This Week I Got Scammed

This week I spent most of my time focused on leases. I don't want to sound like a snob, but leases pay somewhere between $50 and $100 each and so writing a couple of leases can be a thin paycheck week, and it’s a far cry from even a small sale. But here's what happened, I had two great lease clients who both really wanted to rent a unit that I had showed them--and nothing I tried to sell anyone else “stuck”--so a couple of leases to clients I enjoyed spending time with is better than a sharp stick in the eye.

I must say that for the moment (at least) I like both of my new lease clients, and am trying to provide each of them a comfortable lease with no downsides to them or the landowners. These are upwardly mobile people, and anxious to move into a home that is nicer than where they have been. Well to be fair, one of them is year 'round and moving up, the other is taking a condo in Sarasota for the winter. But that couple has been wintering on the east coast, so I am thinking they are moving up too.

And then I found myself in a scam.

Let me back-up my story about a week or two to the point when I listed a large condex, this was probably 10 days ago. I had known the owners for some time, and in fact years back my wife had been their agent and I had been the broker on the sale of this condex to these folks. Anyway, we met with them at the house and filled out the paperwork (Realtors are always filling out paperwork) so that I had their legal permission to rent the property.

A day or so later I entered the listing and almost immediately started getting calls. But here's where this one became different from any rental listing I ever have handled before. I started getting calls from people asking me why the home was cheaper on Craig's List than it was in the Multiple Listing.

I had meant to enter the home into Craig's List, but had not taken a full series of photographs when I was there to sign the listing agreements, principally because it was raining and I didn't want a rainy day to be memorialized in the listing photos, so I had come back a day or two later and taken the rest fo the photos. But the house had found it's way into Craig's list.

Two clients called me and asked why the home was on ly $900 a month in Craig's List and $1,500 in my listing. I had no answer—and really still don't—but here's what I know:

One of the clients had responded to the email in Craig's List, and asked about the home. They replied that they owned the house (not true) and that they planned to spend more time in Africa (probably true) and so they wanted to rent it cheaply to get a good tenant.

My client sent along her question and what follows is the answer:

From: Home Tagged <home.tagged@yahoo.com>
Sent: Wednesday, August 24, 2011 6:31 AM
Subject: Re: Rental

Thanks for your email. The house is still available. I decided to rent the house because we are going to spend more time here in West Africa, about 4 years... Let me start by introducing myself  I must confess that I am very very new in this landlord business.. However, My name is Sam Gerald. I own the house located at (here I removed the address). Due to my job as a missionary with the General Board of Global Ministries of the United Methodist Church International, I am presently serving as Area Financial Executive (AFE) with the United Methodist Church in Lagos, West Africa.I am responsible for receiving distribution of funds for various UMC projects in West Africa  , and all related works with other mission personnel. my current home is in the vineyard of the Lord in BENIN West Africa.I spent less time in the States so I could not get a hold on any Realtor to handle this rent issue, although it was when I knew how long we are going to stay in Africa  that I decided to rent out the house. However, the initial plan was to sale out the House. which I tried, but sometimes the agents inflates the prize and it takes longer to sell. because of this reason and more we need a responsible person (With good credit) that can take very good care of it as we are not after the money , but want it to be clean and for you to take it as if it were yours.you can call me at +23480-6060-5897. The rent is $900 and 600 for Security Deposit For this 3Bedroom,2Bath Features: Air Conditioning, Dishwasher, Fireplace, Garage, Washer & Dryer, Yard LEASE APPLICATION FORM FULL CONTACT NAME? OCCUPATION? RESIDENTIAL HOME ADDRESS? YOUR CELLPHONE NUMBER? YOUR HOME PHONE NUMBER?  YOUR WORKPLACE NUMBER? WHAT TIME IS THE` BEST TIME TO REACH YOU? AGE & MARITAL STATUS? OWN A PET? OWN A CAR? HOW MANY PEOPLE SHALL RESIDE IN THE PREMISES? ANTICIPATED MOVE IN DATE? REFERENCE? ============================== ======= Application Comment ============================== ======= Please make sure this questions are fill correctly because the best way you answer with your comment will impress me the more to accept your applications. Regards Sam Gerald.

My client followed up with a request for more photos—remember I had not taken a full set when the property was first listed.  In the ensuing days I had filled in the photos in the multiple listing.  Somehow the scam artist had access to the photos in the multiple listing and managed to forward them on to her.  Here is his last email:

From: Home Tagged <home.tagged@yahoo.com>
Sent: Wednesday, August 24, 2011 7:09 PM
Subject: Re: Rental

Thanks for your mail.  Yes it has oversized deck  and i will coming for visit in the state and also great spaces at the back yard....below are more pictures of the inside!!do get back to me with rental application filled out so we can proceed These were the newest photos I had just taken!  So this week I will be trying to deal with this kind of a scammer.

Dane Hahn is a real estate professional with Tarpon Coast Realty in Boca Grande, Englewood and Sarasota.  He can be reached at dane.hahn@gmail.com or see his litings at http://www.danesellsflorida.com/

2 Weeks in Washington, Instead of Martha's Vineyard

As I begin to write this, all the touchstones I usually check are trembling.  The market is down AGAIN, this time 420 points (it’s OK to call these points dollars) and the president has arrived in Martha’s Vineyard (Massachusetts) for his annual 2-week vacation with the family.

Last week he turned 50 and the market presented him with a birthday swing: down 500 points (dollars).  I’m not saying he’s the cause of the dumps in our economic world, but he apparently isn’t interested in being the cure.  Sure it would be nice if the market cured itself, but it seems like it’s too much trouble for our president to actually take control of the house and senate and try to make the whole system work. 

I know the president feels it’s appropriate to blame others; George Bush has gotten a pile of blame (and he may have deserved some of it, even though the Dem’s had the White House, the House and the Senate for 2 years).  Now Japan and the Tsunami have gotten some blame, I don’t get that exactly—what was the problem there, no new Toyotas?  And of course the Tea Party, they’re easy to blame—they’re sort of a “Republican Cloud”—with no names or faces.

Some years back I worked at Fidelity (the bigger than life-sized investment guys).  I wasn’t a stockbroker or investment guy, Fidelity owns more than 50 publications and I was a group publisher there.  But let me tell you a little about the culture at Fidelity.  They don’t suffer foolishness easily.  If my department results were down, there would be no vacations approved—mine or anybody else’s until we were back on track, period.  It wouldn’t matter if I had a $10,000 deposit on a vacation house on Martha’s Vineyard and my whole family was coming in from the rest of America, If I tried to pull that kind of a stunt, I’d have no job on my return.

Since those days I’ve owned a bunch of businesses.  And that kind of culture has stuck with me.  When there is a job to be done, you stay and get it done.  No vacations, no leaving early and no bonuses.  I’ve made a lot of money and I’ve lost a lot of money, (making money is better) but I never took off when there was a problem that I felt I had to solve.  My wife will be the first to tell you we cancelled vacations and I worked weekends when we were faced with these kinds of issues.

So why can’t our Commander in Chief call the House and Senate members back to Washington and finish the business of America.  Take it one day at a time, for two weeks and get ‘er done.  Here’s a plan they can follow:

Day one—Address the unemployment issues, allow employers who hire new employees not to match FICA and other costly employer taxes and fees for the first 12 months of that employees tenure.  Come on, make hiring new workers worth doing.

Day two—Address the housing issues we have.  I am still in favor of bulldozing the older homes in poor condition, which are in foreclosure, and selling the newly vacant land to developers.  Bonuses would be paid to developers who build affordable housing and discounts on loans to those who buy them.  Fewer houses will drive up the market and make home sales happen again.

Day three—Address the illegal alien issues.  Plan a whole day to fix the leaky borders, and develop methods of enforcing the laws we already have on the books.

Day four—Take some time to deal with the little things, TSA, Student Loans, Flood Insurance, and term limits—suppose we cap each Senator at 2 terms and house members at 4.  If there’s still time, adjust the president to one six year term--and then go home early (Thursday afternoon would be a good time to relax).

Day five—Prepare the budget for next year. And pass it.  Stay late if you need to. (It’s a Friday in the summer so you don’t want to leave early and get in the weekend traffic anyway).

Take the weekend off.

Day six—Rethink the decisions of a couple of weeks back, and fire the group of midgets who have been chosen to make economic decisions—I mean what is that all about? Wait until the Supreme Court gets a hold of that. Then pass a balanced budget amendment.

Day seven—Discuss and change the IRS’s thousands of pages of tax laws into a simple flat tax.  Rule one, everybody pays 17%, with no deductions—except--If you make less than $50,000 you only report half of your income.  If you make $50,000 to $250,000 you report 75% of your income.  Over $250,000 you pay tax on all your income.  If Social Security is taxable, so is welfare. If Warren Buffet wants to pay more, great.  I say he gets a special lapel pin to wear around and show his buddies that he’s rich and sends in more than he owes.  You can get one too.

Day eight—Let’s plan to spend the day getting all our soldiers and service people out of harm’s way.  Let’s declare all the overseas wars as having been won by us, and bring them home.  Maybe we can employ the troops for the balance of their duty, but on American soil, and have them finish up the shovel ready jobs we didn’t get to.

Day nine—Time to close some of the departments that really don’t do anything.  The Department of Energy only hinders those in the energy business, the Department of Education hinder those who are trying to educate our youth.  Let’s look at each “department of…” and do a simple thumbs up or thumbs down.  Ditto with the various Czars. If you get a thumbs down, your department simply goes away.

Day ten--By now the world will see that we are finally serious and making good progress with our future plans, and our triple A credit rating will be returned, but instead of going home early, let’s take the time for one more vote to repeal the Obama Health plan.

That’s it in a nutshell, two weeks in Washington while the family is on Martha’s Vineyard.  But when these politicians sit down to write their memoirs, the chapter on “what I did on my summer vacation” will be meaningful.

(I know there are lots more topics that our legislators need to address, but this would be a pretty good start on the business of America—don’t you agree?)

Dane Hahn is a real estate professional with Tarpon Coast Realty in Boca Grande, Sarasota and Englewood.  You can reach him at dane.hahn@gmail.com or see him on the web at http://www.danesellsflorida.com/

In Florida, It's Time to Think About Hurricanes

Hurricanes and tropical depressions in the Atlantic made last season one of the worst on record, thankfully the West Coast of Florida was spared over and over.  In all last season there were 21 tropical depressions, storms and hurricanes during the official season from June 1 to November 30.

For a home to withstand the extreme winds of a tropical storm, the keys are structural integrity, shape and mass.  Today, new construction usually boasts thick concrete walls and reinforced steel foundations with monolithic roof frames, tied together by straps set into the concrete. Wooden roofs are tied to the CBS (Cement Block with Stucco) walls by steel straps.  Then the roofs are sheathed in a rubber membrane.  Today's best windows are made from durable uPVC.

Roof materials that can withstand high winds--think steel, fiberglas or engineered tile--are generally available in popular colors and provide good choices for homeowners.  Finally the best protected homes often have electric shutters–for convenience and even long-distance operation—say by computer from your office in a far off city.  But most all also have a manual capability because utility companies may shut off power when a storm is on its way, and not return the power until the clean-up is nearly complete.

Old timers know that when you ride out a storm, you don’t usually “see” a hurricane but you sure feel the plummeting pressure in your cranial sinuses, people often recount suffering low-pressure headaches and of course you hear the screaming noise of the wind as it rattles the palms and burns the bark off trees. Many homeowners are retrofitting their houses with a "hardened" room, where they can be protected from the storms outside.

Most cities and regions in the hurricane-prone world have developed sophisticated building codes. These apply especially to waterfront properties likely to bear the full brunt of any storm.  In Florida, numerous groups regularly campaign for ever-stricter building codes while floridadisaster.org lists approved contractors to retrofit storm resistant features to a home, as well as do-it-yourself tips.

The Hurricane Mitigation Promotion Act – now being debated, is designed to heighten storm preparations not just in Florida, but also in vulnerable states from the Gulf of Mexico to New England. Supporters are calling for an annual “tax exemption week” for householders who buy portable generators, emergency lighting, storm shutters and “tie down” systems for roofs.

Each dollar spent on mitigation returns $3 to $4 in benefits to families, businesses, communities and society, according to the Federal Alliance for Safe Homes. Their data indicates that in Florida the annual projected loss from hurricanes is $3.5 billion, this would far exceed the estimated $24 million in lost tax if the exemption week were introduced.

Meanwhile, local developers already adhere to new building regulations.  In Florida we’re governed by strict federal, state and local codes. Builders must build above the relevant flood zones –depending on where the home is, from 11ft to 17ft above mean sea level.  There’s a great deal of concrete and masonry, in each new home and sometimes pilings below ground. Most houses today are built with some or all of these techniques.

For those still unconvinced that preparedness is worthwhile, check the photo evidence; especially the before and after shots. Take a look at an aerial photograph of almost any row of houses after a hurricane. You can immediately tell which were built to code--they’re intact, while the other homes are damaged or destroyed.

A forecast from Colorado State University predicts above-average storm activity in the Atlantic this year. It warns of five major hurricanes, nine lesser ones and 17 other large storms likely to affect prominent holiday home islands and coastal regions.

Dane Hahn is a real estate professional with Tarpon Coast Realty in Boca Grande, Englewood and Sarasota.  He can be reached at dane.hahn@gmail.com, or on the web at www.danesellsflorida.com

Real Estate Edge: Florida CDD's Can Be a Real Dealbreaker

Real Estate Edge: Florida CDD's Can Be a Real Dealbreaker: "Last week I was looking for a house for a new client, and after doing a search of the multiple listed new homes we found one he really liked..."

Florida CDD's Can Be a Real Dealbreaker

Last week I was looking for a house for a new client, and after doing a search of the multiple listed new homes we found one he really liked.  It’s a duplex and it has everything he hoped for.  But it came with something he didn’t want, a CDD.  Maybe you know what that is, and maybe not—but read on, I think you will agree it’s something to be aware of and in Florida it may come with your new home.

The home he liked is in development called Gran Paradiso which is in the netherlands of Venice and Northport, it’s one of those developments on Rt 41 that got started, but has never been finished.  Today Gran Paradiso offers a brand new finished property for sale, the promise of a clubhouse and other high end amenities and if you visit you’ll find a whole network of roads with curbs and lots of vacant land.  Obviously it’s a good idea whose time has never come. 

But the home for sale is sweet and new and amond other things it comes with a CDD, and there’s the rub.  CDDs are special entities used to fund roads, water, wastewater plants and other projects necessary to build homes, shops and industry.  This concept of a “bond” called a CDD was invented about 50 years ago, They were first used in Florida in 1980, and there are now something like 575 CDDs around the state.

When funding infrastructure in new communities, there are a number of options. A city or county could pay for the utilities, but in today’s economy a request for the installation of water and sewer systems and more would likely be rejected by existing residents who would not benefit from them.

Alternatively, a developer could bear the cost and add the infrastructure expenses to the prices of homes he would build but that is expensive to the developer and could make the cost of homes in a subdivision too high and put them at a disadvantage with rival housing developments and with mortgage bankers who depend on appraisers (who wouldn’t see the value).

CDDs, on the other hand, serve as a vehicle to issue debt to build, and then own, the necessary infrastructure. The bonds are repaid only by residents who directly benefit from the improvements, and by spreading bond payments over many years, subsequent homeowners who will benefit from the roads and wastewater systems also share in paying the cost for the benefits they receive through special assessments included on their tax bills.

But of course today’s selling prices are so much less than the builders originally estimated, that when you take today’s price of the home and compute the monthly mortgage payment, the CDD, taxes and HOA fees just about double the monthly payment, making the home just plain unaffordable.  The monthly mortgage on this property would run around $900, the CDD and HOA (Home Owner Association) fees and taxes would add another $810 per month.  These numbers will likely put the future success of Gran Paradiso in jeopardy.

Not all CDD’s are that harsh.  Only about 12-15 years ago, there were only 8,000 residents in The Villages, an active adult retirement community an hour north of Orlando. Now there are more than 80,000 residents, with still more moving in almost every day.  Building The Villages, and Disney’s Celebration just southwest of Orlando was made possible in large part by the use of CDD’s.

So the message here is CDD’s may be the best way for a developer to make his dream happen, but as a buyer you better be sure you share the dream, because you certainly will share the cost.
Dane Hahn is a real estate professional with Tarpon Coast Realty in Boca Grande, Englewood and Sarasota, and The Gove Group Realty in New Hampshire. You can reach him at 941-681-0312 or at dane.hahn@gmail.com,  Or see him on the web at http://www.danesellsflorida.com/ and http://www.danesellsnh.com/