Unfortunately here, in the State of Florida, we have a couple of items that are creating havoc with our economy and even forcing some into foreclosure. But that is another story and those people need to take blame for getting into something that they shouldn’t have in the first place.
Anyway, back to property insurance. Here’s an example. I know some people in western Oregon. They have a home of about 4000sf on many acres with out buildings, etc. Their homeowners insurance runs them $1000 a year plus another $500 for earthquake insurance. I on the other hand have an approximately 1500sf home on about 1/3 or an acre and am paying approximately the same for my homeowners insurance.
I need to backtrack a little to a previous post where I wrote about insurance companies and actuaries & how they had to know what they were getting into and the rates that they have been charging. Well, I’ve come to learn a little more about the history of homeowners insurance in Florida.
Insurance companies competed by keeping their rates low & then came Hurricane Andrew. After that catastrophe, most had huge losses but 11 of them went bankrupt. So the remaining companies started raising rates to match their level of risk & cancelling policy renewals.
Then our government decided that we needed to do something about this and passed laws to keep our insurance rates down. And then, finally, they created Citizens Property Insurance. This was to be the insurer of last resort. Remember this as we come back to that in a little while.
Well, lo & behold, then came the hurricanes of ’04 & ’05. Unfortunately, this bankrupt some companies as well. Oh yes, I forgot to mention, one of those companies was Citizens Property Insurance. But, don’t worry, we got taxed to bail it out. It even states on everyone’s policies in the State of Florida something to the effect of “Citizens Property Insurance Assessment, Florida Catastrophe Fund Assessment, Citizen’s Recoupment Fee,” etc.
Now, our Governor is asking that these insurance companies pass the buck or I should say the bill along to their customers outside the state of Florida. Additionally, they are allowing Citizens to grow and they were allowing them to raise their rates as well, but then enacted legislation to freeze their rates. They were giving Citizens the go ahead to compete head on with other insurers so they were no longer the insurer of last resort, when you couldn’t find insurance elsewhere.
So now, Citizens has basically gone belly up twice and, as I’ve stated, we are paying for this. It may sound good that there is an insurer out there with affordable rates. But what’s ultimately going to happen is that they are going to grow into probably the largest insurer in the State of Florida and when another unfortunate catastrophe hits this state we are all going to be left with the bill. It’s just a matter of time before Citizens Property Insurance goes bankrupt again.
Citizens Property Insurance is a problem that needs to be addressed quickly!
Until next time – Marc It Sold!
Friday, May 18, 2007
Friday, May 11, 2007
Property Taxes – Our Nemesis! – con’t
I was actually planning on writing about our other nemesis – Homeowners Insurance, but today’s Orlando Sentinel had much ado about property taxes and Marco Rubio’s new plan.
It seems that State Rep. Rubio’s previous plan was too drastic for many in the Senate, if not the House, to swallow. As you may have read in my previous posts, I have been a strong opponent to his plan. His new plan just seems to be a rip off of the one I wrote about yesterday, the one that was proposed by David Simmons of Maitland.
Unfortunately, Rubio’s new plan again goes too far. He is proposing that we pay property taxes on only 20% of the first $300K of the assessed value; 30% for the next $700K; and, then 70% of any assessed value over $1M.
This equates to a home with an assessed value of $300K, would only have a taxable value of $60K. As good as this sounds & what it will mean to our pocketbooks, this is absolutely outrageous – totally ridiculous. I don’t know if this man is trying to just make a name for himself in the short-term or what. My mind is just boggled thinking of the repercussions from a move like this. Yes, I agree that we need property tax reform, but come on guys, let’s use our heads.
Can you imagine the catastrophic cuts that will have to occur on the city & county level if something like this passes. Granted, I agree that there needs to be some trimming & more accountability, but this is not the way to go about it. With cuts like this it has to affect our basic services, nevermind what it could do to education.
Yes, a tax cut will finally get rid of Save Our Homes & at least we are seeing some that might be more equitable. Yes, a tax cut will also allow some long-term homeowners to possibly move who otherwise may have felt trapped because they might have been hit with a huge tax increase.
If Rubio’s plan or something similar with drastic tax cuts comes to fruition, all we are going to see is an increase in taxes somewhere else. Again, this is absolutely ridiculous. And the fact of the matter is that we will most likely pay more in the long run.
Hmm, so what purpose does this really serve except for someone getting their name in lights. I hope that I am wrong about Mr. Rubio, but all the signs point otherwise.
I look forward to seeing a property tax cut – as a homeowner & as a realtor®. I don’t like what’s happened with property taxes. Tax relief will surely help fuel more housing transactions. I think that it would surely help turn around a market that we are seeing flounder. I know that it would surely bring more buyers out of the woodwork. But again, our lawmakers have to be realistic.
Until next time – Marc It Sold!
It seems that State Rep. Rubio’s previous plan was too drastic for many in the Senate, if not the House, to swallow. As you may have read in my previous posts, I have been a strong opponent to his plan. His new plan just seems to be a rip off of the one I wrote about yesterday, the one that was proposed by David Simmons of Maitland.
Unfortunately, Rubio’s new plan again goes too far. He is proposing that we pay property taxes on only 20% of the first $300K of the assessed value; 30% for the next $700K; and, then 70% of any assessed value over $1M.
This equates to a home with an assessed value of $300K, would only have a taxable value of $60K. As good as this sounds & what it will mean to our pocketbooks, this is absolutely outrageous – totally ridiculous. I don’t know if this man is trying to just make a name for himself in the short-term or what. My mind is just boggled thinking of the repercussions from a move like this. Yes, I agree that we need property tax reform, but come on guys, let’s use our heads.
Can you imagine the catastrophic cuts that will have to occur on the city & county level if something like this passes. Granted, I agree that there needs to be some trimming & more accountability, but this is not the way to go about it. With cuts like this it has to affect our basic services, nevermind what it could do to education.
Yes, a tax cut will finally get rid of Save Our Homes & at least we are seeing some that might be more equitable. Yes, a tax cut will also allow some long-term homeowners to possibly move who otherwise may have felt trapped because they might have been hit with a huge tax increase.
If Rubio’s plan or something similar with drastic tax cuts comes to fruition, all we are going to see is an increase in taxes somewhere else. Again, this is absolutely ridiculous. And the fact of the matter is that we will most likely pay more in the long run.
Hmm, so what purpose does this really serve except for someone getting their name in lights. I hope that I am wrong about Mr. Rubio, but all the signs point otherwise.
I look forward to seeing a property tax cut – as a homeowner & as a realtor®. I don’t like what’s happened with property taxes. Tax relief will surely help fuel more housing transactions. I think that it would surely help turn around a market that we are seeing flounder. I know that it would surely bring more buyers out of the woodwork. But again, our lawmakers have to be realistic.
Until next time – Marc It Sold!
Thursday, May 10, 2007
Property Taxes – Our Nemesis!
Finally someone has come up with a tax-cut proposal that is somewhat realistic. David Simmons, a state representative from Maitland, has proposed a property tax plan that will offer big tax cuts, but asks homeowners of larger more expensive homes to get a lesser tax cut percentage. More in line with how income taxes work. Basically using a sliding scale approach.
Here’s how this would work. All homeowners would get a tax break of 65% on the first $100K of assessed value of their home. For homes valued $100-200K, these people would receive a 55% tax cut on the second $100K of the homes taxable value. This would be further reduced to a 45% tax cut on the next $100K of taxable value and so forth with homes valued over $600K receiving a 5% tax break.
Breaking this down, this would mean that a home valued at $200K (remember we are talking assessed value not the market value of a property) would pay taxes on approximately 40% of the homes value, while the owner of a $500K home would pay on approximately 56% of the homes value.
This is much more reasonable and differs greatly from Marco Rubio’s plan which is to eliminate the property tax altogether on your primary residence & to raise the sales-tax. This would have created a major shortfall in revenue for local and county governments. Fiscally, I could never see this work in the long-run.
As some of you have read my previous posts, my main concern with all of the tax proposals out there was that they were offering to fix a flawed system with an equally flawed system. Yes, these politicians could all say, “Look what we’ve done for you.” That would only be short-lived.
What are the implications of creating these revenue shortfalls? Well, I wouldn’t be surprised if we would see a property tax again in the near future.
Granted, I am not saying that the tax cut plan proposed by David Simmons is flawless, but it seems to be the most realistic & best conceived of all that have been offered.
Until next time – MARC IT SOLD!
Here’s how this would work. All homeowners would get a tax break of 65% on the first $100K of assessed value of their home. For homes valued $100-200K, these people would receive a 55% tax cut on the second $100K of the homes taxable value. This would be further reduced to a 45% tax cut on the next $100K of taxable value and so forth with homes valued over $600K receiving a 5% tax break.
Breaking this down, this would mean that a home valued at $200K (remember we are talking assessed value not the market value of a property) would pay taxes on approximately 40% of the homes value, while the owner of a $500K home would pay on approximately 56% of the homes value.
This is much more reasonable and differs greatly from Marco Rubio’s plan which is to eliminate the property tax altogether on your primary residence & to raise the sales-tax. This would have created a major shortfall in revenue for local and county governments. Fiscally, I could never see this work in the long-run.
As some of you have read my previous posts, my main concern with all of the tax proposals out there was that they were offering to fix a flawed system with an equally flawed system. Yes, these politicians could all say, “Look what we’ve done for you.” That would only be short-lived.
What are the implications of creating these revenue shortfalls? Well, I wouldn’t be surprised if we would see a property tax again in the near future.
Granted, I am not saying that the tax cut plan proposed by David Simmons is flawless, but it seems to be the most realistic & best conceived of all that have been offered.
Until next time – MARC IT SOLD!
Thursday, May 3, 2007
The Southern Lawn
OK, so I’m going to try to blog about something other than the market conditions, etc. I know that sometimes it may seem somewhat depressing to you. I still wanted to give you helpful information, nevertheless.
Well, it’s May, the A/C is on, we haven’t had enough rain, it’s already in the 90’s almost every day. You got to love, but ‘oy’ how does your lawn feel about it?
Firstly, you should have already fed your lawn. This should be done at least twice a year. I usually do mine in March, July & again in October. There are some that also feel that you can do a late spring feeding in May – June and also a late fall feeding in November – December.
Now, to watering. I see too many people water incorrectly & this does not help you lawn in the long-term. As a general rule, most lawns require about one inch of water per week. The best time to water a lawn is early in the day. You don’t want to water during the heat of the day, because you will lose a lot of that watering due to evaporation. Secondly, it is illegal to water from 10am to 4pm in most parts of Florida due to our drought restrictions. You also don’t want to water in the late evening, because then you may be putting your lawn at risk for developing mildew and fungus disease.
Don’t water more often than twice a week. This actually hinders your lawn more than help it. And, surely, don’t give your lawn light sprinklings. This will only promote shallow roots.
Two types of weeds show up in lawns: broadleaf weeds and grassy weeds. Basically, any plant growing in the lawn that does not resemble grass is a broadleaf weed. If your lawn is full of weeds, the best solution is to use a broadcast herbicide to kill them. A few weeds can be pulled up by hand, but many will grow right back because of their deep tap root. It may appear that the entire weed was pulled out, but the tap root simply breaks and what is left in the soil sprouts new weed growth above the soil.
Grassy weeds are a bit tougher to control. Typically, grassy weeds like crabgrass die in the fall and drop thousands of seeds that germinate the following spring. This is why a crabgrass preventer is recommended in the spring.
The best defense against weeds is a thick lawn that is properly cared for and never scalped by mowing. A thick lawn will choke out weeds and never allow them a place to establish in the lawn.
Mowing your lawn once a week is sufficient and most Bahia & St. Augustine grasses should be 2 – 4” in height. Keep your mower blade sharp. A dull blade tears the ends of the grass & this will turn brown & possibly promote fungus.
Never cut off more than 1/3 of the length of the grass blades in a single mowing. Mow in different directions each time you mow & never mow a wet lawn. Again, this will not only give you an uneven cut but may encourage fungus growth.
Well that was fun. OK, happy lawn care to you!
Until next time – Marc It Sold!
Well, it’s May, the A/C is on, we haven’t had enough rain, it’s already in the 90’s almost every day. You got to love, but ‘oy’ how does your lawn feel about it?
Firstly, you should have already fed your lawn. This should be done at least twice a year. I usually do mine in March, July & again in October. There are some that also feel that you can do a late spring feeding in May – June and also a late fall feeding in November – December.
Now, to watering. I see too many people water incorrectly & this does not help you lawn in the long-term. As a general rule, most lawns require about one inch of water per week. The best time to water a lawn is early in the day. You don’t want to water during the heat of the day, because you will lose a lot of that watering due to evaporation. Secondly, it is illegal to water from 10am to 4pm in most parts of Florida due to our drought restrictions. You also don’t want to water in the late evening, because then you may be putting your lawn at risk for developing mildew and fungus disease.
Don’t water more often than twice a week. This actually hinders your lawn more than help it. And, surely, don’t give your lawn light sprinklings. This will only promote shallow roots.
Two types of weeds show up in lawns: broadleaf weeds and grassy weeds. Basically, any plant growing in the lawn that does not resemble grass is a broadleaf weed. If your lawn is full of weeds, the best solution is to use a broadcast herbicide to kill them. A few weeds can be pulled up by hand, but many will grow right back because of their deep tap root. It may appear that the entire weed was pulled out, but the tap root simply breaks and what is left in the soil sprouts new weed growth above the soil.
Grassy weeds are a bit tougher to control. Typically, grassy weeds like crabgrass die in the fall and drop thousands of seeds that germinate the following spring. This is why a crabgrass preventer is recommended in the spring.
The best defense against weeds is a thick lawn that is properly cared for and never scalped by mowing. A thick lawn will choke out weeds and never allow them a place to establish in the lawn.
Mowing your lawn once a week is sufficient and most Bahia & St. Augustine grasses should be 2 – 4” in height. Keep your mower blade sharp. A dull blade tears the ends of the grass & this will turn brown & possibly promote fungus.
Never cut off more than 1/3 of the length of the grass blades in a single mowing. Mow in different directions each time you mow & never mow a wet lawn. Again, this will not only give you an uneven cut but may encourage fungus growth.
Well that was fun. OK, happy lawn care to you!
Until next time – Marc It Sold!
Friday, April 13, 2007
Real Estate is Still a Good Investment – REALLY!!
I feel that real estate has & will always be a good investment. Historically, this has pretty much always held to be true. Granted, there are many out there & especially some who were trying to be investors and bought at the wrong time, to say the least, that might feel differently.
I think for the majority of us, our real estate purchases have done very well for us. Especially, in the past several years where we have seen so many either refinancing and cashing out or taking home-equity loans on their property. But now that the market is changing we are hearing a lot of grumbling. I think a lot of people are getting very scared.
Too many have been relying on their property’s wealth. Take this for example, in Florida 16% of new car purchasing in 2006 was paid with home equity loans. That is astounding. Mind you, California was at 30% while the national average is 7%.
Wages have not appeared to have kept pace with inflation. With the increased wealth in our homes & relatively low interest rates, etc; people were making up for this shortfall by refinancing their homes & taking cash out. Now with housing slowdown, taking equity out of your home is not as readily available.
But, Real Estate will still remain to be a great investment in the long-term. It that is what has to be remembered. Yes, some have done great in the short term, but real estate has pretty much always been a long-term investment.
Thank goodness we are in a great industry!
Until next time – Marc It Sold!
I think for the majority of us, our real estate purchases have done very well for us. Especially, in the past several years where we have seen so many either refinancing and cashing out or taking home-equity loans on their property. But now that the market is changing we are hearing a lot of grumbling. I think a lot of people are getting very scared.
Too many have been relying on their property’s wealth. Take this for example, in Florida 16% of new car purchasing in 2006 was paid with home equity loans. That is astounding. Mind you, California was at 30% while the national average is 7%.
Wages have not appeared to have kept pace with inflation. With the increased wealth in our homes & relatively low interest rates, etc; people were making up for this shortfall by refinancing their homes & taking cash out. Now with housing slowdown, taking equity out of your home is not as readily available.
But, Real Estate will still remain to be a great investment in the long-term. It that is what has to be remembered. Yes, some have done great in the short term, but real estate has pretty much always been a long-term investment.
Thank goodness we are in a great industry!
Until next time – Marc It Sold!
Wednesday, April 11, 2007
Home Prices Plunge - Stop the Hysteria!!
Today, the front page headline in the Orlando Sentinel is “Seller Beware: Home Prices Plunge.” We are seeing & hearing this from all types of media. The writer was discussing the Median Sales Price. The unfortunate problem is that many may be unfamiliar with the term and at the same time it is being used as an incorrect standard.
Let’s start with some clarification here. The Average Price is that of homes in any given period being determined by taking all of the prices of homes that have sold, adding them together & then dividing by the number of homes that have sold. The Median Price is the home that has sold basically in the middle. That means that 50% of the homes, during that period, have sold for more & also the other half sold for less than that price.
Therefore, when we discuss median price, we are saying what is selling at that point in time. This does not mean that house values have dropped. But in conjunction with the average price is a good indicator of what homes are presently selling.
Now, granted & I’ve discussed this before, the real estate climate is different all of the country & everything is relative. Here in Orlando we still have a healthy market. Yes, the number of sold homes is less than what we saw in the past few years, but we are still selling homes. With the record number of recorded sales in the past couple of years, it was inevitable that this should slow down to a normal pace.
OK, I know that the world ‘normal’ is used a lot & myself included, but there is in reality no such thing as a ‘normal market.’ The market, as is discussed in Economics 101, boils down to supply & demand – buyers & sellers. We have an oversupply of homes on the market. In Orlando, we’ve hit the highest level recorded – over a 14 months supply.
I track the inventory numbers weekly. I do this for personal knowledge of what is happening in my market. You need to know your market. Last week, the amount of inventory dropped from the previous week and I thought & was also hoping that this was an indicator of a shift in the market. Unfortunately, this week the numbers were even higher.
But, HOMES ARE SELLING! I will reiterate this & it has been my mantra, but you have to show PRICE & VALUE for a home to sell. And as a realtor®, as the professional, you need to service your clients. You need to be realistic as do they. You need to do the proper marketing for a home to sell. Homes are generally not going to sell themselves as they did in the past.
I think that I have an excellent marketing plan. I also have to assume that my clients feel so also. The reason that I mention this is because I consistently see other listings & have to wonder what do they expect to sell. There is either nothing really mentioned about the home in the marketing comments & I’m just reading facts in regard to size, # of bedrooms & baths; the pictures are usually terrible or non-existent; and, no virtual tour! How can you expect to sell a home like this?
I always try to find new avenues to market a home; and, yes, myself. Your listing and you have to be as professional as is possible for you. This is a career & a profession & you need to sell yourself as well as your product. Otherwise, your product will languish on the market. And, that serves no one’s purpose.
OK, so I got off on a tangent – Imagine that!! I’ve stated in my last blog that I was thinking of writing about ‘What is a Realtor®?’ I will do that soon, because there is a great misconception of what it takes to be a realtor® & what a realtor® does. It’s all about education. As a person and realtor®, I believe in further educating myself, but I also feel that it is just important that I educate the public. Without this is why we have so many misconceptions flying around.
Thanks again for the indulgence.
Till next time – MARC IT SOLD!
ps. Thank you Nury!
Let’s start with some clarification here. The Average Price is that of homes in any given period being determined by taking all of the prices of homes that have sold, adding them together & then dividing by the number of homes that have sold. The Median Price is the home that has sold basically in the middle. That means that 50% of the homes, during that period, have sold for more & also the other half sold for less than that price.
Therefore, when we discuss median price, we are saying what is selling at that point in time. This does not mean that house values have dropped. But in conjunction with the average price is a good indicator of what homes are presently selling.
Now, granted & I’ve discussed this before, the real estate climate is different all of the country & everything is relative. Here in Orlando we still have a healthy market. Yes, the number of sold homes is less than what we saw in the past few years, but we are still selling homes. With the record number of recorded sales in the past couple of years, it was inevitable that this should slow down to a normal pace.
OK, I know that the world ‘normal’ is used a lot & myself included, but there is in reality no such thing as a ‘normal market.’ The market, as is discussed in Economics 101, boils down to supply & demand – buyers & sellers. We have an oversupply of homes on the market. In Orlando, we’ve hit the highest level recorded – over a 14 months supply.
I track the inventory numbers weekly. I do this for personal knowledge of what is happening in my market. You need to know your market. Last week, the amount of inventory dropped from the previous week and I thought & was also hoping that this was an indicator of a shift in the market. Unfortunately, this week the numbers were even higher.
But, HOMES ARE SELLING! I will reiterate this & it has been my mantra, but you have to show PRICE & VALUE for a home to sell. And as a realtor®, as the professional, you need to service your clients. You need to be realistic as do they. You need to do the proper marketing for a home to sell. Homes are generally not going to sell themselves as they did in the past.
I think that I have an excellent marketing plan. I also have to assume that my clients feel so also. The reason that I mention this is because I consistently see other listings & have to wonder what do they expect to sell. There is either nothing really mentioned about the home in the marketing comments & I’m just reading facts in regard to size, # of bedrooms & baths; the pictures are usually terrible or non-existent; and, no virtual tour! How can you expect to sell a home like this?
I always try to find new avenues to market a home; and, yes, myself. Your listing and you have to be as professional as is possible for you. This is a career & a profession & you need to sell yourself as well as your product. Otherwise, your product will languish on the market. And, that serves no one’s purpose.
OK, so I got off on a tangent – Imagine that!! I’ve stated in my last blog that I was thinking of writing about ‘What is a Realtor®?’ I will do that soon, because there is a great misconception of what it takes to be a realtor® & what a realtor® does. It’s all about education. As a person and realtor®, I believe in further educating myself, but I also feel that it is just important that I educate the public. Without this is why we have so many misconceptions flying around.
Thanks again for the indulgence.
Till next time – MARC IT SOLD!
ps. Thank you Nury!
Monday, April 9, 2007
BEWARE – Deed Scam
Recently, I received a letter in the mail. I was pretty sure it was junk mail immediately, but opened this one up. Inside, I was told that I needed a Certified Deed for my home. I knew right away that this was bs, but had to read on out of curiosity. I was being asked to spend an amount, which I can’t remember. I’m pretty sure that the amount was enough for some unsuspecting people to think that this was legitimate need, yet not too much for them to question the validity. The letter went on to say that you need this to protect your interest in your home, etc.
This is a waste of money. When you purchased your home, you received a Deed and this was recorded in the county in which your home is located. You would have received back from either the closing agent or title company this recorded deed, which you should have placed in a very safe place & hopefully a bank vault. Even if you can’t find this document, it is easy enough to contact your local Official Records office & get a certified copy for just a few dollars.
I feel bad because I know that there are a number of unsuspecting people out there that will get sucked into this scam. I know this is not a scam in that it is harmful to people, but it is a scam nevertheless and should be treated as such.
Until next time – Marc It Sold!
This is a waste of money. When you purchased your home, you received a Deed and this was recorded in the county in which your home is located. You would have received back from either the closing agent or title company this recorded deed, which you should have placed in a very safe place & hopefully a bank vault. Even if you can’t find this document, it is easy enough to contact your local Official Records office & get a certified copy for just a few dollars.
I feel bad because I know that there are a number of unsuspecting people out there that will get sucked into this scam. I know this is not a scam in that it is harmful to people, but it is a scam nevertheless and should be treated as such.
Until next time – Marc It Sold!
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