Sales up and prices down in Florida

Here's a topic covered in many Florida - and nationwide - newspapers today as figures for the second quarter of 2009 were revealed. They show that in the period ending 30th June, house sales in Florida rose by an impressive 23% compared to the same period last year. Sounds promising, but it's tempered somewhat by the accompanying news that median prices fell 29% during that quarter and now stand at $143,600. For condos, sales rose by 29%, whilst median prices fell even greater - by 38% - to $111,100.

Across various regions of Florida, sales increased by healthy margins whilst prices tumbled. The Fort Myers region saw the highest increase in sales, with numbers there almost doubling, whilst prices fell by over 50%. Part of the reason for such a high increase in sales is the current large supply of properties attributed to over-building prior to the property crash.

The area to post the second highest rise in sales was Miami, which saw a 73% increase, whilst median prices fell by over 30% to $195,000.

The greatest reason for these falling and currently low prices is the large number of foreclosed properties being sold this year, which are pushing prices right down.

Other areas to show increases in property sales for the second quarter of 2009 include Orlando, Tampa and Jacksonville.

As a comparison, sales for the US as a whole fell by 2.9% for the period, but still stand in good stead for the year.

So, it seems that there's a healthy amount of demand out there. Prices may continue to fall, but low-priced foreclosure properties are a large factor as to why median prices are so low out now. If you're looking for a Florida property, you might consider waiting further to hope that prices fall even more - but I get the impression there won't be many larger price drops. Moreover, make sure you don't leave it too late to snap up the property that you actually really want - it may already go!

Telephone Fraud Scam by Persons Claiming To Be From the Board of Registration of Real Estate Brokers and Salespersons:

The Board has learned that a few of its licensees have been targets of a telephone fraud scam. The caller seeks to obtain a licensee’s credit card number and/or a social security number by stating that the Board has implemented a fingerprinting requirement as mandated by Massachusetts state law. Please be advised that,

• There is NO fingerprinting requirement under Massachusetts state law for the Board


• The Board would never call and request any credit card or social security number information from a licensee.
• 
  

Briefly, this is how the scam works:

• A person claiming to be from the Board calls a licensee and states that there is a new Massachusetts law that requires fingerprinting of all real estate agents.


• The caller then informs the licensee that he/she has failed to respond to a letter regarding this matter and that his/her license is scheduled for suspension if they do not comply.


• The licensee is then asked for credit card information to process the “fingerprinting application” over the phone.


• In at least one case, the person making the call then asks the licensee to “confirm” their social security number and gives them an incorrect number. When the licensee states that the number recited by the scammer is incorrect the caller then demands the correct one in order to “process” the application.

This is a scam and licensees should not give any information to the caller. These calls are fraudulent and the caller is NOT from the Board. Again, there is no fingerprinting requirement under Massachusetts state law for the Board and the Board would never call a licensee and ask for any credit card or social security number information. Any licensee receiving such a call should not give or confirm any information to the caller.
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Real Estate Encumbrances

An encumbrance is a claim or liability against real estate, held by someone other than the fee owner of the property that affects the title to the property, and therefore its value. It does not confer any possessory interest, and therefore is not an estate, and does not necessarily prevent the transfer of title. Encumbrances can include liens against the property, deed restrictions, easements, and encroachments.


Deed restrictions are private agreements that restrict the use of the real estate in some way, and are listed in the deed—hence the name. The seller may add a restriction to the title of the property. Often, developers restrict the parcels of property in a development to maintain a certain amount of uniformity.

Easements

An easement is the right of someone other than a fee owner to use a particular parcel of land for a particular purpose—most often it is the right to cross the property.

An appurtenant easement (aka appurtenance) is a right to use adjoining property that transfers with the land. The parcel of land that benefits from the easement is the dominant tenement, whereas the servient tenement is the parcel of land that provides the easement. The appurtenant easement always transfers with the land unless the owner of the dominant tenement releases it.


An easement in gross is an individual interest to use the land—it benefits a person or an organization, in contrast to an appurtenant easement, which benefits the land. Often, businesses, such as railways and phone companies, hold commercial easements in gross so that they can conduct business. Utility easements, which allow utilities to run electric wires or pipelines across properties, are also easements in gross.


Commercial easements in gross can be assigned or conveyed. Generally, a personal easement in gross is used to allow a neighbor to cross someone else’s land, but unlike an appurtenant easement, does not transfer with the property and ends when the owner of the easement dies.

The Creation of Easements

Easements are created by either express agreement or by implication. In many cases, an owner creates an easement for himself when selling a parcel of his land or gives an easement to a buyer of the property to pass over his land because of convenience or necessity.

One of the rights of owning land is to be able to enter or leave it, but some parcels of land are isolated from public thoroughfares by other private properties. In these cases, an appurtenant easement is created by a court order as an easement by necessity, because the dominant tenement owner has no other way of entering or leaving his property.

An easement by condemnation is created by eminent domain—owners of the servient tenement must, however, be compensated for providing the easement.

The Termination of Easements

An encroachment is an extension of some physical structure, such as a building, driveway, fence, or tree over the property lines from an adjoining property. Encroachments can affect the marketing of the title, and should be noted in a listing agreement or sales contract.

Encroachments can best be determined by a spot survey, which is a survey showing the locations, sizes, and shapes of the buildings on a lot. Visual inspection is not as accurate and should not be relied upon if there is a question of an encroachment.


The owner of the land subject to the encroachment can either sue for damages or have the structure extending over the property lines removed or trimmed back. However, the owner of the encroaching structure may have an easement by prescription if the time period of the encroachment exceeds the prescriptive time stipulated by state law for an easement by prescription.

Rooming House Returns

OVER the last decade, the image of Harlem as a place of vacant brownstones and broken-down rooming houses has faded, as many buildings have been turned into apartments and single-family homes.


But now Stanley McIntosh and his wife, Rosalinda Cooper, who live in the restored brownstone on West 132nd Street that he grew up in, are worried that the old days might be returning: A developer, caught short by the plunging real estate market, is converting a nearby 18-foot-wide brick row house back into a rooming house.


Mr. McIntosh, the president of the Neighbors United of West 132nd Street Block Association, has begun a campaign against the rooming house. The developer, Gerald Migdol, said that the rooming house was legal, and would provide needed housing “for the working poor and working lower-middle-class people who couldn’t afford a market-rate one- or two-bedroom.” He confirmed that the Department of Buildings was reviewing the permit.


Plans for the house, at 228 West 132nd Street near Adam Clayton Powell Jr. Boulevard, show eight single-room-occupancy units, each one about 150 square feet, with bathrooms but not kitchens, on the second and third floors. A ninth single room will be in the basement, along with a two-bedroom apartment. The parlor floor will house a two-bedroom apartment and a communal kitchen.


The plan for the rooming house began in adversity. Mr. Migdol, a longtime Harlem developer, had bought up five town houses on the block, renovating and selling them to families. He sold one house in 2005 for $1.5 million, but in July of this year he sold another for only $1.05 million.


He paid $875,000 for No. 228 in 2005 and filed plans to convert it to a two-family house, but soon realized the numbers didn’t work.


Neighbors became alarmed when they noticed 16 toilets being delivered to the house, and alerted city officials. The work was stopped, but not before neighbors noticed a new partition in the middle of a large arched window on the parlor floor facing the street.
Last year, Mr. Migdol filed new plans showing the rooming house units. He says that the city no longer permits residential property owners to create rooming houses, but that they can restore rooming-house units previously on the property. The window partition has been removed.


Federal Section 8 rent subsidies could make the rooming house very profitable. City officials say the government pays monthly subsidies of up to $930 for each small unit, and $1,500 for each two-bedroom apartment, for a potential rent roll of more than $11,000 a month.


Mr. Migdol said he hoped to rent to veterans and the elderly. But city officials note that the homeless, people displaced from their homes and victims of domestic violence get preference for the vouchers. The property awaits a certificate of occupancy, Mr. Migdol said, though building records show a stop-work order on it.

Luxury real estate vultures

When an ex-managing director of hedge fund Fortress teams up with Sotheby's in a real estate venture, you know something funny is going on in the luxury residential market.

But that's basically what happened last month when George Graham, formerly of Fortress's Drawbridge Special Opportunities Fund, joined a real estate auction house that works closely with Sotheby's (BID) International Realty and other firms to sell off luxury homes.

Graham is CEO of Concierge Auctions, founded in 2006 by a well-connected broker in South Florida. The company is looking to make hay from an uptick in luxury real estate auctions.

"There is a pipeline of multimillion-dollar properties that are underwater," says Graham. "In most of these areas the homes aren't selling. There's a multiyear supply."

Concierge's pitch to a seller is simple: Your house won't sell on the open market for years. You may not get the price you want with an auction, but it's better to have an exit than to be stuck with the carrying costs on, say, a $20 million home -- or worse, enter foreclosure.

But the real focus for Concierge is on the other half of the equation: the lenders, who in this segment of the market are increasingly looking for an exit too.

Since the costs to the bank when a luxury home goes into foreclosure are so much higher than on a regular home, lenders are open to negotiating short sales, in which the bank accepts less than the amount of the mortgage.

With home sales stalled, an auction is the fastest way to a price. "You get market value without dragging out the process," says Graham, who sees a "wave" of high-end mortgages headed for default.

Concierge is hoping Graham's relationships with lenders from his years at Fortress (FIG) and, before that, investment bank Salomon Bros., will generate business from banks looking for an out. (Concierge takes a cut of the final sale.)

In July the company auctioned off a Boca Raton, Fla., mansion owned by the head of private equity firm Royal Palm Capital Partners. The property was on the market for three years, cut from $24.9 million to $21.9 million. The final price won't be revealed until the deal closes, but it probably won't cover the mortgage, said to be $12.5 million.

Five Tips for Buying a Foreclosure

We've been working with a number of home buyers whose home of choice happens to be a bank-owned property. Yes, it has been interesting.

walking into a home and finding an empty room where the kitchen should be, or finding rooms with missing light fixtures, etc.

But, for some the property they want to call "home" is part of the "distressed" sale market. And, with this type of property/seller, it can be quite a different transaction.

Here are five tips for buying a foreclosure:

• Be patient. The banks work on their own time frame, and this does not include weekends or evenings. Most have files and offers stacked up, and are trying to get through them as quickly as possible. The banks don't want the properties on their books any longer than they have to.


• Do your due diligence. There are fewer disclosures on bank-owned property, and as such, the risk is with the buyer. Have inspections so that you are comfortable with your level of knowledge about the property condition. Some lenders will provide a termite inspection/clearance, some will not. If not, consider paying for one yourself. Inspect - inspect - inspect.


• Know your budget. Yes, bank-owned properties are generally below "market" value. However, we are seeing multiple offers on these properties, with the eventual sales price going for more than asking. When you combine the increased sales price, the amount of money you spend on inspections, and then include necessary repairs (that are funded with cash out of pocket) ... make sure the property really does fit your budget.


• Pick yourself up and do it again. You may not get the first property you make an offer on - or the second - or the third. If your offer is not selected, then move on to another property. There are more homes coming on the market every day.


• Use a real estate agent. Using a real estate agent will give you access to the greatest number of homes; and with their professional guidance and expertise, will help you succeed in today's real estate market.

Dubai house rents down 30% since March

House rents in Dubai continued to decline this month by as much as 30 percent but there were signs of stabilization in some areas, a real estate consultancy firm has said.

Landmark Advisory said today that rents in many areas of Dubai have decreased significantly over the past five months, but despite this, there are exceptions to this trend with some unit types in preferred developments performing well.

Apartments in some areas have increased by 11 percent for 1-bedroom units and by 6 percent for 2-bedroom units while 3-and 4-bedroom villas and 3-bedroom villas in some areas have returned to March 2009 rents or increased marginally, Landmark's analysis showed.

Commenting on signs of rents increasing, Charles Neil, CEO of Landmark Advisory, said, "The increasing rents can be attributed to a lack of supply, many landlords have removed inventory from the market to avoid renting out at current market rates while others may be out of town during the summer period and consequently unavailable.

"We predict that the month of Ramadan will also affect the leasing supply as many landlords are waiting until Q409 to reassess the market," he said.

The report highlighted that demand for property was particularly strong during June and July due to a significant amount of rental contracts ending around this time.

Real Estate Outlook: A Bright Market

The stock market may be jumping around and jittery, but housing numbers are headed in just one direction, and at least for the time being, that's better and better.

Pending home sales jumped again. They were up by 3.2 percent for the month of July, according to the National Association of Realtors. That's the sixth straight month of increases. The pending sales index is now at its highest level since June of 2007, and is 12 percent above a year ago.

Pending sales, of course, point ahead to closings scheduled within the coming two to three months. Lawrence Yun, chief economist for the National Association of Realtors, pointed to two key factors that are pushing up market activity - The near record affordability of house purchases caused by moderate prices and low mortgage rates.

Meanwhile, evidence continues to mount that prices are turning around in growing numbers of markets around the U.S. Freddie Mac's most recent home price index, released last week, showed national prices up by an average 2.7 percent.

Clear Capital's home price index, which digs into thousands of Zip codes and small neighborhoods, reported even larger gains. Prices were up by 7.3 percent during the period July 27th to August 25th. That may sound exceptionally high, but remember: Clear Capital was the first to detect the earliest hints of rising prices months ago, well ahead of Case-Shiller and others.

Boom-to-bust markets like Phoenix are even seeing higher prices along with huge sales increases. MDA DataQuick reports that sales of houses and condos were up 28 percent in Maricopa and Pinal Counties in July over year-earlier levels. And median prices inched up -- by two percent in July over June - as the percentage of distressed sales among total sales declined to the lowest level since last October.

There was more good news on the mortgage front with average rates on thirty year fixed rate loans declining to just below 5.2 percent last week, according to the Mortgage Bankers association's national survey. Fifteen year rates averaged four point six for the week.

Looking at the larger economic picture, the Mortgage Bankers Association's top forecaster, Orawin Velz, continues to predict that the recession will be over shortly - or already is over. She cited rising consumer expenditures - up two percent in the third quarter compared with a minus one percent in the second quarter. Plus manufacturing output is up, and new layoffs declined last week.

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CALIFORNIA HOMEOWNERS ARE BEING TARGETED BY CON ARTISTS OFFERING FORECLOSURE ASSISTANCE:

The U.S. Department of Housing and Urban Development (HUD) today warned that California homeowners are increasingly becoming the target of "scammers" and con artists trying to loot families of their bank accounts with phony promises to avoid foreclosure.

The U.S. Department of Housing and Urban Development (HUD) today warned that California homeowners are increasingly becoming the target of "scammers" and con artists trying to loot families of their bank accounts with phony promises to avoid foreclosure.

"Foreclosures are hurting homeowners and communities, and now we see "financial looters" plying a "grab-and-go" strategy to con families out of their scarce dollars with empty promises and phony claims," said Caroline H. Krewson, HUD Deputy Regional Director for Region IX. "It's criminal when it happens in the wake of a natural disaster, and it's just as criminal when it happens to families facing financial disaster."

Congress has provided the U.S. Department of Housing and Urban Development and the Treasury with resources to assist families facing foreclosure at no cost to the homeowner.

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Ten Tips for Homebuyers:

What You Should Know Before Buying a Home

• Before you start looking for a home, get pre-qualified for a loan.


• If you have marginal or bad credit, consult your lender


• You will need a down payment.


• You will need funds for closing costs


• Some loans have "points" and some do not.


• Should you select a mortgage with a fixed rate or an adjustable rate?


• Be aware of the two main types of loan categories.


• If you are a low or moderate income homebuyer, there are special programs designed to help you.


• Why might I have to pay mortgage insurance?


• Many organizations offer home loan counseling to prospective homebuyers.

1.Before you start looking for a home, get pre-qualified for a loan. Banks, credit unions and mortgage bankers make home loans; mortgage brokers process them. The lenders will take an application, process the loan documents, and see the loan through to the funding stage.

2.If you have marginal or bad credit, consult your lender. You may be able to qualify for a loan depending on how long ago and what reason(s) caused the bad credit. A lender should be able to advise you on whether your credit history will prevent you from qualifying for a home loan.

3.You will need a down payment. Down payment requirements vary depending on the type of loan. Many down payment assistance programs exist. These programs may loan or grant you the funds necessary for the down payment. Consult with a lender about programs available in your area.

4.You will need funds for closing costs Closing costs are charges for services related to the closing of your real estate transaction. They include, but are not limited to:

Escrow fees charged by the company handling the transaction

Title policy issuance fees charged by the title insurance company

Mortgage insurance fees

Fire and homeowners insurance

County Recorder fees for recording your deed

Loan origination fees

5.Some loans have "points" and some do not. A point is a loan origination fee equivalent to 1% of the loan amount. Together with the interest rate they constitute the yield on your loan for the lender. Some lenders charge a higher interest rate to compensate for charging no points. It is important to comparison shop lenders to make sure your loan is at a competitive yield.
6.Should you select a mortgage with a fixed rate or an adjustable rate? The answer to this question depends on whether mortgage rates are at a high or a low point when you purchase, and on how long you plan to live in the home. If rates are high, an adjustable rate might be attractive since subsequent rate drops could reduce your monthly payments. Additionally, lenders may offer a low rate during the first few years of an adjustable mortgage to make it appealing to you. If interest rates are low you might want to take a fixed rate to protect yourself against the possibility of rising interest rates.

7.Be aware of the two main types of loan categories

Conventional Loans. Conventional mortgage loans are available with fixed or adjustable interest rates. Some loans may require mortgage insurance.

Government Loans. These include Federal Housing Administration (FHA) fixed and adjustable rate mortgage loans, and Veterans Administration (VA) fixed rate mortgage loan

8.If you are a low or moderate income homebuyer, there are special programs designed to help you. These loans are available through private lenders, as well as local and state housing agencies, like the California Housing Finance Agency (CalHFA). Most lenders specializing in real estate mortgage loans are aware of these types of loan programs.

9.Why might I have to pay mortgage insurance? Mortgage insurance protects the lender from potential loss if you should default on your mortgage loan payment. Generally, conventional loans that require larger down payments do not require mortgage insurance. Mortgage insurance is always required on FHA mortgage loans.

10.Many organizations offer home loan counseling to prospective homebuyers. These organizations provide classes for homebuyers to cover the steps to homeownership. They will cover home selection, realtor services, lenders, loan programs, homeownership responsibilities, saving for a down payment, and other important pieces of information. Many first-time homebuyer programs require homebuyers to attend this type of class to be eligible for selected programs.

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Real Estate Business Guidance

Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings, specifically property that is fixed in location.Real estate law is the body of regulations and legal codes which pertain to such matters under a particular jurisdiction and include things such as commercial and residential real property transactions.

• Broker Compliance Evaluation Manual


• Broker Self-Evaluation (RE 540)


• Ten Most Common Violations Found in DRE Audits


• Most Common Enforcement Violations


• Predatory Lending Prevention


• Internet Business/Advertising FAQs


• Internet Business/Advertising FAQs


• Mortgage Loan Brokering in California FAQs


• Sample Trust Account Review (TAR) Reports


• Threshold Mortgage Loan Broker (MLB) Information (RE 4633)


• Real Estate Law


• Reference Book


• Disclosures in Real Property Transactions


• Trust Funds


• Unlicensed Assistants

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