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Orlando Real Estate Law Blog

Mistakes in CRE investing

Florida residents who are interested in commercial real estate should be aware that purchasing and managing investment properties properly requires significant effort. The challenges can lead to certain mistakes, which investors should make every effort to avoid.

One mistake investors should avoid is making decisions regarding investment properties without having all of the necessary information. Making informed decisions about how an investment property may perform requires considering rental rates, expected growth and replacement costs. The type of competition that currently exists or may exist in the future also has to be considered. To help them make choices, investors may consider using the services of professional asset managers whose significant market knowledge, experience and intuition can help locate ideal properties with good potential.

Rule changes for purchasinng a home with a HECM reverse mortgage

A Home Equity Conversion Mortgage (HECM) is a financial solution that seniors in Pennsylvania 62 and older can use to secure the funds they need to purchase a home. Previously, homeowners wishing to complete a HECM reverse mortgage had to determine if they wanted to maximize their HECM cash draw and pay a penalty insurance premium. HUD has since applied a premium that's 2 percent of the borrower's property value no matter how much a senior prefers to draw.

Even with the rule change, HECMs are still appealing to many seniors since there is no repayment obligation as long as the borrower lives in the residential property they purchased. The only notable disadvantage for seniors is that HECMs will only cover 50-60 percent of a home's price. The specific amount is based on the borrower's age. Most homebuyers get the extra funds from asset liquidation. The home must also be either a single-family home or an FHA-approved manufactured home or condominium.

Selling a house during a divorce

Couples around the country who file for divorce sell their primary residence 61 percent of the time according to a study from the real estate marketing firm Smart Agents, and one or both of the spouses involved may have good reasons for wanting to conclude a deal quickly. The upheaval involved in selling a home can strain even the strongest relationships, but many common pitfalls can be avoided if Florida spouses are able to put their differences aside and concentrate on their common goals.

Divorcing couples should find a real estate agent that they both trust before deciding how much to ask for their home. Experienced real estate professionals understand their local markets and will be able to reveal the prices that similar properties have sold for and how long they were on the market before selling. Real estate agents could also provide a list of repair jobs, such as fixing minor cosmetic flaws and sealing leaks, that should be undertaken before a home is shown to prospective buyers.

Parties at loggerheads in Florida zoning dispute

Recent media reports suggest that a Florida businessman is embroiled in a zoning dispute over a proposed used car lot that has dragged on for more than two years. The entrepreneur, who has 25 years of retail car business experience, says that the lot he wants to open would be a welcome resource for those who live and work in an around Parker, but municipal authorities are holding firm to their position that the zoning rules clearly forbid the kind of business he wants to open at the site.

Parker City Council members are concerned because the property is located close to a residential area. Some members fear that the businessman would fill his lot with undesirable junk cars and begin to perform body shop and mechanical work if he were to be awarded the variance he is seeking. The entrepreneur denies these allegations and says that he only wants to sell attractive used vehicles to area residents and the families of service personnel stationed at the nearby Tyndall Air Force Base.

Selling a home during the holidays

Florida homeowners may think selling their home during the holidays may be difficult. However, there are certain things they can do to give themselves the best chances at selling their home before the arrival of the new year.

When it comes to holiday decorating for a home that is for sale, it is best to do as little as possible. Affection for holiday decorations is not universal and seeing decorations that are not well kept or that have excessive religious overtones can deter buyers. Decorations for the inside and outside of the home should be simple and easy to care for.

Loss of homeowner tax deductions could undermine home prices

The tax reform bill moving through Congress could have a big impact on homeowners in Florida, especially those planning to sell. The National Association of Realtors has analyzed the potential effects of the tax changes and concluded that housing prices will drop nationwide by rates of 10 percent to 21 percent.

Although the final terms of the bill have not been completed, limitations to mortgage interest deductions appear to be coming. Currently, people can deduct mortgage interest on home purchases as high as $1 million. Interest on equity debt has also been deductible for an additional $100,000. The coming tax reform will likely remove deductions for equity debt not related to home improvement and possibly cap mortgage interest deductions to loans no higher than $500,000. Deductions would only be allowed for people's primary residences, whereas they can currently deduct interest on a second home as long as the mortgage balances are within $1 million.

Home sellers and negotiation pitfalls

Florida homeowners who are trying to sell their home may encounter many roadblocks while attempting to get the price for which they are asking. While the condition of the home plays a significant role in how much it sells for, the negotiation skills of the seller are also a factor, and there are certain mistakes that should be avoided.

Sellers should make sure to counter low bids with an offer of bonuses to make the asking price more attractive. The bonuses or incentives should be something relevant to the home or its location. For example, fishing equipment or small watercrafts may be attractive to the prospective buyer if the home is located near or on the water. Other types of bonuses may include furniture, a year's worth of a membership to a local gym or a gift card to purchase kitchen items.

Boca Raton may invoke eminent domain

Some residents in Florida may be required to sell their property to protect a local beachfront. Specifically, Boca Raton officials may take possession of seven properties north of the Boca Inlet. In 2016, several property owners were asked to voluntarily sell their properties, but no one was willing to sell. Now, the government may try to use the principle of eminent domain to take those properties.

Such an action would require court approval, and property owners would be compensated for their loss. If the properties are seized, the land may be used to create a series of parks. It may also be incorporated into an undeveloped lot called Ocean Strand. According to local officials, the goal would be to protect the beaches. The preservation effort started in 2015 after a developer won permission to build a 10,000-square-foot house on North Ocean Boulevard.

Unmarried couples buying homes

People who purchase a home are undertaking a significant financial commitment. If they decide to become a homeowner with someone to whom they are not married, they should be aware of the risk it carries.

When married couples who own a home decide to get a divorce, there are protective laws with regard to the dividing assets, including the home. There are no legal protections in place for unmarried individuals who purchased a home together and have decided to go their separate ways.

Basic approaches to selling a home with two mortgages

Homeowners in Florida carrying two mortgages still have the ability to sell as long as they pay off both loans at the conclusion of the transaction. For someone whose house has a value that meets or exceeds the loan balances, the process is largely similar to selling a home with a single mortgage. When the loan balances total more than a property's value, then a homeowner might pursue the strategy of arranging a short sale.

A real estate agent may provide advice and services that help a person sell a home for a high enough price to pay off two loans. For example, an effective marketing strategy could connect someone with a buyer willing to pay the asking price or close to it. If this happens, a title company manages the funds at the closing and distributes the money to pay off both loans completely. If any money remains, then the seller gets to keep it.

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