Central Florida & metro Orlando real estate services

The Florida legislature approved a property tax deal yesterday on the final day of the special session.  The changes will now be put on the ballot in January for voters to decide on.

I have not read through the proposal in detail, but it does appear to have some positive changes in it.  The highlights of the proposal are:

1. A doubled homestead exemption from $25,000 to $50,000.
2. Making the Save Our Homes tax savings portable if you sell your home and buy another.
3. A 10% cap on annual tax increases for non-homestead and commercial properties.
4. A $25,000 exemption on personal property taxes for businesses and landlords.

I am glad to see that they did address a tax cap on non-homestead properties.  Having property taxes double or triple from one year to the next is very "uncool" .  I have mixed feelings about making Save Our Homes portable - it may not hold up in court.

Supposedly the average homeowner in Orange County will save around $226 per year.  Obviously this doesn't excite me.  The previous cuts back in July of this year were supposed to save us an average of $174.  Instead my combined net tax bill for my properties increased by $3000 from 2006.  So no savings for me this year.

I do see the way Governor Charlie Crist has immediately gone on a tour of the state, starting today to rally support for the tax bill.  He did the same thing back in July.  It appears more like he is simply pandering to voters.  He has really turned me off by this blatant display.

The big negatives of course are that millage rates and assessed values have not been cut at all except for the additional $15,000 in homestead exemption.  At least this tax package is a good start, but it is far from any real relief.  Taxes on most of my non-homestead investments have still tripled in the last few years and are not going down.

Here are some related links: Orlando Sentinel Article on tax cuts and Governor Crist's statements .

On an interesting but not directly related note, half the high schools in Florida have been deemed "dropout factories" by the federal government. This means that under 60% of all freshmen end up graduating. Associated Press article in the Orlando Sentinel.  Pretty interesting considering that property tax revenues and impact fees have skyrocketed in the last 5 years while enrollment is on the decline in many counties.  I guess throwing astronomical amounts of money at the schools still does not make them any better.  Another great example of our tax dollars being spent oh so well.

Copyright © 2007. Sand Dollar Realty Group, Inc. All rights reserved.

Rob Arnold, ABR, CPL, GRI, Full service and investor friendly Realtor, Managing real estate broker, Licensed mortgage broker, Notary Public

407-389-7318 http://www.sdrhouses.com/ http://www.webuyhousesflorida.com/

Flat fee MLS, discount MLS, MLS-only listing, whatever you want to call it, it is the process for consumers to list their property into the local MLS and the related internet sites like Realtor.com for a few hundred dollars with the consumer doing the bulk of the work.  This sort of listing also offers the buyer's agent a commission of 2-3% or more if they procure a buyer for the property. I wrote a detailed explanation about this in a previous blog entitled A word about flat fee MLS listings .

This blog is a follow up article.  I want to describe things to look for in a flat fee MLS broker.  If you do a Google internet search, you will find out there are many many of these type of services available out there.  Some will charge you nearly $1000 and some charge as low as $100.  I have even seen some that will advertise for free in the hopes of getting the seller to eventually become a future buyer.  If you pay a high amount, you deserve to get many additional perks and lots of customer service.  If you pay next to nothing for this service, expect to get next to nothing in perks or customer service.

Obviously price is a big factor to be shopping for.  Beyond price there are basically 3 main things that you should be looking for in a flat fee MLS broker.

(1) Does this firm have a local office where I can meet someone?  Or, in the alternative can they send someone out to meet with me?  Most of these sort of firms only do business with you via a 1-800 phone number or the internet.  You should at least have the ability to get someone to sit down with you in person for an hour or so either at their office or at your house.  They should also be able to provide you with a basic idea on pricing your property and on a marketing plan to get your property sold.  If they are totally hands off and will not give you any advice on proper pricing and marketing, it would be a good idea to steer clear of them.  Your goal is to sell your house, not to let it sit in the MLS indefinitely.

(2) Does this firm allow me to upgrade my listing to a full service listing?  Will they help me with paperwork, negotiations, or the closing, if later on I do not feel comfortable with the situation? If the answer is no or that they will refer that work out to some other company, then you are probably getting short-changed.  If the firm does not allow you to upgrade your services, the reason may be that they either do not want to bother with giving you these services or that they are not competent enough to even provide them.  Watch out.

(3) What sort of perks do they provide for the money you are paying?  (a) A real basic thing is a For Sale sign.  Other Realtors often steer away from MLS listings that have a For Sale By Owner sign in the yard.  (b) Initial pricing & marketing advice. I already discussed this above. (c) Phone calls and emails from Realtors and customers regarding your listing. Listings get lots of these contacts. The MLS typically says for any Realtor to call the owner for all negotiations, but often they still call the listing broker.  Is the firm servicing these phone calls and emails or are they ignoring/deleting them?  Guess what happens when you hire someone to service your listing for $75 ???  Odds are, they are not going to service it.  You definitely need some sort of balance here.

Shop around for your Realtor like you would for anything else.  No Realtor whether it be full service or flat fee MLS can guarantee to sell your property at a reasonable price. So make sure they are giving you choices on what they can do.  If the firm you are talking with tells you "6% is it, take it or leave it." Or even better "My commission is non-negotiable."  Well guess what, there are hundreds of firms in most cities that you can call.  And they all are aggressively competing for your business.  What you charge for services matters. In fact it is typically the #1 consideration to most consumers.  Not everyone needs to be baby-handled by a full-service Realtor. Just like not everyone needs to go to the emergency room for every medical problem they have - some people can buy over the counter medicines, so people can go to a walk in clinic, and some people have a family doctor.

One quick story, I was in a GRI real estate class in Orlando a few years ago with about 100 other Realtors.  We all got to go around the room and say our name and firm.  One Realtor said she was with Assist-2-Sell (a franchised full service discounter).  About half the class "booed" this person.  The instructor actually had to tell the class to be quiet because there are federal anti-trust laws that protect these alternative models.  A sad day. I do fully believe this current real estate recession is going to usher in a new age of flat fee MLS and alternative real estate models.  You would not believe how many Realtors (and mortgage brokers and title companies) I talk to that are doing all sorts of creative things to bring in a few dollars right now.  The market is changing and the 6 per-centers are a dying breed.

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(Copyright © 2007. Sand Dollar Realty Group, Inc. All rights reserved.)

Rob Arnold, ABR, CPL, GRI, Managing real estate broker, Licensed mortgage broker, Notary Public

407-389-7318 www.SDRhouses.com/

Your full service and investor friendly Realtor in Orlando. Learn to invest in Central Florida real estate and Orlando real estate. Investor mentoring and counseling available. I also provide flat fee MLS listings, For Sale By Owner, and menu-based services in most parts of Central and South Florida.

We buy houses cash, sell properties, and list properties in Central Florida including Orlando, Winter Park, Maitland, College Park, Ocoee, Winter Garden, Apopka, Pine Hills, Altamonte Springs, Casselberry, Longwood, Winter Springs, Oviedo, Lake Mary, Sanford, Deltona, Debary, Deland, Mount Dora, Eustis, Clermont, Kissimmee, Saint Cloud, Davenport, Winter Haven, and more. www.WeBuyHousesFlorida.com/ 

With the market as slow as it is, people often ask me what areas and properties in Central Florida are still selling.  The properties that are struggling the most are (1) the areas where sellers are competing directly with builders, (2) the low income areas where buyers need all the help they can get, and (3) anything that is not a single-family house.  I will address these 3 items one-by-one.

(1) It is hard for existing home-sellers to compete directly with a builder. The builder has many properties for sale. Some of the national builders have thousands of properties throughout the country.  The builder can sacrifice some of their properties by slashing the price by tens of thousands of dollars or offering fantastic options and incentives.  The average homeowner cannot do that (especially if they just bought their house pre-construction last year).

(2) The low income areas struggle even during the good times, but even more so during the tough times.  Buyers who want to live there normally don't have good credit, steady income, or down payment money.  Sellers have to often be very creative to get the deal done.  It definitely pays to have a good Realtor and a good mortgage broker on your side.  Often the sale will involve special financing programs, down payment assistance, paying off old debts, and seller held 2nd mortgages to name a few things.  Areas like Pine Hills, Orlo Vista, Washington Shores, Parramore, Holden Heights, and westside of Sanford always struggle.  The people that have the ability to buy a house just don't want to live there.

(3) Regarding condos and townhouses.  I hate to sound pessimistic.  But most big complexes have 10, 20, or more identical units for sale.  So if you are not in the bottom priced 2 or 3 units for your complex or your zip code, you are not going to even get a showing more than likely. Why would anyone look at yours when there are 10 others for sale at a cheaper price?  If you are competing against the builder, you might be better off just renting it out for a while.

The areas in Central Florida that I see struggling the most are the following:

• Brevard County: Port St John, Palm Bay, any condos on the beach.
• Lake County: Clermont and Groveland (the newer areas).
• Orange County: Hunters Creek, Southchase, Meadow Woods, Avalon Park, Lake Nona, and the newer neighborhoods around Apopka, Winter Garden, and Ocoee.
• Osceola County: BVL, Poinciana, Celebration, and most of the newer areas around Kissimmee.
• Polk County: Davenport, Poinciana, 4 Corners.
• Seminole County: The newer neighborhoods around Sanford and Oviedo.
• Volusia County: Deltona, New Smyrna, any condos on the beach.

The areas in Central Florida that I still see some decent activity (at least a fair amount of closings) are in the established areas with good schools and low crime.  Basically places like Winter Park, Maitland, College Park, Delaney Park, Altamonte Springs, Wekiva, Winter Springs, Lake Mary, Deland, Mount Dora, and Lakeland to name a few places.  Things are still slow everywhere though.

I am not saying to give up if you are in the struggling areas.  What I will say though is that if you are not aggressively marketing your property and are not aggressively pricing your property (meaning you are pricing it 5-10% below the last sale), then you need to get realistic with yourself and face the cold hard facts of this market.  Odds are very high that it is not going to sell unless you do.

Copyright © 2007. Sand Dollar Realty Group, Inc. All rights reserved.

Rob Arnold, ABR, CPL, GRI, Full service and investor friendly Realtor, Managing real estate broker, Licensed mortgage broker, Notary Public

407-389-7318 http://www.sdrhouses.com/ http://www.webuyhousesflorida.com/

Here are the latest properties for sale this week.  Some are full service listings and some are flat fee MLS listings. The 3rd property on the list is going up for auction this weekend. Please call us for a private showing or to make an offer.  Links to MLS#s below may take a day or 2 to become active.

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1. No Longer Available.

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2. No Longer Available.

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3. 6335 Linnet Court, Kissimmee, FL 34759.  3 bed/2 bath/2-car garage block house in Poinciana. AUCTION THIS WEEKEND 10/28.  Open house this Saturday & Sunday from 1pm-5pm.  Sold to the highest & best offer on 10/28.  MLS# o4807944.  -- PROPERTY SOLD AT AUCTION

Anybody that knows me, knows that I love to go out and have fun.  Living in Florida, we are so fortunate to have so many recreational activities available to us 365 days a year.  We have great sports teams, tons of theme parks, lots of lakes and rivers, a beautiful beach within a hour of almost anyone, and on and on.  That is one reason why so many people have moved to Florida for years.

We just got back from a 3-day cruise to the Bahamas out of Port Canaveral.  A quick hour drive from my home, gone on Thursday afternoon back on Sunday morning.  So many of the other passengers were from Georgia, Maryland, Michigan, etc.  They all get to spend all day today driving or flying back to wherever they came from.  We are already home and enjoying the day and only 1 day of work missed. You've got to love the Florida lifestyle.

We have 2 new listings for sale this week.  If you have any interest in any of these, please feel free to contact me.  In addition to these we also are constantly getting wholesale properties (foreclosures, fixer-uppers, short sales, etc.), but they tend to go pretty quick so check out our website www.sdrhouses.com/properties.html or join our hot property email list.

--- BOTH PROPERTIES ARE OFF THE MARKET

Realtors and buyers, call us today and we will schedule you a private showing or write up your offer.  Sellers are motivated.

The next step in screening tenants is the application process.  One important thing to remember is to always offer an application to anyone that you show the property to.  This keeps it from looking like you might be discriminating against someone for whatever reason.  I normally just put property flyers and applications on the kitchen counter for people to take with them if they wish. If people want an application, I do a mini-interview with them for about 5-10 minutes just to make sure we aren't wasting everybody's time.

I inform everyone that takes an application that when they return it, I need the following items from all adults: (1) a copy of their government issued ID card, (2) a copy of their social security card or some official proof of their SS number, (3) their last paystub or some sort of proof of income, and (4) a $250 holding deposit. I also want identification and proof of age for any children - that way I can screen the kids too.

Just asking for the above information ends up weeding out probably 75% of all the lowlifes.  Criminals and identity thieves are not going to provide this sort of information to me with the chance of losing $250.

Once I have this info.  I begin the screening process.  I subscribe to a background check service http://www.landlordscreening.com/.  It allows me to search credit (including a credit score), criminal background, and eviction history.  In addition to that search, I do several online searches.  I run their names in the public records of several local counties nearby looking for judgments, child support, criminal offenses, and other trouble.  I run their names in Google, MySpace, and the Florida Dept of Law Enforcement database.

After searching online, then I start making some calls.  I contact their current and previous landlords, and before I call them I go online and check the public records to make sure that they really are/were the owners of the property.  It is amazing some of the stories their landlords will tell.  I also call the current employer. Since I already have their paystub, I just check to verify employment, job position, and time on the job.  Most employers will easily answer those questions but are reluctant to talk about salary.  The paystub normally has all the salary info along with address and social security number, so I can cross reference it with other info provided.

I do have some minimum standards like no convicted felons, no people with current collections or delinquent accounts, no people who have been evicted within the past 24 months, no people with less than 24 months of verifiable rental or homeownership history, no people with less than 24 months of steady monthly income, no people whose combined monthly net income is less than 3 times the rent amount, no people with dangerous dogs or multiple pets. 

When the market is soft, I will bend a little bit on the credit issues and job/rental history issues by having them put up a higher security deposit.  But otherwise I stick to my guns and turn them down. 

I figure it is better to have no tenant than a bad tenant.  And boy have I had some bad ones.  As a landlord and a property manager sometimes you have to be "heartless" in order to not get taken advantage of by your tenants.

Copyright © 2007. Sand Dollar Realty Group, Inc. All rights reserved.

Rob Arnold, ABR, CPL, GRI, Full service and investor friendly Realtor, Managing real estate broker, Licensed mortgage broker, Notary Public

407-389-7318 http://www.sdrhouses.com/ http://www.webuyhousesflorida.com/

There was an article in today's Orlando Sentinel regarding the foreclosure market for Central Florida.  I wanted to highlight that the Sentinel has posted an interactive map on their website, so you can research foreclosure info by city, street, or zip code. I thought it was pretty interesting.  The highest concentration of foreclosures are (1) in the outlying areas that are competing with builder inventory, and (2) in the marginal low income neighborhoods. 

Interactive Map: http://www.orlandosentinel2.com/data/foreclosures/

With the sales market as slow as it is right now, many sellers are becoming landlords by default because they need to do something to cover their monthly mortgage payment.  This has caused a spike in the number of rental properties in many markets.  A few weeks ago I blogged about how the Central Florida rental market had softened up quite a bit.  It seems like rental amounts have decreased and the quality of prospective tenants has also decreased.  I don't like to call some of these prospects the "Dregs of the Earth," but it is Halloween time so something must be going on.

When I first started landlording about 15 years ago, I was fresh out of college and had minimal business experience.  Boy was I in for a shock as to how some people lived and acted.  Much of what I learned about landlording came by trial and error, but I was fortunate enough to learn about Mr. Landlord.com and I eventually got some decent training from their organization and became a Certified Professional Landlord (CPL). 

After being a landlord for a few years I learned that tenants will lie right to your face (or at least conveniently forget about that landlord that evicted them 6 months ago) and will be happy to waste your time and make you jump through hoops.  I learned that you need to develop a system to deal with tenants.  Once I created a system, I was able to screen out (at least most of the time) the troublemakers and get back a lot of my wasted time.

The first part of my screening system is to make sure the prospective tenant is truly interested in the property. So I always make sure the tenant has at least driven by the property before I will meet with them.  The only exception to this rule is that if I am already planning on being at the property (to meet contractors, make repairs, meet other prospects, etc.) then I will meet them without first making them drive by.  Half the people that I ask to drive by, I never hear from again.  The ones that call back to make an appointment to see inside have already screened themselves a bit by doing a drive by and still liking the property.  I also inform them on the phone that I require that they fill out a detailed rental application so that I can do a thorough background check.

If they still want to see inside, I set an appointment to meet with them. I find it absolutely amazing that someone will make an appointment with you (sometimes only an hour prior to a meeting) and then not show up.  This was absolutely frustrating to me.  So now I never schedule an appointment to show a rental unless I am showing it that day.  If they call me on Tuesday and want to schedule an appointment for Thursday evening, I tell them to call me on Thursday afternoon and we can set up a time.  Otherwise, the odds of them showing up at all are very slim indeed.

When I meet them at the property, I try to do some more preliminary screening.  I always offer everyone a Rental Application  so as not to act discriminatory.  My rental application has strong wording on it, and I like to point that out to the prospective tenant.  I want to know who this person is, that they aren't going to be making trouble for me, and that they are going to be paying me the rent in a timely manner.  So I screen heavily and let them know that. 

I will go into detail on how I screen applicants in Part 2 of this article.

Copyright © 2007. Sand Dollar Realty Group, Inc. All rights reserved.

Rob Arnold, ABR, CPL, GRI, Full service and investor friendly Realtor, Managing real estate broker, Licensed mortgage broker, Notary Public

407-389-7318 http://www.sdrhouses.com/ http://www.webuyhousesflorida.com/

The latest MLS market statistics are out for the month ending September 2007.

The inventory of listings appears to be flattening off.  The number of homes on the market has been hovering around 25-26,000 ever since late Spring.  This is a good indication that the Orlando market is close to bottoming out.  Again, by bottoming out I don't many it is recovering and everything is rosy again.  Bottoming out to me means that inventory levels flatten off and the market gradually starts working itself back to a state of normalcy.

The somewhat frightening (even jaw dropping numbers) are (1) the New Contracts (properties that went sale pending during September) dropped 19% (1173 vs. 1451) and (2) the Sales Closed during September dropped a staggering 37% (924 vs. 1467).  The Sales Closed statistic is a little misleading though because many of these sales do not get posted for several weeks after closing, so they will be revised upward a little bit on next month's report.  However, these month over month changes are quite drastic.

On a good note though, things appear to have picked up slightly in the last 2 to 3 weeks - more phone calls and more property showings.  Things do tend to slow down slightly right after school starts back up and then business usually picks up a little until Thanksgiving time.   

Copyright © 2007. Sand Dollar Realty Group, Inc. All rights reserved.

Rob Arnold, ABR, CPL, GRI, Full service and investor friendly Realtor, Managing real estate broker, Licensed mortgage broker, Notary Public

407-389-7318 http://www.sdrhouses.com/ http://www.webuyhousesflorida.com/