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Orlando Real Estate Law Blog

Tips for those in a home bidding war

In the current housing market, Florida residents and others looking to buy a home should be ready for a bidding war on any property that they are interested in. A combination of low inventory and an influx of new buyers has resulted in higher home prices. To improve the odds of winning a bidding war, it can be a good idea to make a cash offer.

Doing so reduces the odds that a seller rejects an offer out of fear that it will fall through. It also makes a person more competitive against investors who are likely to make a cash offer. Alternatively, it may be possible to win a bidding war by offering to buy the home even if financing falls through. In such a scenario, an individual would be obligated to buy the home regardless of whether he or she qualifies for a mortgage.

Buyers to face competitive housing market

Low inventory, high demand and higher mortgage rates could make it harder to find housing in Florida and other states that meets a buyer's needs and budget. According to Trulia, starter homes that are available today tend to be older, which means that they need to be repaired. Trulia data shows that home prices increased 10 percent while falling 14 percent in since this time last year.

Because of higher prices for land and labor, there are fewer new homes being built for those looking to buy their first property. There are many reasons why inventory is exceptionally low at the moment. One of those reasons is that current homeowners are choosing to remain in their homes despite the high demand for residential property. This is because they may find it difficult to buy a new home at a reasonable price.

Why Florida buyers will go over budget to buy a home

According to a recent survey, roughly one-third of homebuyers said that they went over budget to acquire their most recent property. The survey involved 1,214 people throughout the country who had bought a home in the past four years. Those who went over budget said that they did so by an average of $16,510. This was largely because available homes were receiving multiple offers, which pushed the prices up.

Starter homes were among the most likely to see the most interest after being put on the market. In many cases, buyers will spend more than they planned to if it means getting a property in a desirable location. Younger buyers were more likely to spend over their self-imposed cap. Millennials surpassed their budgets by an average of $24,545 while baby boomers went past their planned spending limits by $8,024.

Home prices on the rise for real estate buyers

People in Florida planning to purchase a home in 2018 may face more difficult financial decisions as home prices and mortgage interest rates continue on an upward trend. Across the country, the monthly mortgage payment for a home that sits around the national median is approximately $1,486. This amount marks an increase of $168, or 13 percent, from the 2016 numbers. For many people, this is a significant sum; it represents approximately 30 percent of the median household income across the United States.

Once taxes, insurance costs and other fees are included, housing costs could easily exceed 30 percent of income for many Americans; 30 percent is the standard figure for considering housing to be an affordable expense as part of a monthly budget. One of the major reasons for the increase in mortgage payments has been an upward trend in real estate prices, partially spurred on by the limited supply of available housing across the country. In addition, mortgage interest rates are on the rise. The interest rates for a 30-year fixed mortgage averaged 4.46 percent in mid-March 2018, the highest amount since January 2014.

Real estate battle puts Jetty Park in dispute

Two communities in Florida are dealing with a long-running real estate dispute that is dividing port commissioners and other local officials. Port Canaveral and Brevard County are engaged in a dispute over 9.6 acres of land, part of Jetty Park located in the town of Port Canaveral. The county leased the land to the port for 20 years beginning in 1995 for a nominal amount of $1 annually. After the lease expired in 2015, the parties have been unable to reach a new agreement for the future of the land to either renew the lease or for the county to sell the land to the port.

The disputed land comprises highly trafficked areas at the park, including a parking lot as well as the main entrance road to the area. The park takes up 45 acres in total, and the port owns the remaining 35.4 acres. On that portion of the land, the park features a fishing pier, restaurant, campground and other sites.

Commercial real estate market expected to stay strong

Some people in Florida who have invested in the historically strong commercial real estate market may be concerned about reports indicating a potential downturn. In 2016, returns came in below the 20-year average for the first time since the financial crisis of 2008. However, those returns have hit double digits consistently throughout the past two decades, with an average of 10.1 percent.

While some forecasters have projected returns of 6 percent in the real estate sector for 2018 and 2019, all signs point to the continued vitality and reliability for commercial real estate as a profit center. The real estate market does experience cyclical downturns and upswings. However, analysts say the current situation does little to question the utility and value of investing in commercial real estate. Many outlooks fit the decreased returns as part of an overall positive environment for continued, rather than decreased, growth.

Reasons the housing market could be slowing down

Florida residents who are looking for a home may have noticed the recent slump in sales. According to the Commerce Department, new home sales across the nation fell 7.8 percent in January. Sales were down 14.2 percent in the South and 33.3 percent in the Northeast. Among the reasons cited for the drop were poor weather and increasing home prices.

Changes to the tax law may also negate some of the perks of buying a home. The median price of a new home was $323,000, which was a 2.5 percent increase from January 2017. This was partially because the price of home materials went up 3 percent in 2017, and it is expected that they will continue to rise. Fewer homes on the market is another factor that has caused home prices to increase, and this trend may continue as there is less land to build new homes on.

When eminent domain is used by the government

Residents of Florida may have questions regarding eminent domain proceedings. The common questions revolve around the issue of whether a government may take a property under certain circumstances.

A recent situation in Florida provides an illustrative example to these questions. A sewage treatment utility desires a parcel of real estate to update a lift station. Though the utility has attempted negotiations with the owner, it has sought approval to take the property via eminent domain.

What to think about when buying a home

Buying a home represents a significant financial investment for people in Florida and elsewhere around the country. It is also a decision that a person may only make a few times in his or her life. One of the primary considerations an individual may need to make when buying a home is how large it should be. Generally speaking, larger homes cost more and may require more time and money to maintain.

Houses should ideally contain attributes that make them easy to sell. This may prevent a property from being on the market for too long, and it may help a person maximize his or her investment in it. The location of a house may make it easier to sell in the future. When deciding upon where to live, a person may want to consider whether the home is located close to major highways.

Why marriage may be easier than owning a home

To some people in Florida and throughout the country, marriage may seem like a bigger commitment than buying a house. However, this may not necessarily be the case. For example, it may be possible to return a ring or get a refund on a wedding if someone backs out. That is generally not the case if buying a home doesn't work out as planned.

If an individual gets into a dispute with a spouse, it may be possible to simply go somewhere else for a while to let the situation dissipate. If there are issues with the house, it isn't possible to simply ignore or run away from them. When a pipe breaks or a water leak occurs, ignoring the problem only makes it harder and more expensive to deal with.

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