Law Office of Ryan S. Shipp, PLLC

Palm Beach County Real Estate Blog

Why home buyers don't need to shop during the summer

Shopping for a home during the fall months may be ideal for Florida residents. It may represent a period in which there are fewer people looking for homes, and this may result in fewer offers being made on those properties. When there aren't multiple offers on a property, it reduces the odds of getting into a bidding war, which may allow a person to get a home at a fair price.

Sellers may also be more willing to negotiate with buyers when there is less competition. Listings that are available in the fall generally see less traffic than during the spring or summer months. Sellers may be willing to reduce their asking price, help pay closing costs or take care of items around the house such as replacing carpets or replacing the roof.

Pop-up stores offer options

Major disruptions in the retail sector across Florida and around the country have created changes within the commercial real estate market. Many retailers have either gone out of business or have retreated from brick-and-mortar stores to concentrate on e-commerce efforts. As a result, landlords and property managers are actively seeking new commercial tenants while entrepreneurs are likewise seeking opportunities.

One concept that continues to grow is that of the "pop-up store". This is a business that does not sign a long-term lease in a commercial development, such as a shopping center or strip mall, but instead moves into a space for a short period of time, sells its products, and then closes.

Do you know what unlawful detainer means?

An unlawful detainer action is a way for a landlord to remove a person who refuses to leave a rented residence  despite other efforts. As a Florida landlord, you may find yourself dealing with the unpleasant process of eviction and tenant removal from time to time, and it is in your best interests to know how to do so legally and peacefully.

Even though you may own the property, there is a still a process you must follow when attempting to evict a person from your property. Following the appropriate steps can ensure that you do not have to face any unnecessary complications in the future while still protecting your interests as a landlord.

Increasing home prices make ARMs more popular

As property values increase, Florida residents may be willing to get creative when it comes to financing a home purchase. According to Inside Mortgage Finance, there was a 40 percent increase in adjustable rate mortgages between the first and second quarters of 2017. While they offer lower rates and a rate that is fixed for five years, they may be riskier in the long-term compared to the traditional 30-year fixed mortgage.

Over the same time period in 2016, the number of ARMs increased by just 15 percent. This may indicate that buyers are struggling to afford homes as prices continue to increase. Home prices were 6.9 percent higher in August 2017 than a year earlier according to CoreLogic, and 6.7 percent higher in July 2017 than in the previous July. It is thought that the increase in home prices is due in part to mortgage rates that have stayed low.

How to effectively do due diligence

Those who are selling commercial real estate in Florida generally want the deal to close as soon as possible. Those who are prospective buyers want to make sure that they are getting a quality property. Therefore, it isn't uncommon for buyers and sellers to have different ideas as to how the due diligence process should play out. In some cases, buyers may want more time for due diligence because it also buys time to find financing.

In many cases, however, sellers will not provide contingencies related to financing the purchase. Sellers are generally aware that buyers may begin doing research into a property before making an offer. Therefore, they may feel as if there isn't a need for a lot of time to do further diligence on it. Typically, sellers want a deal to "go hard" because that means that they can keep the buyer's deposit.

Why a buyer should get a pre-approval letter

When a Florida resident is ready to start the home hunting process, it may be worthwhile to get a letter of pre-qualification. This is a letter from a lender saying how much an individual would qualify for based on income and other information provided to that lender. This is not the same as a letter of pre-approval, which is an estimate based on information provided on tax returns and other documents.

However, the loan will not actually be approved until a property has been chosen and additional paperwork has been submitted. While an individual may decide to include either a pre-qualification or pre-approval letter in the offer, the pre-approval letter generally carries more weight. This is because a seller knows that the buyer is likely able to get financing to close the deal in a timely manner.

Low supply pushing housing prices up as demand rises

The real estate in Florida has enticed people to the warm climate for years. However, buyer demand continues to outstrip the supply of homes for sale. A nationwide housing market analysis by CoreLogic shows that prices are rising because of the tight inventory. According to the National Association of Realtors, home prices were 6.7 percent higher compared to last summer while the number of property listings retreated by 9 percent. The association's chief economist said that housing starts were weak and that investors were showing little desire to sell.

This situation prompted CoreLogic to designate 46 percent of the top 50 markets in the country as overvalued. This classification emerges when home prices exceed by 10 percent a value level that can be maintained for the long term.

Do you know what your HOA can and cannot do?

If you live in a Florida neighborhood with a Homeowners' Association, you would be wise to know where your rights as the property owner end and those of the HOA begin. This is useful knowledge to have in case you find yourself in a situation in which you disagree with an HOA decision or regulation that affects your ability to use and enjoy your property. 

The HOA exists to protect the overall interests of the neighborhood. Volunteers from the neighborhood generally comprise the leadership of these organizations, and their job includes things such as the management of common areas, pool cleaning and landscaping parts of the neighborhood property.

Pending home sales plunge again across the US

While the housing market has enjoyed gradual increases in property values, buying throughout Florida and the rest of the nation are suffering from a dwindling supply of options. In late August, the National Association of Realtors published its closely watched pending home sales index, which has posted lower numbers on four occasions over the last five months. On a year-over-year basis, pending home sales have decreased by 1.3 percent while the index has lost 0.8 percent in July.

Low inventories and tight supply are two reasons that explain the drop in pending home sales, but there is also the issue of home affordability and market uncertainty. Although the American real estate market has been in recovery mode since 2012, wages are not rising along with home prices. In July 2017, the number of homes listed for sale in the U.S. dropped to 1.92 million units, which represents a loss of 9 percent over the last 12 months. The national median sales price of $258,300 is not something that many prospective buyers can afford.

Things older adults should consider before buying homes

Florida residents who are older and who are thinking about purchasing homes might want to think about several factors before they decide to proceed. Senior citizens who are nearing the age of retirement may have more things to think about than younger adults who are considering buying a home.

If people are preparing to retire, they should think about whether or not adding a mortgage payment will work with their plans. Considering whether or not the homes fit the lifestyles that they would like to enjoy during retirement is important. They should also consider whether or not the home purchases are smart for them financially. They should consider whether or not the mortgage payments will take up too much of their retirement incomes and if they will be able to afford the payments over the life of the loan in all circumstances, including if their spouses pass away.

Law Office of Ryan S. Shipp, PLLC | 814 W. Lantana Rd., Suite 1 | Lantana, Florida 33462 | Phone: (561) 699-0399 | Map & Directions