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Central Florida Real Estate Blog - Marc Grossman, GRI

November 2007

I Have A Big Mouth - One Way To Have A Deal Go South!

Nov. 29, 2007

I Have A Big Mouth - One Way To Have A Deal Go South!

vacant land pic stolen via google imagesHere's the deal or what may have actually been the deal! I have several acres of land listed for sale. An agent asked me to walk the property with her and her clients.

No problem, while we were doing so it was talked about them possibly considering subdividing the property in the future. Their Realtor, nor myself, thought that there would be an issue with this and further thought that they would be allowed to deed the property with it having ingress and egress via the other parcel.

OK, so long story short, which is extremely difficult for me. On Monday, I called the Zoning office and asked questions about the possible subidivision of this property. I found out that the county no longer allows them to have a common drive and that each property has to have its own dedicated driveway.

Since I knew that this was a possible concern, I informed the other Realtor of such. She told me that they were planning on making an offer, but she would have to contact them about this information and let them know. Well, needless to say, they is no offer forthcoming.

i guess if i keep on stealing these pics from google, this may be the outcome!I look at this several different ways & would like your take on such. Some will think that it was not my responsibility to let the other Realtor know what I had found out, since it was most likely her duty to do such for her clients. Others will say that once I found out this information, it was my duty to inform all parties of such. I can also see others saying that I should not have called at all & that was my fault for doing such.

Again, your thoughts!

Till next time - Marc It Sold!

My Bank Wants to Give Me An ARM - I Guess They Want A Leg!

Nov. 25, 2007

another image stolen via googleThis is amazing with all that's gone on within the mortgage industry. I was just going through some mail that I'd put aside and there was a letter in there from a lender on one of my rental properties. They wanted to offer to lower my monthly payment a little over $300. The rate was going from 7.375% to a 6.746% APR. OK, so what's the catch. Well it appears that the actual rate is 5.875% and they wanted 1.605% points. Right here I'm going to myself - OK, so they're charging points looking to make some quick cash. Everyone knows that points are just upfront interest. So then I turn over the letter and look at the other side. This is what it says:

This loan is an adjustable-rate mortgage which carries a fixed rate of interest for 10 years, and does NOT have negative amortization. (Well that's a good thing at least.) Interest-only payment is for the first 10 years of the loan term. After the first 10 years, the payment will become fully amortized, paying both principal and interest for the remaining term. The payment will adjust annually starting with the 11th year.

At least they added the following:

stolen from us news & world via google images - whatever!Paying interest only will not reduce the outstanding balance of your loan and will increase the overall cost of the loan. Your payment will increase substantially at the 11th year.

Now the sad part is that many people will go for this because all they are looking at is the monthly payment. Someone wrote in one of their posts that people are stupid. I like to think better of people, but must admit that they are generally greedy. Many will not even consider the consequences. Many will not even read or care what the loan is about - just that they've reduced their monthly payment - albeit temporarily, but what the hey!

Till next time - Marc It Sold!

You Are What You Wear - The Psychology of Color in Dress

Nov. 21, 2007

We've read much talk about the psychology of color in staging and decorating a home. But there is much to be said about our dress & what the colors evoke in others.

Colors affect us both physically and emotionally depending on their use. It has to be noted that color psychology differs from color symbolism, which in itself differs greatly between societies, cultures and religions.

Colors are basically broken down into two main categories -

Warm Colors - which are those on the red side of the spectrum including orange & yellow.

Cool Colors - those on the blue side of the spectrum including green and purple

Now to the colors themselves:

Blue - is probably the most popular color, but then one might expect that since it is the color of the ocean and sky. Blue is considered a business color as it reflects reliability. It also symbolizes loyalty.

Green
- is probably only second to blue as a favorite color. Green is the color of peace and ecology, as it is found quite prevalent in nature. But let's not forget that green is also the color of money. Dark green is considered masculine, conservative and is associated with wealth.

Yellow - is associated with joy, happiness and optimism. Remember, yellow is the color of the sun. At the same time yellow can be overpowering when used too much.

Red - is the most emotionally intense color, but it also considered the color of energy. Red is not a good color to overuse and will make someone appear a little heavier, but will also attract attention. A navy blue suit with white shirt and a red tie gives you just the right amount of energy to draw attention.

Orange - the most flamboyant of colors is associated with fun, happy and lively, but also ambition. The different tones of orange usually have a love-it or hate-it relationship.

Black - is the color of authority & power and at the same time makes people look thinner, but remember that it can be very overpowering. Black can be formal, but also can represent evil (think of the bad guys in the movies).

White - What can I say? White wedding dresses, white picket fences, white lab coats. Purity, innocence, clean and happy, but not a fun color to keep clean.

Brown - reliable, stable, solid. It is the color of the earth; and, therefore, associated with nature.

Purple - is associated with royalty, prosperity and wealth. Purple is a more feminine color, but young girls are more likely to choose it. Purple can also appear to be artificial.

Gray - is considered practical, timeless and solid, but also is sometimes associated with depression and loss, whether it be mourning or a general lack of direction. Gray is a great color to use because it mixes well with other colors.

Now, these are basically the primary colors. Different shades will elicit different emotions due to the combination of these colors.

Hope you enjoyed!

Till next time - Marc It Sold!

Wealth & Social Disparity and Real Estate - A Social Commentary

Nov. 21, 2007

It's the old story of the rich getting richer & the poor getting poorer. Even though the average living standards have increased considerably in recent times, the distribution of wealth has become more skewed. One percent of the richest people own 40% of the world's wealth, while the bottom 50% of the world's adult population own barely 1% of the wealth.

In the U. S. alone, the top 1 percent earn as much as the bottom 33%, which is equivalent to over 100 million people. While the U. S. economy has grown approximately 160% over the last 30+ years, the top 1% saw their income levels rise 250%. During that same period, the bottom 90% actually saw a drop of 11% in their average income. These are astounding figures and the wealth distribution disparity continues to widen.

Home equity is a very important form of wealth for most households. Only about half of those in the bottom quarter of the income distribution own their homes, while 88.9% in the top quarter do own their homes. Household debt has consistently trended upward, and it was over 130% of disposable income in '05. As expected, this disproportionately plagues lower-income families moreso and attributes to about a fifth of their income and upwards of 40% for many.

Many and especially the middle class have been utilizing the equity in their homes for continued consumer spending - vacations, vehicles, remodeling, etc. - while salaries have not increased at the same level. The problem is that the equity is running out with lower home prices equating to lower household wealth.

This greater disparity has to affect us as realtors. Each and every day we are shutting more and more people out of homeownership. I've been saying this for years. Here in Central Florida we've been mostly a service-oriented industry. As prices were rising within the last several years and even before then, we've daily locked more and more people out of the market. Our appreciation was approximately 12-13% a year before the last couple of boom years hit. Yes, that has been much better than the national average of approximately 8% per annum.

It is widely believed that one of the main ways to address this gap between the have and have-nots is to improve education and training. But this is not something that can just happen overnight. Our education system has been failing us, but it goes way beyond that to the familial system.

Can this trend possibly be reversed through social and economic policies? This further leads to the question that if such reforms are possible, are they either practical or feasible? I don't know what the answer is or even if there is one. But that doesn't mean that we should just forget or ignore that this is occurring to the fabric of our society.

Till next time...Marc It Sold!

Florida’s Property Tax Fiasco, Like the Energizer Bunny, Goes On & On….

Nov. 21, 2007

Unbelievable! After all of these months of wrangling, town hall meetings, etc, this is the best that they could come up with. The major points of the proposed property tax amendment, which the citizens of Florida will vote on 1/29/08 are as follows:

The homestead exemption will be increased from $25K to $40 or 50K depending on who you speak to. According to the Orlando Sentinel it will be $40K, but a news report on TV and an email from Governor Charlie Crist both refer to "doubling the homestead exemption."

There will be some portability of the Save Our Homes, whether you are trading up or down in the market.

Businesses will now have a $25K exemption on tangible personal property; and,

Businesses and non-homesteaded homeowners will have a 10% annual cap on their tax increases.

For the past six months we've been hearing all of this ballyhooing about property tax reform and this is what they are giving us? To most, this will only amount to an approximately $240 savings. Big Deal!! What happened to the supposed roll-back of our tax base to 2004 levels?? Now, that would have been a savings of sorts. But this is going to do very little for most people that are already experiencing a crunch.

To further exasperate the matter in today's Orlando Sentinel, they are quoting Gov. Crist as stating that "taxpayers 'should have hope in their hearts because it's only going to get better and better and better. This is what they want. This is what they deserve.'"

Damn, I would like some of those drugs that he must be doing. OK, just kidding, but you obviously get my point. I can only think that the governor is alluding to the idea that there will be more tax cuts in the future. I think this is bogus. Once a tax cut is voted on and enacted, that is all we are going to see for quite a while. If this is all they can come up with now, do you seriously think that they'll add to it in the near future? Look what they've done with the property insurance crisis, that should give you an idea.

The sad thing is that this will probably pass because people will be willing to settle for a little something than what they may perceive as nothing.

The legislature did do one thing right in that they've included portability of your SOH. Yes, this should increase sales in that people will not feel as 'trapped' in their homes as they may be now. But this is not enough. Do we demand more?

I have to wonder how much power we have as voters. I apologize if I appear cynical here, but… Yes, we do have the power to elect our officials and even vote them out of office. But what happened to 'of the people, for the people, by the people.' Unfortunately, but politics appears to be just another form of Big Business and the pandering to of such.

Look at the data, but distance between and have's and have not's is ever so widening. Moreso, then ever before and there is no end in sight of this abating.

Since I'm getting off the topic somewhat… Crist signed his letter 'May G-d bless you…' Now, don't get me wrong, I do believe in g-d, but that is neither here nor there. What the heck ever happened to the separation of church & state? More and more we see the two intermingling.

Till next time - Marc It Sold!

Real Estate – Still One of the Best Investments Around – Do You Believe It?

Nov. 21, 2007


You should! Yes, we've read and heard about the all the doom & gloom in the real estate and mortgage industries. And there is a lot of truth to this. But at the same time we need to look at the larger picture. I know that for some that may have gotten caught up in the fiascos of late, that this will be next to if not impossible to do; and, I can greatly understand that. The long and short of it is this - Real Estate was never meant to be a short-term investment and as a long-term investment, it has proven itself time and time again.

Let's first look at what brought us to this point. Firstly, we found ourselves in a seller's market, in which the demand was greater than the supply. Part of what led us to this was the attraction of 'easy money.' Lenders where making loans & people where procuring loans & in many instances neither should have. We've seen interest-only loans, 100% financing with loans, no documentation loans, adjustable-rate mortgage loans, etc. These in themselves are risky, nevermind that fact many did not see or in some cases were never shown the complete picture.

Then we come to the people that were trying to 'flip' houses. This is fine and dandy if you bought it at the low end of the market, but many were out there buying at the top of the market and are finding themselves encountering losses or worse yet, a foreclosure.

The lack of buyer confidence in recent months has been one of the principal reasons for holding back sales. That and the fact of high inventories and also that housing prices are out of sync with incomes in many areas. But we are now seeing an increase, unsteady as it may be, in buyer confidence.

It has to be understood that the market changed quite quickly. Builders in general do not have the ability to respond that quickly to market changes. It takes months of planning, permits are pulled, supplies are ordered, etc. This has added to our increase in available homes for sale and has pretty much dampened the existing home market. Builders have been discounting their homes to get rid of inventory. But, we are seeing a cutback in construction and this bodes well for the market in that it will lower the existing inventory & help to steady home prices.

It also appears that the mortgage market conditions are improving and that we are seeing more availability of loans. Granted, most of these are conforming and not subprime, but here we are seeing a resurgence of FHA backed loans.

Yes, we've seen a lot of doom & gloom, but there are also a lot of positive signs as well. Everything is relative and has to be put into perspective. This is not the first time that the real estate market has had to deal with a downside. This will also not be the last time. The real estate industry as with almost everything else is cyclical.

Right now interest rates are still relatively low at approximately 6¼%. We are entering an election year; and historically, this has also worked well for real estate sales.

We keep on hearing about the median price and lately we are hearing about it dropping. But much of this could be contributed to the fact that there are fewer transactions at the top of the ladder, so to speak; and, this will just distort the figures downwardly. I still feel that a better judge is the average sales price. Except if you purchased within the last two years during the market run-up, if you wish to call it; you will find what I consider a great deal of appreciation for most of us.

According to the average sales prices in the Greater Orlando area, if you purchased a home 3 years ago, it would have appreciated over 32%. That isn't too shabby! If you bought that home 4 years ago, we're looking at approximately a 52% appreciation. Most people on the average own their homes for at least 5 - 7 years. If you bought that home in Sept. '99, your home would have appreciated approximately 113%.

Again, this just goes to show you that real estate is a great long-term investment if not one of the best. There are many great homes out there & some great deals also. Most expect the value of their home to appreciate over the next five years.

In general, home sales and home prices should increase in 2008 as compared with that of 2007.

Til next time - Marc It Sold!

Let’s Remember to be “Thankful”

Nov. 21, 2007

Lately, I've been back and forth between home & Memphis & have not had the time to blog. The following is an article from my newsletter that I sent out about one month ago & just wanted to share it with others.

Originally, I had planned to write an article that was real estate related and might be useful to you. But, then I came to experience a set of events and wanted to write on a more personal level and more to the point about time, life, awareness and being thankful. Forgive me if I tend to ramble for there are many things that come to mind. Additionally, many of the comments that I will make may pertain to some and some to others; in other words, there will be a lot of generalizations.

I don't know how many of us wake up each day and reflect on how thankful we are for what we have - intangible as well as materialistic - and where we are in life. Now, I'm sure that most of us are cognizant of this on some level, but do we really think about it? Or, do we, in most cases, just take it for granted?

Now, in the 21st century, more so than anytime before we find ourselves running from one place to another - trying to get this done, that done, take care of our family, work, home, etc. And, it seems that this list just goes on and on. We find ourselves with not enough time to accomplish just our daily living activities and even enough time to read this article. But, I thank you if you've gotten this far.

We hear about tragedies occurring daily in the news. More often than not, we think about this but do not even consider that it could happen to us, our acquaintances, our friends, our family. But it can and oft times it is too late to say the things that we might have wished; taken the time for that phone call that we would put off; or, even just to be thankful.

The reason that I am bringing this up is because a situation of sorts did occur to my family & myself and I realized while spending many hours bedside, who would have thought that this could happen to us. And then, when I came back home to Orlando for a respite I started thinking of all the things that I needed to be thankful for.

We know that life is not easy, but it is just what it is - Life! We've all had our ups and downs and some more of one than the other. But, generally, when you really get down to it, we are all so very lucky. Sorry to say, but there are usually many people less fortunate than us. I'm not saying in any way that this is fair, just generally a fact.

Life to me is made up of a series of patterns. We all have them - some good, some innocuous, some not so good, and some down right bad for us. Think of it and you might realize that this is so. Think about the way that you prepare for the day. Do you generally do the same thing step by step each day? Most of us do. Even the way we drive to work, or how about the way that we eat?

But on the other hand, I believe that patterns are meant to be broken - especially the bad ones. How many times have you seen someone doing the same thing over and over again, but expecting a different result. This will not happen. How about that friend that we have that keeps on making bad decisions with a mate. I know, I've been there myself.

Sometimes we have to be introspective. We need to take the time to look at ourselves and see what makes us tick. Why are we making that decision? What is leading us up to that outcome? If you look within you will note that there is a pattern. Once you realize this than half of the battle is completed. But, that isn't enough, then you have to want to change that pattern so you won't be doing the same thing again and again and expecting a different result. You will be doing something different and yes, you will most likely come up with a different result.

We don't know what tomorrow will bring. Our situation and life can change in a nanosecond without any warning.

So why don't we take that time in the morning when we arise to reflect upon what we may have to be thankful for? Why don't we have maybe some sort of phrase taped to our bathroom mirror so that while we are preparing ourselves for the day that we can just remember to say something to someone; or remember to make that call; or just be thankful? Ten to one if we don't do it now, we'll just put it off again and again until it is too late.

I apologize if this upsets some for that is not my intention. It's just something that I felt writing about and to possibly make us more aware.

Til next time...Marc It Sold!

Central Florida Real Estate Blog - Marc Grossman, GRI

Altamonte Springs, Florida

This blog is an avenue to relate information and sites that may be of interest to you in regard to real estate. There will be miscellaneous meanderings about me and opinions in regard to real estate and the Central Florida market in particular.

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