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August
2

Florida Architecture

If you're planning on buying a Florida home or upgrading to a different Florida property, you'll find that there are a lot of architectural styles to choose from. Our real estate agents understand that having so many options can feel overwhelming, especially if you aren't sure exactly what you're searching for in a home.

We recommend learning about the different architectural options so that you feel more comfortable when you're shopping for a home. Here are some of the most popular Florida home styles. 

Click Here to Read More...

July
18

Closing Process

You're ready to start the process of searching for your next home, but you're a little apprehensive about all the steps associated with the process. One stage that our real estate agents suggest you learn about is the closing process.

The closing process is the last major stage of buying a home before you're officially a homeowner. Here's what you should know.

Click Here to Read More...

February
10

Various economic events and factors have caused inventory levels and home values to rise and fall through the years.  But when "large imbalances" occur, it is usually a year or two until the full impact of the market imbalance is felt.

For example, when our local housing inventory was very low in the early 2000s, prices/values started rising soon after.  When inventory bottomed out in 2004, we had our sharpest rise in prices/values in 2005.

When inventory levels TRIPLED between 2006/2008 (banking crisis, bad loans going to unqualified buyers, investors trying to dump housing), the following years saw huge declines in prices/values, bottoming out in 2010.  As inventory levels started going down again (driven by investors buying again!), prices stabilized and started growing slowly and steadily again.

Once again between 2019-2021, inventory levels hit another all-time low, driving prices/values up 35%!  This time, the run-up of prices/values was due to historically low interest rates, high demand from investors, and more migration to Florida due to Covid restrictions and lock-downs in other states.  Now, at the start of 2022, our inventory is at it's lowest level EVER, with expected gains in prices/values in the 25% range for 2022.

Interest rates have risen so far this year, and are expected to rise further.  The hope is that higher rates will lower buyer demand, and allow the real estate market to move closer to a more balanced market later this year.  


Article written by Frank Plesko, Watson Realty, compiled from Orlando Regional Realtor Association's Monthly Sales & Inventory Reports, and Frank's market observations.

Month/Year  Median Price % Increase/Decrease Available Inventory
Nov 2001 125,846 -- --
Nov 2002 138,663 11% increase  7,880
Nov 2003 153,567 11% increase 6,712
Nov 2004 182,300 19% increase 3,681
Nov 2005 249,900 37% increase 9,685 
Nov 2006 250,000 0% - FLAT 21,324
Nov 2007 234,900 04% DECREASE 26,172
Nov 2008 166,000 29% DECREASE 24,408
Nov 2009 123,000 26% DECREASE 16,002
Nov 2010 105,000 15% DECREASE 15,192
Nov 2011 115,000 10% increase 10,126
Nov 2012 129,000 12% increase 7,847
Nov 2013 155,000 20% increase 9,609
Nov 2014 165,000 7% increase 12,121
Nov 2015 182,000 10% increase 11,300
Nov 2016 200,000 10% increase 9,270
Nov 2017 224,000 12% increase 8,294
Nov 2018 233,100 04% increase 8,432
Nov 2019 240,000 03% increase 7,562
Nov 2020 275,000 15% increase 5,583
Nov 2021 330,000 20% increase 3,046
October
28

You may have noticed that your annual renewal for your home hazard insurance policy has either been creeping higher, or has drastically risen over the past couple years.  Here is a brief history on why insurance costs have gone up in Florida, and what is being done about it.

What has caused insurance rates to skyrocket in Florida?

  • The initial reason was steadily rising rates due to Hurricanes, especially Hurricane Irma in 2017. The original statute of limitations for filing Hurricane claims was 3 years, so many claims concluded in 2020, with many still in litigation.

  • The rising cost of "re-insurance", which insurers pay to ensure they can cover all claims after a catastrophic storm event.

  • A combination of well-meaning court rulings and changes in state laws over the years has created a "litigation economy" that gives financial incentives to attorneys to file lawsuits against insurers: 
  • A 2016 Florida Supreme Court ruling said: "If 25% or more of a roof is damaged by a problem covered by the policy, the entire roof must be replaced and insurer must pay for it". This created the 'door-knocking' public adjusters that do free inspections, to find loose shingles, wind damage, hail damage and old hurricane damage.  Then they get a homeowner to sign an AOB (assignment of benefits), essentially hiring the agent to act on their behalf including hiring an attorney to sue the insurer if they don't comply.  Florida is one of the most litigious states in the country.

  • Another State Law called "one-way attorney fees". It says, "if the contractor can win 'one penny more' than the insurer's initial offer, the insurance company must pay the legal fees for both sides.  In one case a homeowner received $35,000 while the attorneys netted $750,000.

What was the result of all this?

  • Of 15 billion that went to litigated claims since 2015, only 8% was paid out to policy owners. Plaintiff's attorneys received 71%, and insurer's defense attorneys accounted for 21%.  That's 92% paid to attorneys, and 8% paid on policy owner's claims – for roof repairs or replacements.

  • Of the average premium paid to insurers, about 30-35% of that goes toward their expected legal fees in fighting fraudulent claims. This is essentially a "hidden tax" that covers the costs of additional litigation that occurs in Florida compared to other states.

  • Homeowner's have seen their insurance rise as much as 40% as insurers pass on the costs of settling an ever-increasing number of lawsuits.

  • Insurers have become unwilling to insure roofing structures over 15 years old, and some won't even cover those that are over 10 years old! As a Realtor, we now have a very difficult (to impossible) time in assisting our buyers to find insurance on homes with roofs that are over 15 yrs of age.

What is the State of Florida doing about the problem?

  • The Florida State Senate passed "Senate Bill 76" in April 2021, which addresses several issues surrounding the rising costs of property insurance in Florida. On June 11 2021, Governor DeSantis signed the bill into law.  The bill provides that:

  • Restricts the ability of roofers to solicit claims by door-to-door solicitations, and slaps legal and financial penalties on attorneys who work with these contractors, frequently filing on their behalf. 
  • Creates a uniform claim filing period (2 years after storm event, not 3). 
  • A policy holder/claimant must notify the insurance company before filing a lawsuit, to give the insurance company sufficient time to inspect the property before a lawsuit is filed. 
  • Changes how attorney fees are awarded in property insurance litigation: Attorney's fees will be directly related to how successful the insured was in recovering the amount demanded in their litigation.  If the claimant receives a least 80% of the claim, the insurance company must pay all reasonable attorney's fees.  If the claimant recovers at least 20%, but less than 80%, the insurer will be required to pay the same percentage of fees related to the recovery that was recovered in the action.  Adopts federal court standard for awarding attorney fee "multipliers" in claims arising under the property insurance policies and directs courts to presume the "Lodestar Fee" is reasonable, and provides that multipliers will only be awarded in rare circumstances.  Multipliers WERE previously allowed when homeowners had a hard time finding an attorney who would work their claim. 
  • Ensures there is a clear understanding between homeowners and insurance companies regarding when a roof replacement will be covered in full, or not. Limits will be based upon the age and type of roof.  
  • Insurers to only offers policies that adjust roof claims to "actual cash value" if the roof is older than 10-years old. This means replacement cost – depreciation = cash value.  
  • Allows insurers to offer options of purchasing a "stated value limit" for roof coverage.


So where are we now?  What can I do to help?

There are additional bills in the Florida Senate & House of Representatives that seek to modify or improve on Senate Bill 76.  Governor DeSantis is firmly FOR reducing and eliminating insurance fraud and unnecessary legal fees in order to help bring down Florida homeowner's insurance rates.

You can learn more about "Tort Reform", and even take action here: https://fltortreform.com/. The insurance industry backs this as a way to rein in the ever rising costs of insurance in our state.

 

Article written by,

Frank Plesko, REALTOR
Broker-Associate
Watson Realty Corp.

 

 

September
23

You've probably heard the commercials on radio or TV talking about home title theft.  A person obtains a blank quit-claim deed on your home, then forges your name onto the deed.  They then file it in the county where your home is located.  After that they can borrow against your home's equity, sell the home, etc.  Then it's weeks until you figure out you lost your home.

This type of pitch is out there in radio and TV, selling home title lock protections.  Prices vary, but $80 per year for a million dollars in protection is the common pitch. 

What are the odds this would ever happen?  What are the odds this insurance policy would ever pay out?

After checking several resources on this matter, there's one thing I can say for sure.  It is HARD and RARE that this event happens.  It is TRUE that anyone can forge your name onto any document, including a deed to try and convey title to the forger.  This forged deed can be filed in public records.  Before doing this, the forger must overcome their first hurdle, and that is having this deed "notarized".  Notaries validate signatures by viewing legal ID cards, namely driver licenses, social security cards, or other legal means of ID. 

But what if a forger was in cahoots with a notary, and they teamed up to work this fraud?

The next hurdle for them to overcome is borrowing against your home's equity.  Equity loans require credit applications, income documents, employment verifications, social security numbers, etc.  This is not a simple process at all. 

What if the forger and their notary accomplice try to sell my home? 

Any knowledgeable buyer will require "title insurance" to accept any deed to real property.  Title insurance protects buyers against defects in the title including liens, fraud and forgery.  It is possible that a buyer would close on a purchase without such insurance, but THEY would be the ones to lose money, not you

Forgery is a felony in all fifty states, punishable by jail time and heavy fines.  A court may also award damages to the aggrieved parties, namely YOU. 

If a forger went to this extent would I have to hire an attorney? 

The answer IS yes.  But the sooner the fraud is caught, the sooner an attorney can jump on it and help rectify the situation. 

Can home title lock insurance cover my legal expenses? 

According to Larry Light, senior contributor at Forbes.com; no, none of these services do that.  They simply notify you if anyone seems to be tampering with your home's title, then you must hire an attorney to fight the illegal action.  So these services are essentially well-paid notification companies. 

How can I find out if someone is tampering with my home's title or otherwise trying to commit a fraud using my name?  Are there any free services I can use?

YES, THERE ARE FREE SERVICES YOU CAN USE!  In Orange County Florida, you can register your names here:  https://www.occompt.com/official-records/property-fraud-faq/.  A forger would have to use your names to try and commit a fraud and when they do, you get a notification. 

My family installed a fence on our property in January of 2020, and I received an e-mail alert when the fence installer filed a mechanic's lien on my home.  They do that to make sure they get paid.  My son-in-law also got an e-mail notice when someone with a similar name as his was involved in a court case.  In both situations, the Orange County notification system worked for us.

There are probably similar resources available to you in the county where you live.  Contact your local property appraiser's office or county records office to inquire on the free system available to you. 

 

Written by,

Frank Plesko, Broker-Associate & REALTOR
Watson Realty Corp.

 

August
19

(article published 8/19/21:  updated 4/14/22)

You've received the postcards in the mail, viewed the TV commercials, and have seen the billboards stating, "We'll buy your home for cash", or "Contact us today for a cash offer on your home".  These investor-groups range from very large corporations, to smaller area investors.  But they all have one thing in common.  They will give you an offer on your home for less than it is worth, then turn around and sell it, making a tidy profit.  

How do i-Buyers come up with their offers?

Many of these buyers use AVM (automated valuation models) to base their cash offers on your home.  These AVMs can vary wildly, and Realtors generally deem them as an unreliable way to price your home.  These companies will give you data to try and convince you that their offer on your home is fair, and that you should take it. 

By contrast, an experienced Realtor will give you a CMA (comparable market analysis) on your home, comparing it to other homes similar to yours, that have sold recently in your area.  The best Realtors will even make "adjustments" to the comparable sales, giving your home credit for superior features, remodeling, etc., and taking value away if you are lacking such improvements vs. the comparable sales.  Our goal is to show you what your home will appraise for, so you know what the maximum value is.


Do i-Buyers have fees comparable with Realtors?

YES THEY DO!  i-Buyer program fees range from 5 - 15%, but 6% is average for the well-known, larger i-Buyer companies.  This is comparable with the fees that Realtors earn to sell your home on the open market.  Sellers also have normal closing costs with both i-Buyers and selling with Realtors.


Why would I use an i-Buyer instead of a Realtor to sell my home?

If you need to sell your home in a hurry (meaning you can't wait 4-6 weeks), this may be an option for you.  But you won't be selling your home for the highest price possible because you're not opening it up to the masses.  Some i-Buyers will even let you close the sale when you want, but in an appreciating market, this is to the advantage of the i-buyer, not the home seller.  If you make contract with one of a few i-buyers in April for 350,000, but you don't close until October, that i-buyer just made about $35,000 in additional profit FROM YOU, by waiting to close!  They don't hand you your additional appreciation, you handed it to them for FREE!  Some will even give you a "moving perk" of some sort, but check the fine print!

These companies will also use the "no showings" pitch, which for some, can be a good thing.  But I'll tell you, if your home does not show well, needs repairs or is unappealing, you may be in store for a surprise.  i-Buyers have a "due diligence" inspection period, and they may choose to re-negotiate price with you after fully assessing your home.  More about that shortly.


Will I get the highest price possible by selling to an i-Buyer?

That is very unlikely.  I just did research of homes sales in Ocoee & Winter Garden Florida, covering the timeframe of 6/10/20 - 6/10/21.  I researched one of the largest i-Buyer companies (whose name I won't disclose in this article).  They bought & sold (22) homes in the area I researched, and these are my findings:

  • Between purchase prices and resale prices; the lowest profit they made was a $12,000 loss, and the highest profit they made was $52,300.

  • Out of (22) sales their average purchase price was 291,886, and their average resale price was 307,741 for an average profit of $15,855.


Will I have to do repairs if I sell to an i-Buyer?

i-Buyers will have a "due diligence" period that can range from 7 days - 15 days commonly.  During this timeframe they cancel the contract for any reason.  This is very similar to using a Realtor, as buyers all want the right to have your home inspected to see if any repairs are needed, if you have outdated components in your home such as wiring, plumbing, roofing or other components.  After they have checked out your home they "may" come back at you to re-negotiate price, or cancel the contract altogether.  Keep in mind that they are buying low and selling high, and if they have to replace too many components (reducing their expected profit), this will make your home less appealing.  Remember they haven't viewed your home, and they do not know it's condition.  

By contrast, buyers who have viewed your home with Realtors have seen the home.  Their experienced Realtors can look at some components and advise them accordingly on what the home needs, etc.  You will also fill out a simple seller's property disclosure where you can note the age of certain components, if any components are failing or don't work, etc.  So many buyers who work with Realtors have more realistic expectations on what your home may need (before) making their offers to you


Is there an appraisal with an i-Buyer?

Although they have the right to an appraisal, their contracts are not contingent upon the home appraising at purchase price. This is because they are confident they can sell the home for a profit, soon after they close the sale with you.  By contrast, buyers who are obtaining financing with small down payments will need your home to appraise at the purchase price.  Buyers with very large down payments exceeding 25 - 30% will not need your home to appraise at purchase price.

Due to the very competitive market in some parts of the country (especially in metro-Orlando) some buyers are waiving their appraisal contingencies, or are agreeing to pay X-amount over appraisal value, up to X-purchase price.  Also, OTHER CASH BUYERS are prevalent in the market, so no appraisals are needed with these buyers.


How much more can I receive if I sell with a Realtor and not an i-Buyer?

The average is just over $15,000, but this does not include the additional profit you might see if you sell on the "open market". When a seller lists their home with a Realtor, it is listed in an area multiple listing service (MLS).  When you maximize showings, you maximize opportunities for multiple offers, and in our 2021 market, offers above list prices.  How much higher?  Currently in April 2022 we've been selling, on average, $15,000 - $30,000 over list prices.  So I'd say by using an i-Buyer you would be consciously giving up around $25,000 in additional profits. 

Keep in mind that once these i-Buyers have closed on their sale with you, they immediately list your home for sale in your local MLS, and do what you could be doing; obtaining as many showings as possible, garnering multiple offers, and selling for maximum prices.  


Isn't the showing process more of a pain using a Realtor, and not an i-Buyer?

Maybe, or maybe not.  If your home is reasonably appealing, and you don't mind about 2-3 days of traffic, then using a Realtor should definitely be considered.  Between 2021 and April 2022, we are taking our professional photography on Thursdays, listing our homes Friday mornings, generating showings between Friday and Saturday - and choosing the very best offer on Saturday evening.

100% of all our listings are selling that way this year.  We ask sellers to leave the house (if possible) for just those two days of showings, just so agents can stream their buyers in and out, with everything staying neat and tidy for showings.  Alternatively sellers can remain home, but must be prepared to leave during showings. 

If our sellers leave for a couple days - we turn on lights and stage their homes in the mornings, then close them up at night.  Our lowest price over list this year has been $5,000, and our highest was $30,000.  If you have a truly exceptional home, and unless you are in one hell of a rush, there is no reason to use an i-Buyer.


What about negotiating my closing date, or staying in the home after closing so I can buy another home (with my cash now in hand and no home-to-sell contingency)?

Closing dates, along with other elements of a contract, are always negotiable.  We have been negotiating "lease-backs" for our sellers, allowing them to remain in the homes they have sold for up to 90 days after closing.  This gives them an opportunity to compete with other buyers who have no homes to sell, and who have no home sale contingencies in their offers.  If you must sell your home before you buy your next home, we would be happy to discuss the best options for your particular situation and goals.  We also utilize a company called, "Easy Knock".  For a fee, they allow you to rent back your house for up to 12-months while you are searching for the perfect home.  This is a TERRIFIC OPTION to many i-buyers, as they acquire your home upfront, you pay your normal seller closing fees plus a fee to "Easy Knock", then rent it back.  When you are ready to move, YOU manage the sale when "Easy Knock" sells it on the open market, and YOU POCKET ANY ADDITIONAL APPRECIATION PROFITS!  There is also a company out there called "Ribbon".  Once approved by them, they turn you into a CASH BUYER, allowing you to compete effectively in this difficult "seller's market".  These companies have different approaches in helping those sellers who are also buying again. 


I want to build a new home, and the only way they will work with us if we agree to use their preferred i-Buyer who will guarantee our sale and closing date

Our company, Watson Realty also is affiliated with a type of guaranteed sale program in the event you are being forced to use an i-Buyer as a condition of building a home with a local builder.  Ask us for more information about that if this applies to your situation.  The "Easy Knock" and "Ribbon" companies can satisfy requirements from builders, when you have a home to sell!


SUMMARY:

i-Buyers are what we in the real estate industry commonly call "market disrupters".  They are the main cause of what is driving our prices upward, but because they are competing with YOU, the local buyer who wants to sell then buy again, they are making it very difficult to move around.  The last time that there was surch a surge of investors was during the last housing boom that ran from around 2004 - 2008.  The financial market almost collapsed in 2009, with real estate values plunging.  You won't see i-Buyers in that sort of market, so when prices stablize and (eventually) go back down (they always do), i-Buyers will be a thing of the past. 

If you don't mind losing around $25,000 of profit and need a very fast sale, I guess they provide an option for you.  Otherwise choosing your experienced neighborhood Realtor is STILL the best way to go!

Article written by,

Frank Plesko, Broker-Associate & REALTOR
Watson Realty Corp.

July
28

Have you ever wondered what style of house represents your personality? There are so many home types to choose from, you should know which one fits you best! Take a look at these five popular home styles to get an idea for the aesthetic and functionality that match your unique personality when you're ready to purchase your next home.

Click Here to Read More...

June
16

It's summer and you know what that means – it's listing season! Even though the market is primed for selling and many homes are selling for way over their asking price, it's still important to approach selling with a sound strategy. To that end, here are some key takeaways you should keep in mind to stay on top of your game in the lucrative 2021 market.

Understand Market Data

Though it can be exciting to sell when the market is scorching and you have the potential to make thousands over your asking price, remember that the market changes quickly, and there are a number of factors that go into pricing your home. According to Inman, if a home prices higher than comps in its area, it's likely that home has factors that can't be replicated – such as location, a pool, or a desirable lot. Your Watson agent knows to do their research thoroughly in order to best understand how to price your home.

Know Your Target Buyers

Low supply and buyer demand are skyrocketing the prices of homes, but that means that certain buyers are going to be priced out. Therefore, it's best to understand what your target audience is and what they're willing (and can afford) to pay. A great REALTOR® will understand where the leads are coming from, whether local or out-of-town, and what their financial backing looks like. Many buyers are offering all cash, but that may not always be your best bet since it can include contingencies, deductions, low-balling, and timelines that leave you frustrated.

Don't Alienate Your Buyer

You may think that since the market is in your favor, you get to call all the shots. But that attitude can backfire. Buyers still want a good deal and want to be treated with fairness. They also will be unwilling to move forward if the home doesn't meet their expectations. So, to avoid this pitfall, be sure to first get a thorough inspection and repair big items before listing your home. Things like roofs, leaks, or any basic items that are non-functioning need to be in great condition before listing, or you risk losing most buyers.

Proceed with Caution in Multiple-Offer Situations

Though receiving multiple offers on your home is a leveraging dream, it's not a particularly easy-to-navigate situation. Your instinct may tell you to go with the highest bid, but that's not always the right answer. An experienced REALTOR® will know to dig into the contract terms, financing, the offer letter itself, and other variables in order to make the best decision. It's best to operate with knowledge and realistic expectations and not let emotions sweep you away.

Now that you have the most vital information for selling your home in 2021, let's begin the listing process with the help of our expert Watson agents – contact us today!

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