everyone else who may not be applying for a while yet, it should be useful to plan credit card usage in light of how it’s likely to affect lending decisions.
SW Florida Mortgage Applicants’ Credit Histories Reappraised, Naples, Bonita Springs. I make it a point to keep my clients abreast of all current developments affecting the buying, selling, and financing of SW Florida properties. Whenever you have a question about anything to do with our local real estate scene, I hope you won’t hesitate to call!
Summer Solstice Marks a Midpoint for SW Florida Real Estate. SW Florida’s week starts off with a celestial milestone. Our grade school teachers told us to call this point in the calendar a “solstice.” There are two each year, and this is the summer one. If there had been one of those models of the solar system in the room, the teacher would have used it to illustrate the way Earth’s orbit…well, here it always got a little complicated. Especially if the teacher started explaining the difference between a solstice and an equinox. An equinox happens when the day and night are the same length: each exactly 12 hours. Monday’s solstice: well, it’s more complicated…
“Solstice” comes from Latin words for “the Sun” and “standing still”: it’s when the Sun’s position in the sky reaches as far north as it’s going to get. Up until then, every noontime, the sun kept creeping further and further northward. At the equinox, its progress stops cold. At noon the next day, it will reverse course. And keep dipping southward until the winter equinox…
Anyway, for SW Florida real estate, this week is even more significant than an equinox, because the summer solstice isalso the first day of summer—and that is exactly the midpoint of what is traditionally real estate’s busiest time of year: the spring-summer selling season. Take a look at SW Florida’s listings and you’ll see both the new ones that weren’t there in May and those that are now under contract: the multiple comings and goings are why this season is so productive.
The same holds true just about everywhere else in the country, too; and with the start of summer came some additional welcome news (the kind of news that we had expected). First off, the Fed’s Janet Yellen confirmed that interest rates were not going to be going up yet. This was the opposite of what had been pre-announced in April, then back-pedaled last month. May’s weak jobs report was the culprit (or hero, if you are lucky enough to be applying for a mortgage any time soon).
So it may be merely a coincidence, but it does seem as if the Fed is observing its own kind of solstice. They’re not moving interest rates, no matter how much they’d like to. Rates are at a standstill. Maybe the Fed Governors will decide to take a break—get out of the office to enjoy summer like the rest of the nation…
Summer Solstice Marks a Midpoint for SW Florida Real Estate. Meantime, home loan rates continue to be thrillingly inexpensive—a boon for SW Florida real estate in all quarters. Buyers and sellers all benefit when monthly mortgage payments look the way they do now. So for this year at least, the solstice marks a great time to give me a call!
Speed and Agility Creates SW Florida House Flipping Successes, Naples, Ft. Myers. Most SW Florida house flipping veterans can look back on their successful projects and place them in either of two columns. Either they were intended to be quick flips—turnarounds where speed was a prime ingredient because of an original tactical decision—or they were not.
The quick flips depend on speedy, focused action in three of the four phases a house flipping project entails. In the opening phase— lining up the capital—speed is not important. Of course, nothing else will materialize unless financing for the SW Florida property is obtainable when needed—but there is no timer ticking away. Once it is likely that funding will be obtainable, that’s when the clock starts.
Phase Two—finding, negotiating, and closing on a suitable property—is a real foot race. A quick flip only materializes after a suitable property has been identified. “Suitable” in this context means a home that can be made attractive in the SW Florida market without requiring extensive and time-consuming rehabilitation—cosmetically challenged, but not structurally unsound. If it is already on the market, it’s probable that the present owner’s circumstances make them disinclined to oversee any turnaround work themselves. The need for speed is apparent: since the current asking price has to be low enough to allow sufficient profit upon its resale, other interested parties will be interested once they get wind of the opportunity. This kind of qualified house at a sensible price is certain to find a ready buyer quickly.
During the next fix up phase, speed and agility is equally important. The work of repairing and renovating calls for fixing underlying mechanical issues, then making everything cosmetically inviting and immaculately clean. Time really IS money: not just the time a project takes, during which the investment capital can’t be allocated elsewhere—but also the house flipper’s time. It’s why many are themselves experienced contractors—and why most of the others have a deep contact list of those they can rely upon. When a turnaround effort drags on for month after month during which the project is consuming rather than producing, the bottom line suffers. A quick flip’s success can be measured by its final net profit divided by the number of weeks it took, purchase to sale.
The end phase of house flipping is the sale—which calls for expediency for the same reasons. If all else has proceeded as planned, speed here is likely for one simple reason. If the first three house flipping phases have been professionally executed, that means that a profitable sale can happen with an asking price that’s a touch beneath comparable SW Florida properties. Nothing assures speedy success more than that!
Speed and Agility Creates SW Florida House Flipping Successes, Naples, Ft. Myers. Quick flips are not the only kind of SW Florida house flipping, either. Some properties need a lot more tender (and time-consuming) care before they can be profitably returned to market. But for either kind of buying and selling, being able to rely on an experienced Town Realtor® is a key asset. Whether your next real estate endeavor is in search of profit or simply a home that’s just right for your family, I hope to be answering your call!