Florida Real Estate News

Jacksonville Real Estate isn’t just for the buyer that plans on relocating and living there. Many of the properties offered in a great city like Jacksonville are perfect for the investor who either wants to flip the property or rent it out. With that in mind, they are several attributes that would-be investors should know about that are common to most buyers looking into the Florida real estate market.

You’ve finally found that piece of Florida real estate that you’ve have your heart set on for years, and nothing but owning one the Cape Sound Condominiums that’s available on Amelia Island will do. In fact, the only thing left to do is to approach a lender to get the money for a mortgage. If you are one of the growing number of self-employed people in the United States, you’ll need to understand that a new set of rules applies here.

Qualifying For That Mortgage

Unfortunately people who are self-employed are finding that they have problems qualifying for that mortgage. They’re finding that the lending institutions are not always up to speed on the fact that self-employed people can have a great standard of living and the ability to show their income in different ways from people who have other kinds of jobs. For example, some banks will require that the self-employed person who wants a mortgage have at least two years of audit business statements to show that their business is stable along with two years of business tax returns that focus on being self-employed. However there is hope. There is no hard and fast rule for what lenders may or may not want to see. As more and more of the American population turns towards self-employment, it’s essential if you have your own business that you stay well organized and maintain good credit. Even if you don’t meet the criteria established by your bank, it’s possible to get a mortgage for the Florida real estate you really want if you have a large down payment.

 If you weren’t aware, the federal government has been offering a first time home buyer credit of $8,000  when you buy your first place.  Unfortunately, if you aren’t already actively involved in looking and making offers, the time to get that credit is soon to run out.  “Act Now” as they say on TV.

More good news may be on the horizon though.  We’re hearing word and seeing more evidence that some legislators are considering extending the $8,000 first time home buyer credit and adding a provision for existing homeowners to get a $6,500 credit for moving up.  Though it’s clear that many others are now buying in Florida and elsewhere, an extension and the new provision would be a welcome helping hand to the upticking economy. Whether you are a first time home buyer or an existing homeowner, it would be hard to argue that the we aren’t already seeing rock bottom prices for real estate in Florida so take advantage of the tax credit, low mortgage rates and the great deals now because buying and investing in real estate in Florida doesn’t get much better than what we’re seeing right now.

Here’s a quote supporting the possibility:

“We would help first-time home buyers, and we would also help homeowners looking to move up to a new home, but we would exclude from the credit speculators who may have recently purchased a home intending to flip it for a fast profit,” said Senator Max Baucus…”

Read more about it here.

UPDATE:  The proposal passed in the Senate and the House may be voting on it today (Thursday).

 According to a new report from the Florida Association of Realtors (FAR), September sales of existing condos in Florida increased a whopping 77% over last year’s numbers.

Confidence in buying is back in a big way and not just for first time home buyers getting the $8,000  tax credit either. 

” (Anita) Williams, broker-owner of The Realty Firm Inc. in Destin, observed that buyers were a mix of traditional first-timers and move-ups, as well as seasoned investors and cash purchasers looking to invest in a rental or vacation home.

“There’s a lot more people coming in from out of state to buy condos here,” she noted. “Once they visit, they want to come back. And they want to buy a place of their own to come back to.” ”

There are a number of luxury and near luxury condos available throughout the state at bank minimum prices and buyers have already started to take advantage.  The clock is ticking on the tax credit and certainly many are rushing to get in but others, particularly those who have watched the market for some time, are buying now because they recognize the market will soon only be going up.

 Read this article for more.

“Starwood Sees Payoff in Patience” – Wall Street Journal 10/7/09

A Starwood Capital Group led consortium is buying the Florida condo assets of the broken up Corus Bank.  In this depressed market Starwood sees opportunity for  real investment return in Florida condos in the near future.

Starwood’s Barry Sternlicht makes their motivation clear:

“In years three, four and five, there won’t be any more new condos being built in these markets and you’ll be one of the few guys with new inventory.”

This is what recovery looks like.  A bubble bursts, consumer confidence understandably goes down, distressed properties accumulate and then, after a bit of time, people remember that unusually low prices, bank approved unusually low prices, are a good investment.  We’re now seeing some of the lowest prices in the Florida condo market than we’ve seen in almost a decade.  It’s especially good for first time home buyers considering the federal incentives now being offered for first time homebuyers in Florida.  Not to mention that that three, four year timeline also works particularly well for students in Jacksonville because of the variety of well built, affordable condos. Parents can invest in both their child’s future through tuition AND in a money maker by investing in Florida property their child can live in as student housing while it accumulates profit and provides real tax benefits.  In Jacksonville’s Riverside Historic District, The Chelsea Lofts has seen a spike in sales as prices were reduced to bank minimums and buyers “waiting for the bottom” found the award winning project attractive.

Read the whole article HERE

Buying a house but not sure what you’re going to use to finance the purchase given today’s climate in the mortgage market?

It’s a buyer’s "make an offer" market. Everyone knows that.

What a lot of buyers don’t know is that if cash out of pocket at closing is one of their impediments to buying, that they can solve that issue in the price negotiation with a seller.

Most lenders will allow a seller to contribute up to to 6% in "seller incentives" to a buyer for approved line items at closing. If a buyer is going to offer a seller a lower purchase price, part of the offer can involve the seller contributing up to the full 6% to the buyer’s costs at closing. In addition to standard closing costs on the transaction the items picked up by the seller could also include points to buy down the interest rate or even a decorating allowance.

If the buyer has not yet selected a lender, a contract addendum could read something to the effect that the seller will contribute 6% of the sales price to buyer’s closing costs in a manner acceptable to buyer’s lender. When the buyer settles on a lender, the lender will tell them what can be paid by the seller per their guidelines, and the closing statement is prepared accordingly.

VA loans are great for military buyers. They allow for no money down loans up to the VA limit without PMI (Private Mortgage Insurance). The actual loan is originated through a traditional bank with the VA guaranteeing a portion of the loan. The VA loan guidelines also spell out what fees and closing costs can be charged.

In order for a condominium to qualify, the entire project must be approved through the VA process, which can be time consuming. The benefits to both the veteran and the developer can be large. The Chelsea Lofts in the Riverside historic district of Jacksonville Florida recently obtained VA project approval and have already received contracts from NAS Jax (Naval Air Station Jacksonville), making the process worthwhile. The project’s proximity to NAS Jax and contemporary loft interiors have been popular with the base squadrons.

You can view a list of approved VA condominium developments here: VA CONDO APPROVALS

So just what is Property Tax Portability? Recent Florida legislation allows residents that are moving from one primary residence to another to bring the accrued property tax savings on the taxable value of their existing homestead property with them to their new primary residence. This can mean up to a $500,000 decrease in the taxable value of the new home, which translates into a significantly lower property tax bill. Under the old "Save Our Homes" legislation, Florida homestead residences are protected to a maximum 3 percent increase in the assessed value each year. Without the portability provision, if you moved from one homestead to a new one, you lost all of the assessed value savings created by Save Our Homes and your new home was assessed at current market value. The Portability Amendment makes that accrued tax savings "portable" so you can transfer up to $500,000 of your accrued Save Our Homes benefit to your new home. EXAMPLE: You sell your current Florida Homestead that has an Assessed Value of $200,000 and a Just (Market) Value of $350,000. $350,000 – $200,000 = $150,000 in Tax Benefit. You buy a new home for $400,000. The $150,000 SOH tax benefit is applied to the new homes Just (Market) Value to creates a lower Assessed Value. So if you own a home in Florida and are considering buying a new home while market prices are at historical lows, a dramatic change in property taxes may not be something to influence your decision. Homeowners who sell one home in order to move into another full time, will find that the taxes on their new property are adjusted to reflect the savings from their old home.

It might not be what you think. The $8,000 first time homebuyer tax credit provided for home purchases in 2009 has a few definition wrinkles that include more people in the incentive than I originally thought. According to the IRS newsroom website, a first time homebuyer is anyone that has not owned a home in the last three years or had a home destroyed by a natural disaster. Its confusing. Maybe they should have called it "the $8,000 recent homebuyer tax credit". Anyway, there are quite a few terms and qualifications. Here is a link to some information that I pulled from the IRS newsroom site: LINK TO IRS NEWSROOM. Anyone making a purchase might want to check it out.