Law Office of Ryan S. Shipp, PLLC

Palm Beach County Real Estate Blog

Tips for success when buying a home in Florida

Shopping, financing and negotiating represent the major aspects of buying a home. A prospective homebuyer should consider every element in terms of meeting current needs and preventing future challenges. Setting a budget marks the first step, and a buyer should pick a figure that does not impose financial hardship. Since a future job loss or pay cut might make high payments impossible, buyers should be somewhat conservative about what they can afford.

Because a trustworthy and knowledgeable real estate agent could make the difference between happiness and financial disaster, buyers should interview several agents until they find someone who meets their criteria. When making an offer on a property, a down payment of at least 20 percent of the value is ideal. A down payment of that size will allow a person to avoid paying costly mortgage insurance, also known as PMI.

CRE market data sends mixed signals to investors

Real estate investors in Florida and around the country have become more cautious in recent months as soaring prices have prompted many industry experts to predict that commercial property values are nearing their peak. Reports of a developing asset bubble remind many investors of the losses they suffered during the 2008 financial crisis. However, these concerns were not enough to prevent the Moody's/RCA Commercial Property Price Index from reaching a new high in April.

According to the CPPI data, commercial real estate values rose by 7 percent between April 2016 and April 2017. However, it is figures like these that give many investors pause. Market corrections often follow times of great exuberance, and reports suggest that many investors are taking a more conservative approach because they believe that prices will soon start to fall.

Interest rate increases not yet affecting CRE lending

Figures from the financial sector reveal that banks in Florida and around the country have been making fewer loans since the U.S. Federal Reserve started inching interest rates upward in December, but the commercial property sector has so far been able to avoid this trend. However, experts say that this is likely due to the nature of commercial real estate loans and not a reflection of the overall strength of the property market.

While residential mortgages generally have terms of up to 30 years, the commercial real estate loans made to developers to get commercial projects off the ground must usually be refinanced or paid off within a far shorter period of time. The Federal Reserve announced its third interest rate increase in six months on June 14, and the flurry of commercial property loan activity during the first quarter may be a sign that developers are seeking to refinance their loans early to avoid further rate hikes.

Saving for a home is difficult for the younger generation

A survey conducted by Apartment List paints a bleak picture for the future of home ownership in Florida and the rest of the United States. It focused on the 'millennial" or the 18-34 year old age group of Americans and their ability to afford a new home, and the results were summarized in the Wall Street Journal in May.

The survey conducted by the website Apartment List showed that a large majority of this age group desires to purchase a home in the future. That is the good news. The bad news is that most are not saving for a down payment. More than two thirds of millennials have saved less than $1,000 to purchase a home. Less than a third believe they can save enough for a down payment within three years.

Deed in lieu of foreclosure: Is it the right option for you?

Financial trouble can affect almost every area of your life. It can be a stressful, overwhelming time, especially if you are facing threats of the loss of your Florida home and other consequences. Foreclosure may have a significant impact on your credit and your opportunities in the future, but even when you are hopelessly behind on payments, foreclosure is not necessarily your only option.

There is an option that could be available to you that may allow you to walk away from your home, thereby releasing you from the responsibility of making payments. This is called a deed-in-lieu of foreclosure, also known as a mortgage release. If you can no longer afford your home, you may find it useful to explore this option by speaking to a qualified attorney.

Commercial real estate buying slower

Florida residents may know that real estate investment has slowed to a crawl in many parts of the country. This is true even as a real estate developer was elected president in November 2016. In New York City, sales fell to $4.3 billion, which is a 58 percent decrease from the same period in 2016. Sales dropped by 18 percent overall in the United States during that time period.

The drop itself has little or nothing to do with Donald Trump becoming president. Instead, it has to do with the idea that commercial real estate prices may at or near their peak. It is also thought that cities such as San Francisco and New York City are overbuilt. However, there are some concerns over Trump's tax plans and whether his agenda can be successfully carried out.

Standard allowance increase could cut home prices

A part of the Trump tax reform plan aimed at simplifying the Internal Reveneu Code may save millions of households money on their returns, but it has also engendered sharp criticism. At stake is the home mortgage interest deduction, which causes millions of homeowners to itemize their taxes each year for savings beyond the standard deduction. By raising the standard deduction, many will no longer need to itemize to receive the same refund.

Residential real estate industry groups have already spoken against the change. The National Association of Realtors, the largest industry group in opposition, claimed that residential property prices could fall 10 percent nationally and hurt homeowners in the process. Moody's chief economist claims that an average 4 percent price reduction was most likely.

Commercial properties offer investors a number of benefits

Real estate investors in Florida and around the country often begin by purchasing single-family residences, but many of them soon switch their focus to commercial properties like stores, offices, restaurants and warehouses. Commercial real estate generally provides higher yields, has less demanding tenants and is not as risky as residential property speculation. For landlords, the difference between commercial and residential property investing can be significant.

It is not uncommon for residential landlords to be called out on weekends or evenings to mediate petty squabbles between tenants or address a minor issue like a running toilet or an unusual smell, but companies that rent commercial space will rarely make unreasonable demands. Commercial tenants may also employ their own maintenance staff to take care of minor repairs, and they sometimes cover some of the expenses traditionally paid by residential landlords.

How to transfer property

Florida residents may have heard of the term "conveyancing". It means that real property is being transferred from one party to another. An attorney will work to create documents that make the property transfer official. Legal counsel will usually take steps such as determining what type of documents are most appropriate for a given transfer, who must sign the documents and how new owners will hold the property.

When transferring real estate, a deed will be created. A warranty deed promises that the seller holds a good title to the property at the time of the transfer. A quitclaim deed is created when an individual relinquishes his or her interest in a property. However, there is no promise that the title is good or that the person transferring the interest in the property owns it.

Choosing the right structure for your small business

Starting a small business in Florida is an important and exciting step for any entrepreneur, but you would be wise to move carefully and cautiously through the initial phases of this process. Having the right legal structure in place is not only smart, it can help you avoid complications and issues in the future.

Choosing the right business structure for your business is not always an easy process, but you do not have to make these important decisions on your own. The right choice for you depends on the type and nature of your business, and an experienced business law attorney can help you choose the option that lays the foundation for a strong and profitable future for your company.

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