Want a Bigger Backyard? Buy a 2-Story Home!

If you’re searching for South Florida homes for sale and one of your criteria is that you want a big backyard, consider focusing on two-story homes as they generally have a smaller footprint on the property and often have more air-conditioned living space for about the same amount as a single-story home.  This photo of two Broward County homes side-by-side provides an example of what I mean.  The lot size of each of these properties is 5,665 square feet.  On the left is a 2-story home with approximately 2,400 square feet of air-conditioned space while the one on the right is a 1-story home with approximately 1,950 square feet of a/c space. 

Now look at the footprint of the house on each lot.  While they both have about the same size front yard, the backyard of the 2-story home is large enough to accommodate a pool and still have some yard space left.  In subdivisions, the front setbacks are typically the same so the real difference can be found in back of the house. Surprisingly, there usually isn’t a big gap between the sale price of each home, assuming they are in the same neighborhood, have similar lot sizes and are the same type of lot (ex: waterfront) with similar outdoor amenities (ex: pool).  So the question to ask yourself is, which is more important to you… no stairs or more useable land/outdoor space?

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Safest Cities in South Florida – 2007 Edition

Relocation to South Florida can be stressful and one of the issues often taken into consideration when deciding which city to relocate to has to do with crime statistics.  The 14th edition of the City Crime Rankings from CQ Press — published this week — can offer anyone relocating some useful information. 

According to its “Safest City Rank Order“, Coral Springs (at #17) is the safest city in South Florida, followed by Pembroke Pines (#48), Boca Raton (#67), Davie (#88), Plantation (#90) and Sunrise (#118).  It’s interesting to note that 5 out of the 6 are in Broward County and the western side at that.

Google Maps of South Florida Can Be Useful to Home Buyers

If you use Google Maps you may have noticed that they seem to have recently updated their maps of South Florida (satellite/hybrid aerial maps).  How can I tell?  Well, because now when I use Google Maps, I see lots of roofs with blue tarps on them… something we saw everywhere throughout South Florida for many months after Hurricane Wilma blew through Broward County as well as other surrounding counties.  Even now… almost two years later, you’ll still ocassionally see homes with a blue tarp on the roof.

If you’re a home buyer looking at homes in South Florida, this may be a good way to tell if the home you’re considering buying had roof damage.  In fact, the aerial maps even reveal which South Florida neighborhoods had roofs that weathered the hurricane better than others.  

Of course, Florida home buyers should always ask the home seller to provide them with a copy of the Seller’s Property Disclosure Statement (SPDS) which is designed to assist home buyers in evaluating the property being considered.  In Florida, a home seller is obligated to disclose to a buyer all known facts that materially affect the value of the property being sold and that are not readily observable.

Brand new and already functionally obsolete!

I recently showed one of my clients a 2-bedroom/1-bathroom townhome which has the 2 bedrooms with a bathroom between them upstairs and zero bathrooms downstairs (where the kitchen and living room/dining room are).  Whenever I come across these types of odd floor plans, I have to ask “what were the builders thinking?”.  Who wants to have to go upstairs every time they need to go to the bathroom or make their guests do that?  I know some older homes were built with only one bathroom but this was a 10-year old townhouse… a townhouse that was functionally obsolete even when it was brand new!

Whenever you are shopping for a home, be sure to take into consideration the potential value of a home in the future.  Oddities such as the one I mentioned above can negatively affect the value of the home and make it more difficult to sell, especially during a buyer’s market when inventory levels are high.  Unless there is a way to fix the problem and the fix is not unreasonably expensive, it’s best to move on and find another home you like that won’t make it difficult to sell when you decide to move again and have to put it on the market.

Living Free of Homeowner Association Fees and Constraints

With an eye towards helping homebuyers save money and perhaps find more affordable housing, tomorrow I’ll introduce the first in a series of posts that will highlight neighborhoods that are HOA-free!

Every so often a home buyer will let me know up-front that they’re not interested in looking at homes in any neighborhood run by a homeowner association.  The most common reasons I hear are that they either don’t want to pay a homeowner association fee or they simply don’t want to live by other people’s sets of rules.  Most homeowner associations (HOAs) have rules and regulations that anyone purchasing in that neighborhood has presumably been made aware of by the previous homeowner via the HOA documents.  Among other things, maintenance fees pay for the upkeep of a community’s amenities… regardless of whether you use them or not.  Many homeowner associations have protocols which residents are supposed to abide by.  This can include completing an application to be submitted to the Architectural Review Committee if the resident wants to make any modifications to the exterior of their home, which is not necessarily limited to the structure as it oftentimes includes major landscaping changes.

On the flip side, there are advantages to living in a community that has a homeowner association.  One of the benefits is that you don’t need to worry about such things as living next to a house whose owner painted it purple or some other color that doesn’t blend with the rest of the neighborhood homes.  Another benefit (which some will dispute) is that it keeps property values up by forcing residents to keep their homes and its landscaping in good condition.  However, this works best when the HOA has some “teeth” (for example: the ability to charge fines when a homeowner breaks the rules).  Homeowner associations also allow residents to share in the costs of maintaining common areas and any amenities available within the community (examples include a pool, spa, clubhouse, exercise room, tennis courts, children’s playground, lighting, gated entries, etc.).

Throughout Florida, homeowner associations did not start to become popular or commonplace until about 20-30 years ago so you’re more likely to find more neighborhoods that are not governed by a homeowners association closer to the coast than further inland.

Calculate Your Monthly Mortgage Payment

Whether you’re a first-time home buyer or a seasoned buyer, take advantage of free online tools to assist you in your decisions. Before your start looking at homes for sale in South Florida, you need to know how much mortgage you can afford.  If you’re not ready to visit with a mortgage broker to get pre-approved for a Florida home loan, here’s a free online mortgage payment calculator you may find useful. 

Moving to South Florida? Some tips for a successful move…

Prime season for moving in South Florida (as in most places) is during the time kids are out of school – typically June through August.  Moving can be among the most stressful things we do in our lives, but with the right planning, your move to South Florida can be made easier.  Following the moving tips provided in the various sites mentioned below may help you turn your next house into a home sooner rather than later.

If you have any questions about intrastate household moving, you can call 1-800-HELP-FLA (435-7352) when calling within Florida, or (850) 488-2221 when calling from outside of Florida.  Another helpful resource is Florida’s Division of Consumer Services website.  Their site offers some good information on moving within Florida (household intrastate moving), including information on how to choose a mover, what the cost of your move will depend on, tips on successful packing, what your rights are, what to know before you sign an estimate or contract, about liability for loss/damage, important terms to know, what to do if you have a claim, as well as a basic moving checklist.

Another resource with useful information is the Florida Movers and Warehousemen’s Association (FMWA) which has established a code of ethics for its members.  If you’re planning an interstate move, you may also find the information at the American Moving and Storage (AMSA) website helpful.  AMSA is a non-profit trade association.  Additionally, you can find articles on how to protect yourself from moving fraud as well as search movers and complaint history at the Federal Motor Carrier Safety Administration (FMCSA) website. 

To lighten your moving load, be sure to also read my previous post on ways you can benefit from having a garage sale which can also provide you with money to help pay for the move! 

Aside from the physically demanding side of moving, remember to notify the utility companies and delivery services when to stop services at your old address and begin services at your new address.  Additionally, your move will be smoother if you notify the post office of your change of address at least 7-10 days before your move-in date.

An Energy Efficient Mortgage?

Chances are you’ve never heard of one.  According to the EnergySavers.gov website, “Energy Efficient Mortages (EEMs) recognize that reduced utility expenses can permit a homeowner to pay a higher mortgage to cover the cost of the energy improvements on top of the approved mortgage. FHA Energy Efficient Mortgages provide mortgage insurance for a person to purchase or refinance a principal residence and incorporate the cost of energy-efficient improvements into the mortgage. The borrower does not have to qualify for the additional money and does not make a downpayment on it. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, or savings and loan association, and the mortgage is insured by HUD.”

If you are buying a Energy Star-certified home or are considering making energy-efficient improvements to your home, learn more about FHA Energy Efficient Mortages and the eligibility requirements.  When you see products that carry the Energy Star label, you’ll know that they are highly energy efficient and kinder to the environment.

Check Your Credit Reports Annually for Free!

Thanks to federal regulations, you can get a free copy of your credit report once every 12 months from each of the top three credit reporting agencies: Equifax, Experian and TransUnion.  Simply go to AnnualCreditReport.com.

Remember that your credit report contains valuable information and experts recommend that you check them at least once a year.  If you’re thinking of buying any South Florida real estate, it’s especially important to check your credit reports as they sometimes have incorrect information… information on which mortgage lenders and credit card companies rely when deciding how much of a credit line to give you or even what interest rate to offer you.  You may request your free credit report online, by phone, or through the mail.  The site offers a comprehensive Frequently Asked Questions (FAQ) page which should answer any questions or concerns.

South Florida Home Inspections

Whether you’re purchasing an older home or new construction, I always highly recommend to home buyers I work with that they invest in a professional home inspection.  Don’t let the fact that it’s new construction fool you into a false sense of peace… even new homes can have defects.  Home inspection companies typically base their prices on the size of a house (square footage), so the larger the house, the more you’ll pay for a home inspection.  Also, some home inspection companies offer additional services (examples include testing for mold or radon) or can direct you to other companies that offer those services. 

If you’re viewing homes in South Florida and will be in need of locating a home inspector, here are a couple of resources that may help in your decision-making process:

• American Society of Home Inspectors (ASHI) – Florida Home Inspectors

ASHI has a code of ethics  and membership categories and requirements.  Also, check out their frequently asked questions on home inspections and view a virtual home inspection while you’re on their site.

• National Association of Home Inspectors (NAHI) – Florida Home Inspectors

NAHI also has a code of ethics (.pdf), standards of practice (.pdf) and different levels of membership.  While on their site, check out their resource library and articles for home buyers and home sellers.

Though some home inspectors or home inspection companies do not belong to either of these companies, home buyers may find the information on these sites helpful.  If you’ve received a referral of a home inspector or company that is not listed in either of these sites it does not necessarily mean that they are not professional or qualified.  Membership to either of the associations listed above is voluntary.

Top 10 Ways to Save Money When Buying or Selling Real Estate

The following tips will either save you money or help you make more money when it’s time to sell your home.  Since you should sell before you buy, I’ll begin with the selling side tips, though some apply to both sides:

1.  Declutter, Clean and Stage Your Home.

There is no getting around it, especially in the buyer’s market that most of the country is currently experiencing.  A home that has been decluttered, cleaned and staged prior to being placed on the market will almost undoubtedly mean a faster sale and a higher sale price for the seller.  Getting a professional home inspection report prior to putting your property up for sale will also alert you to any potential “negatives” the buyer may find.  Check out my previous post, titled “How to Get Top Dollar for Your Home” to learn more about the importance of decluttering, cleaning and staging your home. 

2.  Remember that commissions are negotiable.

Regardless of what you may have heard or read somewhere, remember that commissions are negotiable.  It is true that you get what you pay for and I will go further into that in tips #3 and #4, but for now, just know that you do not have to offer the same commission rate regardless of which company or agent you hire. 

The total commission should be based on your needs in combination with what the agent and company can offer you.  Before you consider asking an agent to discount their commission, it’s important to know that commissions are split four ways – between the listing company, the listing agent, the selling company and the selling agent.  Commissions also don’t necessarily need to be split evenly between the listing company and the selling company (who then pay their agents).  It is important that your listing agreement state the commission percentage that will be offered to the selling side (the company the selling agent works for) because some listing agreements I’ve seen do not specify the breakdown, thereby leaving that decision up to the listing agent and their decision may negatively affect the sale of your home. 

During a buyer’s market it is important that the commission offered to the selling agent be competitive with what other sellers with comparable homes are offering.  The offering of a bonus as incentive is nice but just know that in many cases even the bonuses are split between the selling company and the selling agent.  If you are trying to decide between offering a competitive commission or a non-competitive commission with a bonus, choose the first.

3.  Get in writing what your agent will do for you.

All too often, home sellers will sign a listing agreement with a real estate agent without knowing much about what the agent’s services – especially their marketing plan – will include.  Your Realtor should be able to at least provide you with a basic outline of what their marketing of your house will include, regardless of your price range or your agreed upon commission.   

In a buyer’s market, the minimum you should expect is that at least 3-5 photos be uploaded to the MLS within 48 hours of your property being listed.  The current South Florida MLS vendor allows up to 16 photos on each listing.   The first few days after a property is listed are very important so make sure your agent has plans to make the most of that time.  Additional marketing pieces you may want to require include a full-color flyer with property highlights and a virtual tour.

The marketing of your home is important because how well it is marketed may have an impact on the number of prospective buyers your home is exposed to.  The more (and better) exposure your home gets, the more likely it is that more buyers will see it and possibly submit an offer… which should increase your chances of getting the most money for your house.  I often come across listings on the MLS that have been on the market for many months and offer no photos and nothing in the “remarks” field to help me identify why I should show it instead of another similar house.

4.  Make sure your listing stands out from the crowd.

This is especially true if your area is experiencing a buyer’s market with a glut of inventory of houses for sale.  Aside from competitively pricing your home, the next best way to make your listing stand out from the crowd is to market it as best as possible.  This means including photos of the exterior (front and back), the yard, any especially nice views that can be seen from anywhere in your house, as well as photos of the key rooms buyers are most interested in (kitchen, bathrooms, living room, family room, etc.).  Sometimes it’s also a good idea to highlight the neighborhood, especially if the home is near a park or the neighborhood offers a clubhouse and pool or has an elegant entrance.

Additional marketing can include a virtual tour, preferably one that includes at least a dozen photos, including panoramics.  When considering marketing, think about the types of materials that you get whenever you’ve visited a new home builder’s community.  They almost always include a floorplan of all the models they are offering, as well as a full-color brochure or feature sheet that outlines all the highlights of the home.  Ask your agent if they are willing to provide this service.

One last note… be sure to make your home as easy to show as possible.  In South Florida this typically means putting a lockbox on the door, allowing showings on a moment’s notice and not being present while the house is being shown to prospective purchasers.  Agents pay attention to showing instructions, especially when their time is limited.  The more obstacles you put in their way, the less likely they are to include your home among those they’ll show when their buyer is only in town for a day… unless, of course, it meets all of their buyer’s criteria.

5.  Refuse to pay transaction/administrative fees on top of a commission.

This is something that very few real estate agents will tell you because most brokerages that charge such fees require that the agent pay them if the seller (or buyer) refuses to pay them.  I’ve seen these fees range in cost from about $95 to $695 per transaction (buyers and sellers are charged separately).  The majority of real estate agents will not tell their buyers about this fee until the buyer is ready to sign an offer, at which point the buyer feels obligated to pay the fee. 

I call them junk fees because these fees did not start appearing on contracts or HUD closing statements until several years back.  The fact is that neither the buyer nor the seller have to agree to pay these fees in order to put an offer in or list their home.  The fees are strictly just another profit center for the real estate brokerage, regardless of what they tell you they are for.  If these fees were in any way “mandatory”, then all brokerages would not only be charging them, but be charging the same amount.

6.  Don’t let your emotions rule.

Buyers should avoid getting fixated on any one particular house and be sure to display their best poker face while touring any home where the seller is present.  Sellers should keep check on their emotions especially during the negotiating process.  Just because a buyer places a low offer on your home, does not mean they don’t believe it to be worth more and may actually be willing to pay more.  It helps to keep in mind that though it may be a home to you, it is just a house to the buyers until after they move in.  

Your listing agent should regularly keep you updated of any recent closed sales of comparable homes so that when you receive an offer you feel informed and can respond accordingly. 

7.  Location, location, location should always be “top of mind”.

If you’ve heard it once, you’ve heard it a thousand times!  The three most important things to remember in real estate is “location, location, location”.   There is good reason for this.  The better the location, the more valuable the real estate.  Some millionaires have made a great deal of money investing in real estate simply by being good at foretelling where the next “hot spot” will be and buying property in all the right places.  Do your research and choose wisely.

8.  Education is paramount if you have school-age children.

Getting a “bargain” on the purchase of a new home is worthless if that so-called bargain will mean your school-age children will be provided a less-than-ideal education by the local public schools.  The Florida Department of Education website is full of links that will help parents make informed choices.  Even if you don’t have school-age children, it’s a good idea to be aware of how the local schools rate so that your home will likely be desirable to prospective buyers that do have school-age children.

9.  Buyers can request CMAs, too!

CMA stands for Comparable Market Analysis.  Performing a CMA is how real estate agents are able to establish approximately how much a home is worth.  Most buyers do not request that their real estate agent provide them with a CMA before they place an offer.  The knowledge gained by reviewing a CMA can be invaluable during the negotiating process.

10.  Ask the seller for concessions.

You won’t know unless you ask, and in a buyer’s market it is typical for sellers to offer incentives or make unpublicized concessions of various sorts.  Over the past year, I’ve seen sellers offer buyer incentives such as:

• 3-12 month’s worth of maintenance fee payments
• paying the first 1-3 mortgage payments
• credit for new carpeting, appliances or a necessary repair
• payment of closing costs up to a certain amount

However, keep in mind that if the seller does not need to sell quickly, the property is priced fairly, in good condition and/or in a good location, the seller may have no motivation to offer any concessions.  It’s important to keep all of these factors in mind before placing an offer.