Category Archives: Advice for Home Sellers

0 How To Choose A Real Estate Agent

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Where are all of the good real estate agents hiding?

Well, they aren’t hiding, really. But it can feel that way. The push for immediacy along with a saturated real estate industry can lead to those in need of an agent being inundated with options without any clear direction on how to choose a real estate agent who is right for them. 

Automation is common these days, which means that many agents will be quick to ‘respond’ to submitted inquiries for properties across the web. Still, the fact of the matter remains that the first agent to reach out may not be the right agent for you.

An agent’s experience level matters. An agent’s market knowledge matters. An agent’s access to marketing platforms matters a ton!

A home is a huge asset – it takes time to find the best partner to guide a buyer or seller through the real estate transaction.

 

Let’s Look at the Numbers

There are over 187,000 Realtors in the state of Florida. There are over 55,000 agents that belong to the Miami Association of Realtors. However, Florida Realtors reports that there were just shy of 395,000 condo and single-family home sales in Florida in 2018. In Miami, that number falls to less than 91,000. In the core Miami Beach markets, it falls to just shy of 2,500. Assuming that there are two transaction sides to each sale, these numbers can tell us a few things:

  • The average number of homes sold in Miami per Miami Association of Realtors member in 2018 was only 3.3 homes. This low number shows the saturation of less experienced real estate agents in the market, as experienced agents have no problem far exceeding this number.

  • Less than 3% of Florida Realtors closed a sale in the core Miami markets in 2018.
  • 9% of Miami Association of Realtor members closed a sale in the core Miami markets in 2018.

 

Despite the fact that a home is often a person’s largest asset, National Association of Realtors statistics says that there is a 72% chance the customer will do business with the first agent they talk to. Combine this with the fact that there are many less experienced agents readily available, you don’t always have a recipe for success. Only 69% of sellers and 74% of buyers would use their agent again. That’s 26% – 31% of people who feel some level of regret for the partner they chose to help handle their largest asset! 

Anyone who wants to avoid this type of regret needs to feel comfortable spending a bit of time finding the right agent, and they need to know what to look for. 

 

How To Choose A Real Estate Agent

  • Market Knowledge

Look for an agent that knows the market like the back of their hand. Some markets can be quite volatile, so a high level of market knowledge is required to make sure that you are on the receiving end of a great deal. The Miami market, for example, is quite unique. It is full of international investors, vacation home buyers, and neighborhoods with vastly different vibes and price tags. A great real estate agent knows not only how to navigate this, but how to leverage it.

  • Marketing Capabilities

Home sellers need to make sure that they are partnering with an agency that can get their property in front of buyers. An agency’s marketing capabilities is endlessly important. Sellers should ask the prospective agent what marketing tools they have at their disposal, and they should validate if these tools are working by getting an idea of their average days-to-sale. RE/MAX agencies such as RE/MAX Paradise often have access to more robust marketing opportunities than some others.

  • Range of Experience

Don’t be afraid to ask about your agent’s experience. Don’t be afraid to ask questions in general! You should interview at least 3 agents before making your final decision. Some questions to consider asking: 

    • How long have you been selling real estate?
    • What is your ratio of sellers to buyers?
    • What is your average number of clients?
    • What are your core markets?

  • References & Customer Reviews

One of the best ways to vet your prospective agent or agency is to hear from people who have worked with them in the past. Ask for references, and check into them. Look for additional reviews from people they have worked with in the past. How were their experiences? Overall, was it glowing, mediocre, or is there something concerning in there?

  • Hospitality

This is about more than just finding an agent who is courteous. You are going to be spending a lot of time with your real estate agent throughout the home buying or selling process. It is important to find someone who you are comfortable with and who you enjoy being around. Look for someone you like working with, whom you feel you could grow to trust. Trust will be an important part of this relationship.

 

 

In a quickly-changing, international market full of investors, where demand is based upon the interaction of international economies and shifting currency exchange rates, having a knowledgeable agent that you trust is a must. If you are looking to buy or sell a home in Miami, reach out so that we can pair you with the agent that best suits your needs.

0 What Is A Hotel Condo?

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hotel condo

What is a hotel condo?

A hotel condo is a building that is legally a condominium but also has a short-term rental program that operates like a hotel. This entity has a front desk, and the rental program comes with full hotel management service. These buildings are often luxurious high-rises operated by big names like Ritz-Carlton and Hilton. Hotel condos give people the ability to enjoy a vacation home that can be effortlessly turned into a short-term rental investment when they are not using it.

Benefits of Hotel Condos

Luxury Living

Hotel condos can represent the ultimate in luxury living. Often being in great locations with resort style amenities, they can offer the perfect vacation experience. Your hotel condo could be enhanced by amenities such as rooftop pools, gyms, spas, bars, 5-star restaurants, the possibilities are endless. Hotel condos are often operated by the big names like Four Seasons, Ritz-Carlton, Hilton, Rosewood, Clarion, etc. This means more fun for you when you make the trips down, and more money in your pocket if you decide to take advantage of the rental program.

Income Generation

Hotel condos can act as vacation homes which are setup to generate income in your absence. While these purchases aren’t always investment driven, having the ability to rent out your property short-term and hassle-free creates a huge advantage for hotel condo owners. You get to benefit from the reputation, marketing, and operational expertise of the hotel business that is handling the rental portion. All you have to do is pay the management fees. Take a look at the numbers before you buy and make sure your ratio of income to expenses looks acceptable to you. If you are looking to save some money you can always consider renting the unit out yourself if that is something that your contract allows. This would allow you to forgo the high monthly maintenance and hotel rental program fees that are associated with running a resort-style facility.

Flexibility

The flexibility in many hotel condo arrangements can make it an attractive option in a variety of situations. One of the most popular options is to use the property as a vacation home while still profiting from its short-term rental while you aren’t using it. Many hotel condos allow you to rent the unit out on your own if you wish, so you could forgo participating in the rental program and save yourself those fees. You would, of course, have to be more involved in the rentals in this scenario, but it is still often a possibility.

Make sure that you diligently research both your hotel management company and your individual arrangement to understand the rules regarding your ability to short-term rent independently. Find out exactly what you would be missing out on if you forgo the rental program. Try to project – would you make more rental income (even after the fees) by capitalizing on the brand name, sophisticated reservation technology, and operational expertise of the hotel management company? If so, is the extra money worth the added time investment from you which will be necessary to handle the rental portion yourself? You have to evaluate what is right for your situation. Another option is to just use your hotel condo as a vacation home and not rent it out at all. This property is not a timeshare, so you retain true ownership of real estate.

Low Time Investment

By far one of the biggest benefits of hotel condo ownership, if you should chose to participate in the associated rental program, is the worry-free role you are left in as the owner. The on-site management company and operator of the rental program take care of everything associated with the upkeep and rental of your property. As the owner, you never have to deal with tenants, maintenance, scheduling, payment or any of those things which can so easily become a headache for independent short term property renters. They also provide all of the services hotel guests are accustomed to, such as housekeeping, room service, concierge, etc. Hotel condos can truly offer hassle-free vacation home ownership. It’s an investment that you can personally benefit from while not having to invest a lot of time into it otherwise.

 

If you are thinking about purchasing a hotel condo, the best time to buy is in the early stages of pre-construction. This is when prices are at their lowest, and you still have the best selection of units. As demand increases, selection decreases and prices increase. Many hotel condos sell out before the construction is even complete. If you have questions about hotel condos, in terms of buying, selling, or just in general, reach out to one of our knowledgeable agents. You should make sure you really understand this unique real estate product before making a move.

0 Homestead Exemptions in Florida

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homestead exemptions

Homestead exemptions can be a big help to Florida homeowner’s come property tax time. They can reduce taxable home values by up to $50,000. Additionally, amendment 10 ensures that the taxable value of homes with homestead exemptions cannot increase more than 3% annually, which protects homeowners from rising property taxes due to increasing market values. Homeowner exemptions are overall a great thing for Florida homeowners, but because a home’s taxable value reset to the market value upon sale, they can also lead to some unexpected changes in tax bills for new owners if not properly understood.

Homestead Exemptions in Florida allow Florida homeowners to claim up to $50,000 in exemptions on their primary residence. The first $25,000 exemption applies to all primary residence and it reduces the home’s taxable value for all tax authorities.

The second exemption is up to $25,000 and it is automatically applied to any home with a homestead exemption that is assessed at more than $50,000. Unlike the first exemption, this exemption excludes School Board taxes  which can be up to 40% of the tax bill. This exemption equals the lower of $25,000, or the home’s assessed value minus $50,000.

Impact of Homestead Exemptions on Taxable Value:

Estimated Assessed Value 1st Homestead Exemption 2nd Homestead Exemption Taxable Value for All Tax Authorities Taxable Values for School Board
< $50,000 $25,000 $0 $25,000 $25,000
$50,001 – $74,999

Example: $60,000

 $25,000 $60,000

-$50,000

=$10,000

 $15,000 $25,000
> $75,000 $25,000 $25,000 $25,000 $50,000

If you are eligible for a homestead exemption you can apply online here. 

 

Amendment 10

Amendment 10 of the Florida Constitution, also known as Save Our Homes, is a benefit that applies to any home that has a homestead exemption. It protects Florida homeowners by limiting the amount that the assessed value of their homes can be raised for tax purposes each year to 3%, or the current consumer price index, whichever is less. If the market value of a home increases, so does the tax assessed value. This can be problematic for owners because when the market value skyrockets, so does, in theory, their personal property tax bill. It is therefore very beneficial in these situations to have a cap on assessed home values for tax purposes. The CPI is currently 2.1%, which means that under amendment 10, the taxable value of your home can only increase 2.1% annually, regardless of how much its market value increases. 

As time goes on, the combination of the homestead exemption and amendment 10 can lead to a big difference between the market value of a home and the tax assessed value. This protects the owners from rising property tax bills, resulting in tax savings. If you have been in a home for 10 years in a market with steady growth, and the assessed value was capped at growing 3% annually, your tax assessed value could currently be way below the market value.

The difference in tax assessed and market home value can also result in unexpected increases in property taxes when a buyer takes a possession of a new home. The buyers might see an artificially low tax bill if the property has not been reassessed. If the house had a homestead exemption, the previous owners were enjoying this as well as the benefit of the maximum 3% annual increase in the home’s assessed value. When that house sells, the assessed value resets to the market value and thus may jump. An increase in assessed value means an increase in taxes, so the new buyers may be now looking at a tax bill that is higher than the previous owner’s bill was.

Homestead exemptions are not transferable on a home, but a new homeowner can inherit the previous owner’s homestead exemption. This is really only beneficial for the remainder of the calendar year as the assessed value will only remain capped for that year. As of January 1st, the taxed assessed value of the home would return to the market value for the new homeowner.

 

Portability Transfer of Homestead Assessment Difference

Another great thing about Florida homestead exemptions is that the assessment difference is transferable to another homestead property. This protects homeowners from incurring huge jumps in property taxes when they move their primary residence. As of 2008, homeowners can transfer the savings they have accumulated to another homestead property up to $500,000.

The calculation of the transfer of homestead assessment difference depends on if the new home is an upsize or a downsize in terms of market value. If the new residence has a higher market value than the previous residence, the entire assessment difference is transferable to the new property. If the new residence has a lower market value than the previous residence, the transferable assessment difference will be a percentage of the original assessment difference.

Property exemption tax applications are due March 1st. You can apply online here, or file in person at the Downtown Miami Government Center or the South Dade Government Center. for portability transfer.

 

If you have questions about how homestead exemptions can affect your when buying or selling a home, contact one of our knowledgeable agents today.

0 6 Regrets of Listing Homes For Sale By Owner

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We live in a fast-paced, can-do world where seemingly all information can be found online and independent financial decision making is common. It seems logical to some people to list their homes for sale by owner. Why hire a realtor when even the most clueless of us can google “how to sell my home” and figure it out for ourselves?

The fact of the matter is, no matter how much you google, you can never fully prepare for this huge and complicated financial decision without some knowledge from inside the industry. There are many regrets of listing homes for sale by owner. This is why the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years. As businessman R.H. Grant once said, “When you hire people that are smarter than you are, you prove you are smarter than they are.”

Here are six regrets of listing homes for sale by owner that every homeowner should consider:

    1. Dealing with Difficult Negotiations:

      Let’s face it, for most of us, negotiating is not a pleasant activity. Sure, there are some of us that thrive on it, but for the majority of us, negotiating with someone who you want to eventually agree with can be a slightly uncomfortable process. Having a real estate agent to handle the negotiations can make both the buyer and sellers more comfortable as they provide a barrier for discussing delicate topics.  Real estate agents are also negotiation experts. Imagine yourself in a tough negotiation situation. How far should you be willing to bend to ensure a fair deal? How do you handle spontaneous or unusual requests? Your realtor would know the answers.

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    2. Missing Out On Insider Knowledge:

      You don’t know what you don’t know, right? Well, your would-be real estate agent does. Realtors know their local real estate markets inside and out. This means they have valuable information about the current market which is necessary for accurate pricing. It means tips and tricks for how to make minor home improvements that could nicely increase your sale price. It also means information about the future direction of the market, nationally, locally, and even on your block. What could you be losing by selling that home in an up and coming neighborhood 5 years too soon?

    3. Long Listing Times:

      Why? Missing out on potential buyers. Agents have huge networks of buyers, which translates to shorter listing times and more competitive offers. Missing out on this is one of the top regrets of listing homes for sale by owner. Property doesn’t sell due to advertising alone, which is why word of mouth is so important. Real estate agents have a huge network that very well could include your home buyer. Agents at RE/MAX Paradise have the added benefit of having all of RE/MAX as a resource. With over 100,000 agents providing a global reach of over 100 countries, nobody sells more real estate than RE/MAX. The international nature of the Miami market makes this global reach even more importance.

    4. Paperwork Headache:

      For most of us, dealing with large amounts of paperwork leads to large amounts of stress. What documents and contracts do you need to have in order to make sure your home sale is done by the book? One of the best personal benefits of hiring a real estate agent is avoiding that paperwork headache. Your realtor will take the lead and help you navigate the maze of paperwork that now accompanies a home purchase, making your life substantially easier.  Real estate agents are also up to date on all of the housing code and regulations, so you can stop worrying about forgetting the details.

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    5. No Support System:

      Selling your home can be an emotional time, and emotional decisions do not always stand up to rational analysis. You need someone there to help you make the tough calls. Even if selling your home is not an emotional situation for you, it’s still important to have someone in your corner who has a vested interest in your success and happiness. Remember, real estate agents rely on the relationships they build for continued business. That means that your future business is as important to them as your current business, so they are going to want to ensure that you are happy.

    6. Not Getting The Best Price:

      One of the biggest regrets of listing homes for sale by owner is not getting the best price. Many of the benefits of using a realtor that were previously mentioned bleed into this all important skill. Real estate agents are highly trained in housing appraisal, they know the market, they are skilled negotiators, they have the network to generate competitive offers, and they know the necessary improvements to boost the worth of your property. Some choose to list their homes FSBO to save on closing costs, but in the end, the costs will most likely outweigh the savings. A survey conducted by the NATIONAL ASSOCIATION OF REALTORS® of recent home buyers and sellers found that the typical home sold by the homeowner sells for $210,000 while the typical house sold by an agent sells for $249,000.

      7. Before you decide to take on the challenges of listing your home for sale by owner, sit down with an agent at RE/MAX Paradise to see what they have to offer. Don’t fall victim to the regrets of listing homes for sale by owner. Listing with an agent can save you time, frustration, confusion, and money. Get in contact with one of our certified and ethical agents today.

0 Caution in the Housing Market for Buyers/Sellers

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The Fannie Mae Home Purchase Sentiment Index decreased in September, according to Florida Realtors. This drop shows that there is some caution the housing market from both the sides of buyers and sellers. Consumer caution in the housing market showed in the drop of 4 of the 6 components of HPSI. The most significant decrease was in people who expect mortgage rates to go down over the next 12 months. This fell 6 percentage points. The net share of consumers who said it was a good time to buy a home also dropped, as did the net share of consumers reporting confidence about not losing their job over the next year.

“The decline in the HPSI over the past two months from the survey high in July of 86.5 adds a note of caution to our moderately positive housing outlook,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “Downside changes came in particular from the HPSI components mortgage rate direction and good time to buy a house.”

“In addition, the starter home tight supply and rising home prices, as well as the unsettled political environment, are likely giving many consumers a reason to pause or question their home purchase sentiment,” he added.

Maybe more positively, the net percentage of those who say it is a good time to sell a house remained at 15% in September, and the net share of Americans who say their household income is significantly higher than it was 12 months ago rose 2 percentage points to 12%.

While nationally there is caution in the housing market, it is still important to look closely at your local market. If you have questions about the market, or about buying and selling the Miami area, please reach out to a RE/MAX Paradise agent today.

0 Home Selling Myths You Should Stop Believing

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home selling mythsSelling a home, undoubtedly, has its challenges. In today’s market, there is actually a supply shortage, so you may think that means selling is easy. However, Century 21 and realtor.com compiled some home selling myths that you should know. Check them out, and stop believing them. This will help you be more successful in your home sale.

Home Selling Myths

  1. You can do the whole thing alone. Actually, the help of a realtor, like our amazing agents at RE/MAX Paradise, could make or break your deal. They will help with finding the right type of buyers, negotiating, and more. “It’s about establishing relationships, trust, and facilitating communication to keep the deal alive until it closes,” says Deborah Stewart, a sales associate for Jan Scholtz Realty in Louisville, KY, to realtor.com
  2. You know what your home is worth. Unless you are a real estate professional, you don’t know what your home is really worth. Let them help you with that.
  3. Your home is already in great shape to sell. Maybe to you, your home is perfect. However, some home improvements could really improve its value and your profits.
  4. Home upgrades should be big. “Simple things make a big difference. When I walk through, I advise sellers to remove most personal items,” she says. “When people come to look, if there’s a lot of memorabilia, they feel like they’re intruding, not shopping. Get pros to help clean it up.”
  5. Spring is the best season to sell a home. In actuality, any season can be the best, depending on the market. You need to know what is going on with your local housing market to know the best time to sell.
  6. Online home value estimates will give you all you need. Really, no online tool can replace the real life thing of the help of an agent.

If you are looking to sell your Miami home, RE/MAX Paradise is ready to help you. Don’t fall for these home selling myths, and get the help of an expert professional so you can make a great deal!

0 Interest Rate Hike Could Come

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interest rate hikeAccording to an article by Florida Realtors, Federal Reserve Chair Janet Yellen discussed the possibility of an interest rate hike on Friday. Due to solid job growth and a strong economy overall, the increase is possible. However, she gave no timetable for when the Fed may decide to increase interest rates. The Fed does have meetings coming up Sept 20-21, and more in October, November and December. The increase may, or may not, happen at any of these meetings. She also discussed how inflation is currently below the Fed’s 2 percent goal. However, that is due to only temporary causes.

“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation,” Yellen said, “I believe the case for an increase (in the Fed’s benchmark borrowing rate) has strengthened in recent months.”

“As ever,” she said, “the economic outlook is uncertain, and so monetary policy is not on a preset course.”

Since Yellen set no time table, many economists assume the interest rate hike won’t happen in September. The Fed will also look at August’s job report that comes out this Friday. With the election coming as well, there is a good chance aspects of the economy will fluctuate.

“We think most officials will want to see more concrete evidence of a rebound in GDP growth and a rise in inflation towards the 2 percent target, with a December move still appearing the most likely outcome,” said Andrew Hunter, an economist with Capital Economics.

Activists hope that rates will stay low as the economy strengthens.

A low interest rate means home buyers have more buying power. If you are looking to buy a home soon, you should do so soon before rates rise. RE/MAX Paradise has so many beautiful homes in Miami, you will not want to wait another moment before contacting one of our agents.

 

0 Low Home Inventory, High Home Sales

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low home inventoryAccording to realtor.com, the United States is seeing high home sales and low home inventory. Jonathan Smoke, the website’s chief economist, even wrote that 2016 is shaping up to be the best year for sales in a decade.

“Houses are flying off the market at the fastest rate since the housing bust in 2007, so we know that buyers must be working hard to find that perfect home and get it under contract. Harder than ever, perhaps. Insights from our daily surveys of visitors to realtor.com® tell us that their biggest challenge is the low home inventory, which is holding us back from seeing even more sales.” he wrote.

40% of home buyers on realtor.com reported that the biggest challenge they faced in June was finding a home that meets their needs. The real estate website also said that there were 13% more buyers this year, but 5% less homes. However, in this situation, it is still not exactly a sellers market. That is because an estimated 90% of sellers also want to buy.

The peak of sales is expected to extend past the summer this year. Demand is high and mortgage rates are low. However, only time will tell what the future will bring.

“The seasonal pull is as powerful as the tide—eventually we will run out of time as school starts, weather shifts, and a new president gets elected. These factors will likely make this fall slower than usual, especially relative to the very busy spring and summer. If you are thinking of buying this year, get out there now! The clock is ticking louder than ever,” Smoke wrote.

Despite low home inventory is still pretty low. However, it is a great time to buy. At RE/MAX Paradise, we are excited to help you find your dream home in Miami. Check out our amazing properties today!

0 Critical Real Estate Trends in the U.S.

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critical real estate trendsWhether you are a home owner, buyer, or renter, knowing current critical real estate trends is important. Fortunately, the Counselors of Real Estate get together to compile issues that could affect the industry. These are world and national events and their implications for real estate.

Shifts in world economy

After economic and political shakiness around the world, the International Monetary Fund amended that GDP growth to go downward in 2016 and 2017.

The economy could be decelerating. However, the United States is still popular with foreign buyers.

“A surge in Chinese buying of both residential and commercial real estate last year took their five-year investment total to more than $110bn, according to a study from the Asia Society and Rosen Consulting Group,” The CRE wrote.

Lending issues

The CRE predicts more restrictions are commercial real estate because lenders are reaching allocations. This could be an opportunity for “other, less regulated lenders to enter the market”, like crowdfunding to enter to market.

Demographics

Millenials are taking over as thousands of baby boomers retire each day. The CRE predicts multi-family developments to increase. Also, assisted living may increase for the baby boomer population.

“Look for a rise in renting over home ownership,” they also wrote.

The sharing economy

“Airbnb and Uber, companies that operate outside traditional regulations and offer alternatives for employment are two examples that show how the sharing economy is becoming more firmly established,” realtor.com wrote about the CRE’s report. The CRE predicts shared and virtual spaces to impact commercial real estate.

For more critical trends and more information about these, visit The CRE 2016-2017 Top Ten Issues Affecting Real Estate.

Here at RE/MAX Paradise in Miami, our agents are informed on critical real estate trends. Many of these issues will have impacts over time. With any questions about the current market, please contact one of our agents today!

 

 

 

0 Tips to Avoid Real Estate Scams

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real estate scamsMost real estate transactions are very significant financially. They take time, thought and effort to commit to. Due to the fact they are so important, there is some risk. All of this means that it is important to be cautious and to avoid real estate scams. Recently, according to Florida Realtors, Utah’s Department of Commerce released a statement on behalf of the Utah Division of Real Estate alerting and cautioning realtors and buyers of hackers. Last fall, the National Association of Realtors warned members of an e-mail scam that comes near the close of a deal.

“All parties in a real estate transaction should be wary of email communication especially if last minute changes are requested,” says Jonathan Stewart, head of Utah’s real estate division, in a statement. “If criminals have access to your e-mail account, they can make anything sound legitimate.”

There are things real estate professionals can do to help buyers and themselves avoid these scams. The state’s Department of Commerce provided several tips for real estate agents:

  • Inform clients from day one about your e-mail and communication practices, and alert them to the possibility of fraudulent activity.
  • Before wiring any funds, the wirer should contact the intended recipient via a verified telephone number and confirm that the wiring information is accurate.
  • Use encrypted e-mail if a situation arises in which the client has no choice but to send information about a transaction via e-mail.
  • Clean out your e-mail account on a regular basis. Over time, multiple e-mails can establish business practice patterns that hackers can use against you.
  • Encourage clients to change usernames and passwords regularly.
  • Use the most up-to-date firewall and anti-virus technologies in your realty business.

Fortunately these tips exist and being conscientious and careful always helps. Real estate scams can be avoided with the correct awareness. If you feel that you may have received a scam e-mail, do not risk anything and pick up the phone. At RE/MAX Paradise, our agents priority is our clients, and we are happy to discuss other precautions to take against real estate scams.