Picture this… You’re about to sell your house and retire to Florida. The documents are signed, movers are hired, and all you need to do now is confirm that the title company’s wire has hit your account. You receive a call from the closer that the funds have been wired. You check your account—no wire.
An hour goes by, then two, then twenty-four hours, then two days. When you ask the title company to confirm the wire instruction from “your” email, you discover to your horror that the wire instructions “you” sent were not from you, but from a hacker who got into your email, found out you were selling your house, and sent fake instructions to the title company.
This has happened before and will almost certainly happen again. But it doesn’t have to if you are diligent and careful.
Over 300,000 new people became Florida residents in 2017, continuing a growth trend that shows no signs of slowing. With the new tax act squeezing many residents of high tax states in the northeast, the trend of continued population growth in the sunshine state is only expected to rise in 2018. Many new residents purchase new homes or convert their previous vacation or second homes in Florida into their primary residence. If this purchase or conversion is completed by December 31, those new residents may be eligible to apply for a Florida Homestead Exemption the following year.
Florida has two types of homestead:
The first is set forth in the Florida Constitution under Article X, Section 4, which is an automatic provision to protect homeowners from claims of creditors or spouses who exclusively hold title, and to insure that a surviving spouse is not made homeless. This protection is automatic based upon purchasing a house, condominium or cooperative and making it your primary residence.
The second form of homestead is known as the Homestead Exemption, and it is also set forth in the Florida Constitution under Article VII, Section 6, which provides a financial exemption from real property taxation of up to $50,000 in home value. Additional exemptions are available for veterans over 65, low income senior citizens, surviving spouses of a veteran or first responder that died in the line of duty, and certain disabled persons.
I often get calls from real estate agents regarding residential real estate deals that end in disputes. So the natural question I always get is, if the Seller refuses to return the deposit, how do I recover my client’s deposit?
Usually the call comes after the Seller refuses to sign a Cancellation of Contract arguing that the Buyer did not provide an adequate reason for termination or defaulted in some other way. Also note that when money is held by title companies, or other third parties acting as escrow agent, those parties can not release the deposit to the Buyer without a court order or signed release. In many cases the title company will instead transfer the deposit to the county court by filing an interpleader action, thus costing more fees and costs.
My initial answer is that there is no immediate solution. There isn’t much a real estate agent can do at this point. The Buyer and Seller need to resolve their legal dispute, either on their own or with the help of lawyers. Continue reading →
If you are thinking about purchasing a rental property make sure you are not making your decisions based on common, incorrect assumptions. With rising prices and historically low interest rates the real estate investor is back in full swing. However, buying a rental property and counting on it to pay for your retirement or provide you easy monthly passive income may not be a smart move.
Home vs. Investment
Arguably the most pervasive myth when it comes to investing in real estate is the belief that buying a home is a great investment. To be clear, buying multiple rental properties and relying on rental income from those properties can actually be a good investment. However, purchasing your primary home and relying on it to fuel your retirement is rarely ever a good idea. Your house isn’t an investment, ATM or piggy bank. It is a place to live in. Do not forget that. Continue reading →
The dream of home ownership is as American as hot dogs, baseball and apple pie. At least that was the theory until the great recession that ruined home ownership for millions. With the economy mostly recovered, mortgage interest rates at all-time lows and rents rising, is it now better, once again, to own or rent?
Homeownership levels continue to fall with the level of ownership hitting a 50-year low last quarter. Currently only 62.9% of households are owner-occupied. Ownership levels are highest for seniors, and at an all-time low for millennials at 34.1%. We can attribute this trend to several factors:
Longevity: Determining whether to rent or own is dependent on several important factors. First, how long do you plan to stay in your next home has to be determined, because one of the best benefits of home ownership is tied to longevity of ownership. One key factor tied to longevity is how mortgage loans are front loaded with mostly interest. Fixed Rate Mortgages are amortized to provide a fixed monthly payment over the life of the loan. Initially the payments are mostly interest, with only a small amount going to principal. A typical $250,000 house with a $200,000 loan will only have principal reduced by $19,000 if sold within the first five years. It takes nearly 20 years to reach a 50% reduction in the loan balance. Continue reading →