Keller Williams Realty Professionals, Fort Lauderdale
“As massive floods from Tropical Storm Harvey sweep Texas, you might be wondering how fast you can buy flood insurance. Home insurance doesn’t pay to repair damage caused by flooding. You’ll need to buy separate flood insurance to cover tropical storms, torrential rain and overflowing rivers.”
Lynne McChristian, spokesperson for the Insurance Information Institute, an industry organization, said that Florida homeowner insurance rates shouldn’t be affected for one simple reason: rates are set at the state level and are based on what happens within the state. “What happens in Florida stays in Florida, what happens in Texas stays in Texas and that is the way it works in every state,” she said.
Your Guru gets asked every now and again to help a buyer, who fancies himself/herself an investor, locate a condo that can make a little income (or perhaps a lot of income) on the side. You should know that there are virtually NO condos in the area that allow AirBnB, VRBO or short term rentals.
Here’s the reason: The over-supply of condos in 2005 heralded the “beginning of the end’ of the condo building boom in South Florida. We led the nation in the real estate “bust” and in turn, led the nation in the recovery.
Cash investors bought up the bargain-priced inventory and used those condos as rental properties – in any way they saw fit. There were traditional long-term rentals, but those investors also treated their investments like short-term rentals and even as alternative to hotel rooms.
Lending on condominiums ground to a halt because so many condos had more tenants than owners. Most lenders didn’t see condominiums as viable investment for their lending portfolios – they believed they’d lose money on every one of them.
Condominium boards also got an earful from angry residents as tranquil buildings turned into transient communities and party-pads. Associations responded by enacting rules requiring anything from a year of ownership before an owner could rent their unit, to restrictions on lease length, and outright bans on short-term leases. In most cases here in South Florida you’ll find a condominium association will have a minimum of a 6-month lease, or 12 month lease, or a restriction that a unit may only be leased once or twice per year.
Our marketplace and season has matured as well. We don’t get as many snow-birds as in the past who drove the short-term rental demand. The Fort Lauderdale and Miami metro areas are not as tranquil as they once were, contributing to the decline in demand for quiet short term housing.
I had a conversation with a colleague this week about using lock boxes. She hadn’t been able to convince her seller that using a lock box was advantageous and whether having a lockbox on her door was even necessary to sell her home. Those of you that don’t know, a lockbox is an apparatus that usually holds your front door key securely inside; your listing agent will attach it (the lockbox) in a convenient location somewhere on or near your home, making it very easy for the buyer’s agent who wants to show your home to gain access. To get the key out of the lockbox, a Realtor would use an electronic key or an app on their smart-phone to access the lockbox.
In the South Florida market, Real estate agents have become very accustomed to lockboxes and almost expect them for the convenience they afford. Often agents will schedule several homes to show with their buyer and will want to have the ability to quickly go from one property to another without having to worry about keys. If your home is one of the few properties without a lockbox, it puts a monkey wrench in the flow of things. Homes without lockboxes run the risk be tagged “Difficult to Show.”
Without a key on site (in a lockbox) there are usually only few other ways to gain access to your home; none of which agents care for:
Agents don’t have time to worry about keys nor do they like having to schedule around other people’s time such as the home owner or listing agent. Thinking you will always be home or that your listing agent will always be available to accommodate another Realtor’s showing schedule is not realistic. A showing can happen at anytime and arrival time to your home is usually within a broad time-frame which fluctuates within a half hour to an hour. It is usually inconvenient for the listing agent to sit around your home waiting for a showing, and it’s often challenging for a buyer agent to keep a precise schedule.
Agents are like water, they follow the course of least resistance. If your home is difficult to get inside an agent may drop it from their showing schedule.
What would be your objection to a lockbox anyways: Safety? Security? Someone coming in your home unannounced? The South Florida MLS uses a lockbox system call Supra. It is very secure and affords Realtors many options controlling the lockbox functions. Once you see the lockbox firsthand and understand how secure it is (holding your key inside) and all the control you and your listing agent have over others having access to the key inside. The box itself is virtually indestructible and it would be far easier for a nefarious intruder to break down your door instead of trying to gain access to a lockbox. Going that extra step to assure your home accessible at any given time will go along way in helping you sell your home.
Realtors in South Florida using the Supra system can:
You can ask your agent to automatically block off showings (and disable your lockbox) for any specific time or recurring time frames. Unless otherwise objected, I like to restrict home showing times to fit between: 9AM to 7PM daily; before or after that time-frame Realtors can not automatically schedule a showing online and the lock-box goes into complete lock down – The lockbox is completely disabled and no one has access. It’s also good to know for example, when when an owner has a vacation home and wants to “use” it for the weekend they can block out times days or weeks in advance. It’s simple to block out those days and time they plan on being at the property. Scheduling block-out times is very easy. Another option is the do not disturb feature. This gives a seller the ability to disable the lockbox ANYTIME desired.
You have total control when someone can use the lockbox. You can disable the lockbox on your property at any time – from the comfort of your home. Say for instance you are feeling a little under the weather, took the day off from work and are at home bedridden; you called your listing agent and asked them not to schedule any showings for the day but … you keep thinking about the key in the box outside. Not to worry, all you have to do is enter a simple code (provided by your agent) and that code will completely disable/lockout anyone that tries to get access until you turn off the DND function. You can keep it off for minutes, hours or days – you have total control over that lockbox.
Every Time your lockbox is accessed by a Realtor their unique electronic key instantly embeds their personal identification, date and time of access and the information is then transmitted wireless to Supra which can be accessed online. We always know who was at your property and when.
In addition to documenting who has accessed the lockbox, the Sellers’ Gateway also solicits agents’ feedback about your home, keeps a tally of all the showings you had, and will even show future showings. Our sellers love this feature and it’s only possible when using both the Supra lockbox and our ShowingTime scheduling system.
Going back to the question at hand – Should you use a lockbox when selling your home? Of course I feel strongly that it is in your best interest as a seller to use a lock box. A lockbox makes a home much more accessible to buyers and their agents and provides you with a complete and accurate record of showings. The key inside is safe and secure and you always have total control. When I visit for a listing presentation I will bring a sample lockbox with me. I will show you all the features of the lockbox firsthand and how we interact with it.
Having a lockbox at your home increases the number of showings and foot traffic through your property. The buyer’s agent still needs to make an appointment with the listing agent to show the house and no one can gain access to your home without your knowledge.
Low down payment buyers are often surprised to learn that a condominium might not be a good fit for their loan program. Single family homes are not always affordable in areas where buyers are looking, so looking for town-homes might work – if you can find the right one. Some townhomes are just like single family homes as far as ownership is concerned; and others behave more like condominiums. Learn about the differences in the video:
A client asked me about shopping around for mortgage rates this week. She thought that mortgages were similar to car loans or credit cards and that they could vary greatly depending on your credit score and credit blemishes. In reality, mortgage interest rates among lenders are pretty similar. However other features of the mortgage can change such as mortgage insurance, down payment and other terms. Check out the full video:
Conventional wisdom has it that when you sell, and might buy in the same market, you’ll be buying in the same market conditions as well. You’d be mostly right, but not always. It pays to have a grasp of what’s happening in different segments of the market and take advantage when conditions are right.
At the moment, the South Florida market is pretty hot. Single family home inventory is low and good inventory sells quickly – often with multiple bidders. If you’re trying to buy in the “Sweet Spot” right now – between $300,000 and $500,000 – you’re probably having challenging time. It’s even more competitive if you’re shopping for a single family home below $300,000 – the market is best described as “insane.”
But what if you’re in a position to “move up?”
You bought your current home a few years ago or more, and you’ve taken great care of it. Today you find yourself seeking more space, perhaps a pool, or more bedrooms? Your current home that you bought for $250,000 is now in that magical sweet spot and should sell for $400,000 – that would be amazing, wouldn’t it? Except you’re worried that selling at the top of the market means that you’ll also be buying at the top of the market? Maybe not so. This is why having an expert in in the market can pay big dividends for you.
That new home priced between $500,00 and $700,000 might be a pretty good deal right now. The market for homes priced higher than yours is not as hot. Sluggish even? Check out the stats…
Your current home priced between $300,000 and $500,000 is clearly in the heart of “Seller’s Market” territory. However take a look a that $500,000 to $700,000. Almost into “Buyer’s Market” territory.
Check out the next slide. Non-distressed homes priced between $500,000 to $700,000 are even further into the “Buyer’s Market” territory. See what I mean? There’s opportunity here for a buyer in just the right situation. Could that be you?
Check out the last slide: Current market conditions are favorable in several price ranges to take advantage 
of a hot market to sell in, and a sluggish market to buy in. Despite the lower total number of sales in the $200,000 to $300,000 price range, the number is primarily due to lack of decent inventory. Price increases in the same range are steep. So if you’re ready for a leap into the $500,000 to $700,000 price range, moving up from nearly any price point is advantageous.
The same can be said for moving from $750,000 into any price point over $1-million. If you might be interested in a condominium priced over $1-million the market is truly your oyster. Sluggishness in the new-construction market has caused developers to offer a slew of new incentives to capture a dwindling number of buyers that are interested in luxury condos.
I have more information available and if there’s a particular segment of the market that you are interested in, please reach out. I’d be pleased to share what I have.
I love it when a blog post writes itself. This was a conversation I had with clients who were seeking insurance on their new home in anticipation of closing in a few weeks.
Hey Bob, you can get back to me tomorrow, no rush whatsoever. I just realized the quote you sent me is 2000 higher than what my mortgage broker factored in. So that will make my mortgage about $170 more per month and I don’t want that obviously. Do I have any options and if I do what do you think is best?
Yeah – about that…
Your mortgage broker should have known.
Most mortgage brokers in the country use an estimate of what your home owner insurance will be of around 1% of purchase price. Per year. Divided by 12 of course to get your monthly cost. So I could have forgiven a national mortgage broker for doing it that way.
But your mortgage broker is local. She should have known better but perhaps I’ll give her the benefit of the doubt because her company is a national company and maybe their system for generating Good Faith Estimates won’t let her change the number.
But alas we live in hurricane country. And we picked an old house without any hurricane protection. (Which was sorta given considering our price range.). But yeah – this is what home insurance costs down here. It’s breathtaking.
I’ll send your info to another insurance broker and see if he can come up with a better quote/policy but it won’t be much better – like the best I would wager is like $500 less.
I think we went over this once – but of course we went over a bewildering amount of info along the way. I usually coach my clients to plan for 2% as the cost of insurance rather than the piddly little 1% estimate. Better safe than sorry.
What if i was to pay the amount up front? Could i do that? Like for the whole year?
Oh no – wait for it…..
YOU ARE! Twice!
You’ll be paying for a year of insurance up front at closing. AND you will be paying monthly for it. Because you have to pay a year up front and then escrow enough money to pay it again next year. It will be required by your mortgage company. If you made a HUGE down payment, the lender would let you pay your own. But on a nearly-nothing down mortgage the lender wants to be absolutely positive that the bill gets paid every year. So they escrow for it. Taxes too.
Christ on the cross….ok, got it.
I get questions from colleagues around the country asking for referrals here in Florida for agents that can sell a timeshare. Since it’s the magical time of the year when folks start planning for their winter get-aways down to Sunny Florida, here are my tips for buying, and selling, a timeshare.
The first thing to know is that you will over-pay for a timeshare if you buy from the developer or the on-site agent. There’s a tremendous markup for the developer when selling timeshares right on the property. However in established timeshare communities there are often timeshares that can be found on the secondary market for less than half the price the developer is offering, and can be as low as a dollar. Yes. $1. A buck.
But don’t forget that your timeshare costs far more than the purchase. The annual fees can amount to thousands of dollars. Typically around $7,500 per year.
Check out eBay timeshares and see for yourself: http://www.ebay.com/sch/Florida-Timeshares-for-Sale/15897/bn_18950828/i.html
When buying, consider forming a Limited Liability Company to take title to the timeshare. Friends of mine have purchased several timeshares in the name of the LLC and when they decided they didn’t want the timeshare anymore, they just stopped paying the maintenance fees on it. Eventually the timeshare company will take the timeshare back although they won’t want to. The LLC limits the liability to the assets of the LLC so the timeshare company can’t come after you to pay the monthly maintenance in arrears.
If you haven’t planned this far in advance, you probably own the timeshare personally.
You might be able to try the same tactic with the timeshare management company – stop making your monthly maintenance payments and try to negotiate for the company to simply take the timeshare back. However this isn’t always successful and you could wind up with derogatory marks on your credit report because of the late payments. At the very least, expect that your account will be turned over to a collection agency and that they will begin a campaign of merciless harassment by phone and mail to get you to pay your past-due maintenance fees.
One of the largest timeshare selling companies is Sell My Timeshare Now: www.sellmytimesharenow.com however this is more of a listing company for folks trying to sell “By Owner” on their own.
Another is Buy a Timeshare: www.buyatimeshare.com. This company is more like a listing company that charges a fee to broker your timeshare sale.
There are a few companies that will purchase your timeshare from you – often times at a huge discount. But if you just want to get out from under the maintenance charges, this might work for you. They come and go so quickly my recommended companies are no longer in business but a Google search should turn something up. Just make sure that during the transaction, the company takes on full responsibility for the maintenance and any other payments.
There is a Timeshare Users Group with loads of user-generated content about selling un-loved and un-used timeshares. www.tug2.net
Last but not least is Redweek: www.redweek.com where users can post their timeshares for sale or for rent, or try to GIVE them away to other users.
Do your research. A great website to see if there are recent sales in nearly any timeshare resort is Sharket: www.sharket.com
Since we have already determined that a local Realtor may not be able to handle the transaction, and you’re anxious to be free of the monthly maintenance and other responsibilities, know that thousands of other folks are in situations just like yours. Watch out – there are probably dozens of timeshare peddling scams going on at any given time. A good rule of thumb: don’t deal with a company that has any upfront costs higher than $100. You really should only need to pay a “By Owner” type of marketing company for the use of its website, its promotional prowess and good name. You should only pay a company that works as your “Agent” in facilitating your sale after the transaction is successfully consummated or closed.
It’s not just you that has to qualify for a mortgage. Your home does too. Check out the video to learn more about why your new home faces a rigorous qualification just as you do.
When it comes to the hottest type of real estate multifamily investment, investors started to question 
if we are in the bubble.
It is not possible to predict the future with 100% certainty, but the facts support the statement that the multifamily segment of real estate market is outperforming all other types of investments.
We’ve got more than enough demand. Between the Millenniums and the Baby Boomers there is definite increased interest in renting apartments.
Have we thought that too many apartments are being built in Broward County? Since 2006 we did not see any new multifamily construction, therefore the answer to such a question is a strong resounding NO.
We’ve got a long way to catch up with the market demand.
Many of my investors are expressing concern related to a valuation of this type of asset defined by a CAP Rate. In actuality CAP Rate will continue to go down in the coming years. There are multiple reasons for this prediction which we will not be touching on in this publication due to the complexity of the issues.
There is no shortage of interest and/or capital available for this sector of real estate.
The main challenge is to find the willing Sellers in South Florida. It is becoming harder and harder to come by multifamily deals.
What are the main driving factors for such a condition?
1. Foreign investors are looking to bring a capital into the most economically stable country in the world. They can afford to pay a price that would yield an extremely low return because they get the benefit of currency appreciation. 3% CAP Rate for them is not actually a 3% return.
2. Florida is the State with no Income Taxes.
3. South Florida has shortage of land available for development which increases the value of existing properties.
4. And one more Very Important Factor, we have wonderful weather most of the year.
The challenge is to find Sellers that would sell multifamily property at the market value. When someone considers selling, he or she is asking what to do with the money and where it can be reinvested. This information is not to discourage anyone from looking for reasonable (hopefully) Sellers, but provide a brief overview of the particular sector of the market.
As a buyer in South Florida, it is probably a good idea to invest even if the initial return seems too low. Almost all lenders love the product and provide financing with a low interest rate. If buyers exercise their leverage they should be focusing on the Internal Rate of Return versus CAP Rate. Multifamily is considered to be an exceptional investment in today’s market.
I am always available to answer your questions.
I wish I could take credit for this great post, but it was from a colleague of mine. It’s too good not to share, however.
“A past client of mine – who owns a pizza shop – calls me and proceeds to tell me how he is going to buy a property (FSBO) so they can “cut out the brokers fees.” He goes on to tell me how proud he is that he read “THE BOOK” (what book I don’t know) and is following it to investor success.
In the next breath he asks me to run comps, closing costs, give him contacts for mtg reps and title cos and give him advice on what the next steps are to completing the transaction as well as negotiation tips.
I took a deeeeep breath…told him to hold on I was on my way to his shop and that I would be right there to have this convo in person.
I arrived but before I would let him speak I handed him two frozen pizzas I bought at the supermarket – I asked him to place them in his oven so they could cook, cut them and serve them to me at his table before we could talk business. He was appalled – how dare I ask him to do such a thing, don’t I know that HE makes pizzas and that is how he pays his bills? I just looked at him and smiled … I could see the light bulb turn on.”
Data last updated:09/20/2017.
The multiple listing information is provided by Realtor Association of Greater Fort Lauderdale and Miami Association of Realtors from a copyrighted compilation of listings. The compilation of listings and each individual are ©2017 Realtor Association of Greater Fort Lauderdale and Miami Association of Realtors. All Rights Reserved.
The information provided is for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. All properties are subject to prior sale or withdrawal. All information provided is deemed reliable but is not guaranteed accurate, and should be independently verified.