Friday, October 10, 2014

11% of mortgaged properties are still underwater

 After 6 years of “recovery,” that’s a bunch of financial pain.

While the bounce in home prices nationwide has rolled over, in trendy places like Nashville, New York, and San Francisco, they’re partying like it’s 2005. It’s hard to guess who has shorter memories: bankers, borrowers, or developers.

Real estate is on fire in the country-music capitol and is threatening to bulldoze what makes the city tick (music) for—what else—housing. Nashville is now so cool, the rent’s too damn high. Lydia Harrell worries she’ll be priced out of the city soon. Since moving to town two years ago, her monthly rent has risen 22% from $750 to just over $900. “It’s starting to get a little crazy. If it gets any higher, we’ll have to go somewhere else,” said Harrell.

Higher rents mean short supply and lots of demand, so developers want to tear down Music Row and build apartments and condos. Music stars like June Carter Cash are protesting, but property values are skyrocketing.  In July, the site that houses Studio A was sold to a developer that has said it may be too decrepit to save; many fear the space will be razed and replaced with condominiums.

Maybe Dolly, Porter, and Johnny made hit records on Music Row, but these are just buildings, and unimpressive ones at that. These are pretty ordinary, cheap, architecturally indistinct and disposable structures that nonetheless are consecrated because they produced standards that are part of the American popular canon.

Now lots of people want to enjoy Nashville’s magic, nearly everyone in town looks like the cast of Nashville.  But this one-horse town is growing up, and Music City is in danger of turning into a landscape of luxury apartments, mixed-use retail, and other amenities.

Developers in New York City think they’ve built enough office buildings, so even they are shifting to luxury housing. The NY Times recently wrote: there’s a trend in (NY) city in which a seemingly insatiable demand for luxury housing has upended the traditional pecking order in the real estate world. Building glamorous office towers for Fortune 500 companies is not the surefire route to fame and riches it once was.  With the cost of land soaring and high-end apartments commanding soaring prices, developers whose reputation and wealth has rested on gleaming office towers are now leaping into the residential market in the hunt for profits.

High-end apartments in Manhattan and parts of Brooklyn sell for $4,000 or more per square foot, far more than most commercial tenants are willing to pay. The changing economics of the real estate market have made housing more appealing.

Land costs have doubled and tripled in recent years to $600 a square foot and more as residential developers snapped up one site after another. Commercial developers have often found themselves priced out of the market.

And San Francisco housing prices are going into never-never land. More wealth is concentrated in the San Francisco Bay Area than just about any other place in the nation. Google alone, the story goes, minted 1,000 millionaires when it went public. Ditto Facebook. And Twitter? Some estimate 1,600. Tech worker bees are doing just fine, too, with average base salaries now north of $100,000.
San Francisco has water on three sides and zoning is beyond tough, creating a supply and demand problem.  San Francisco supervisor Scott Wiener, a proponent of new housing, told the Times, “The system is intentionally designed to make it as difficult as possible to build new housing.”

Of course if you’re rich you just pick out the hipster house you like (even if it’s not for sale) and have a hired hand knock on the door and offer double what the house is worth in cash. Most normal people are priced out of the market.

Note to those uber-rich residents in Music City, the Big Apple, and the City by the Bay: Time marches on, markets go up and down, money is made and lost, developers overbuild, and the foolish will overpay and live to regret it.

Tuesday, August 19, 2014

Things I’ve Learned, Part One

Be thankful.   For your talent. For your health, for the ability to see, breath and walk. Be thankful for the time you get to spend with the people you love--being with those people you love is best when you are together, but it's still good even if it's only on the phone.

Your own name is music to your ears. That's why people love it when you remember their names. All that being said, the names I like best are "Dad" and "Poppy".

Wear Sunscreen and quit smoking. I have been paying the price for avoiding sunscreen as a kid and smoking as young man for the last 20 years. I fear I will always have to deal with what I did to myself all those years ago.

All our stuff is temporary. Whatever it is that you have today, whether it's riches, possessions, family or health, it can be stolen away in a moment. All your good things are on loan. So while you have good things, cherish them and be thankful.

If you lose something, even if it seems to be everything you have, remember God never closes one door without opening another--maybe even a better door--so be aware and look for that new door, it will be there.

God expects you to accept help. There is an old joke about a drowning man who was offered assistance by a lifeguard, but turned him away saying no thanks, he was waiting for God to help, then he was approached by a fisherman on a boat offering help, and the man turned the fisherman away, saying he trusted that God would help him. Finally he drowned. At the gates to heaven he asked St Peter why God had allowed to drown. St Peter said, "God first sent you a lifeguard and then he sent you a boat, what kind of help did you expect?"

Read more. There's a great deal to be said for reading a real book--probably Kindle counts too-- for actually turning the pages and for creating the tale in your mind's eye. Finding quiet time and spending the time it takes to read a book is healthy, and allows for some think time too.

Binge watching TV is pretty cool. It's almost as good as reading a book if the show is well written. And it sure beats the hell out of 1/2 hour comedies, or news that repeats and repeats and repeats all day.
Go boating whenever you can. There is nothing...absolutely nothing...half so much worth doing as simply messing about in boats. From the wind In the Willows.

You are the average of your parents. That's a good start. But we are all modified by the people we spend our time with, in other words, you are influenced by your social environment. Choose that environment wisely. Don’t hesitate to make changes when you suspect things (or people) aren’t right.

Childhood doesn't last. When you are a child or a parent, this fact is a happy thought. But later when you have raised your children, you realize it's a shame--you will always remember those little kids, and want them back.

Nobody plants weeds.  But in our social environment, weeds (sometimes in the guise of bad situations) come up.  As soon as you notice them, you must weed your environment, the same is true in your business, don't be afraid to fire people who become weeds.

Real New Englanders save stuff. For 30 years I proudly saved every nail and screw, spring and stick, and oddly found a use for much of what I had "in stock".  But when we moved, it became painfully obvious I had too much junk. Now I am learning to throw things away.

Public opinion is usually wrong. Situations change faster than our society's accepted opinions. They always said you must go to college, you must get married, you must, you must, you must. When our parents went to college--they were in the very top of their age group, when we went to college we were in the upper percentile of our age group, today so many more people go to college that being a college graduate only makes you average--today a diploma is less important and less relevant because the way we do business has changed so much. If you can think for yourself, you will shine at whatever you do.

Remember the nuggets your parents used to say. In the back of my head I still hear my mother repeating her lessons to me. Things like "that may be OK for some people, but it's not for us..." or, "if it seems too good to be true, it probably is..." or, "make me proud". And my father saying, "instead of gambling, you may as well just go throw your money in the ocean--at least you'll know where it went." They never had anything much to say about drinking or smoking, although my father quit smoking only a few years before he was diagnosed with colon cancer. He started smoking again almost right then--saying, "these things won't kill me..."

Perception becomes reality. You must decide how you want to be perceived. You create your own reality in all ways, by how you act, what you say, how you dress, these all contribute to how you are perceived and what becomes your own reality. As they say, "if it quacks like a duck and walks like a duck--there is no question: it's obviously a duck."

Fake it until you make it. A little more about perception, if you act like who you want to be--you will be perceived as that person and in short order actually become the character you have created. If you want to be an artist, do what artists do, paint everyday, act the role, dress the part, go to galleries and people will  perceive you as an artist--talent not withstanding. Perception becomes reality.

Be a good Gatekeeper.  Control your inputs. Some of us only control what we eat and drink but to be a successful gatekeeper, it's more than that. Control what you read, what you watch, what you listen to, where you spend your time, who you spend it with. Good inputs help you, and your environment, bad inputs are destructive, so guard your gates with care.

The greatest reflection of your priorities is your time. It doesn't matter what you say is important to you, the true test is where do you invest your time. If you say your priorities are your family or your health or your business, that statement will only be true if your appointment calendar reflects it.

What appeals to you when you’re alone. When no one’s looking, when the house is empty, when you're alone with your thoughts, when the afternoon is yours alone —where does your mind wander? Your natural wanderings are your touchstone to what’s truly interesting to you and will help focus you on your real dreams.

Most people aren't sure what they want. A lot of good happens when you define what you want. Once you can visualize what you want, put yourself in a position so that your dream can come true.  Talk about your dream and ask others for help in achieving it. When they are realistic, wishes usually do come true. Conversely, be careful what you wish for.

To really know what you think, write it down. When I write something down I find I can edit and rewrite it until I can clarify and clearly say what I actually think about something.

You must vote.  If you don't vote you don't get to complain about who won. And conversely, when you go to the polls, do your homework first. You owe it to yourself and your loved ones to make the best choice based on the abilities and standing of the candidates who are running. Too often we have had popularity contests just like in High School. The best looking candidate is usually not the best candidate.

For a satisfactory career, do just what you like. Doing what is expected of you--by parents, spouses and others, instead of following your passion--usually doesn't work out all that well and wastes your time. When you find your passion, you will work harder (and longer) and become more successful than you ever thought reasonable. And if you are following your passion, it's not really work--it's fun.

Once you have found your real career, the money will follow. I thought I wanted to be a publisher and worked at that for almost 20 years. Then I discovered real estate allowed me to work near home and turn clients into friends. I loved walking into a local supermarket and have former clients say "Hi". And the better I got at real estate, the more money I made. I only regret that I didn't find it sooner.

Exercise in some way. I know exercise is good for me, even if I don't do it all that often. I try to find little ways to exercise every day. I take the stairs. I work around the house and yard, and I try to swim a few laps everyday. Is that enough? Probably not.

Risky business is good. Nothing is a sure thing, so take risks. Nerves on edge is really the only way to know that you’re being stretched. If there hasn’t been a moment of  "good stress" in your life for a month, ask yourself if you’re pushing hard enough.

Stress can chew you up. Learn to accept stress in bite-sized pieces. Burn it off with a walk or a drive or just playing with a dog. Dogs are totally non-judgemental, and love you unconditionally. Think of them as the valve on a pressure cooker, they can bleed off the pressure and make you whole again.

Be genuinely curious.  Curiosity ends up being the driving force behind the most interesting people. Find a topic or two that interests you and allow your curiosity to run freely,  follow where your curiosity takes you.

Pay it forward.  I like the concept, and being generous feels good. I say generosity is paid out in emotions, money and time. It doesn't have to only be money. Be a mentor or teacher or a volunteer, give of your time and energy. And be a spouse or a parent and share your love. Being stingy with your time, energy and emotions will comes back to bite you. As the Beatles wrote, "the love you take is equal to the love you make..." You get what you give--I think that's true.

We are really just tiny beings. In the great scheme of things, we are only a collection of atoms in a poorly understood universe that’s probably infinite. Go outside to admire the trees and mountains, watch a sunset or experience a rainbow. At night look up at the moon or the stars. If you are having problems, they will seem pretty insignificant in the context of all of that.

Build (or share) something. Of course society wants big discoveries like a cure for cancer or an anti-gravity machine, but most of us only make small contributions.  Yet even the small stuff is important. Never forget the value of creating something, even if it is small. Even if you just write a letter, share a great recipe, make a painting or snap a photo--and share them. No matter how insignificant your creation, making something feels good. Sharing your creation makes it a gift. Giving a gift feels good. Plus you'll enjoy the personal pride of your creativity.

Most people live lives of quiet desperation. Most jobs are only average. Most people’s work is mediocre. Most products and experiences are mediocre. Most lives drift to mediocre. If you can rise above what's average, everyone will notice. Being above average is usually only a function of showing up on time with enthusiasm. If you can add value to a company, you will be a success. Remember in the land of the blind, the one-eyed man is king.

People are afraid to take the blame.  We have somehow raised a whole country full of people who will not stand up and accept the blame they deserve, they'd rather hire a lawyer or deny and flat-out lie. I think owning up even to a bad situation shows character and usually solves the issue. Lying is only a temporary solution, the truth almost always comes back to haunt you.

Don’t be too big for your britches. It’s easy to be passionate about great wine, or hand roasted coffee or truly wonderful food; but don’t be above enjoying a paper cup filled with boxed wine, or a cup of instant coffee or a hot dog.

Don’t get disheartened. Attitude is everything. If you get disheartened, the life you planned for is drifting out of your reach. Don’t ever underestimate the value of enthusiasm. Even when things are going south, and enthusiasm is all you have left, if you really have enthusiasm, you're already on the upswing.

Everyone has a vice. Everyone has a fault-line. Don’t spend too much time searching for it, but just know it will be there and don’t be disappointed when you find it in others, it's a human frailty.  You have frailties too within yourself. Maybe you know your fault line. Try to keep it to yourself and just try to do your best.

Listen to your body. And care for it. It's the box you live in and if you’re not careful, your box will fail--sooner than you think.

Understand the value of time. Life ends up being really short, no matter how long you live. You can recover money, you can rebuild houses, you can re-buy stuff — but you can’t get back time.

One day I will die. Maybe even today. It's as natural as being born, and we will all go through it--nobody escapes this transition. You never know where you are on history’s big wheel. You never know what’s coming for you. You must have faith. Your moment is coming.

Sunday, August 17, 2014

Obamacare Taxes and Fees

In Case You Didn't Notice, as of January 1st:

New levies, courtesy of the Affordable Care Act  include an increase on wages and a tax on investment income, including interest, dividends and capital gains.  And bad news for the more affluent  households, those affected will see tax increases averaging $6,000 next year, economists estimate.

To help finance Medicare, employees and employers each used to pay a hospital insurance tax equal to 1.45 percent on all wages. Starting in January, the health care law requires workers to pay an additional tax equal to 0.9 percent of any wages over $200,000 for single taxpayers and $250,000 for married couples filing jointly.

The new taxes on wages and investment income are expected to raise $318 billion over 10 years, or about half of all the new revenue collected under the health care law.

Since the 1930s, payroll taxes have been levied on the wages of each worker as an individual. The new Medicare payroll is different. It will be imposed on the combined earnings of a married couple.

In the Affordable Care Act, the new tax on investment income is called an “unearned income Medicare contribution.” However, the law does not provide for the money to be deposited in a specific trust fund. It is added to the government’s general tax revenues and can be used for education, law enforcement, farm subsidies or other purposes. 

A new 3.8 percent tax applies to the net investment income of certain high-income taxpayers, those with incomes above $200,000 for single taxpayers and $250,000 for couples filing jointly.

The new tax on unearned income would come on top of other tax increases that might occur automatically, the tax rate on long-term capital gains rose to 20 percent in January. Dividends are now treated as ordinary income and taxed at a maximum rate of 39.6 percent, up from the current 15 percent rate for  most dividends.

Under another provision of the health care law, consumers may find it more difficult to obtain a tax break for medical expenses. Taxpayers have been able to take an itemized deduction for unreimbursed medical expenses, to the extent that they exceed 7.5 percent of adjusted gross income. The health care law changes the threshold for most taxpayers to 10 percent next year. The increase is delayed to 2017 for people 65 and older.

In addition, workers face a new $2,500 limit on the amount they can contribute to flexible spending accounts used to pay medical expenses. Such accounts can benefit workers by allowing them to pay out-of-pocket expenses with pretax money.

Taken together, this provision and the change in the medical expense deduction are expected to raise more than $40 billion of revenue over 10 years. 

In summary:
Top Medicare tax went from 1.45% to 2.35%
Top Income tax bracket went from 35% to 39.6%
Top Income payroll tax went from 37.4% to 52.2%
Capital Gains tax went from 15% to 28%
Dividends tax went from 15% to 39.6
Estate tax went from 0% to 55%

While I don't see these taxes and fees affecting the Occupy Wall Street folks,
they certainly affect both young and old people (let's call them folks who don't live in their parents basements, they are mainly people who work for a living and those who are planning for their children's education or maybe their own retirement).

Dane Hahn as a real estate professional serving Florida's Sarasota and Charlotte Counties. You can reach him at

Thursday, August 14, 2014

Communism: Not Welcome Here

I just received this document and thought I'd share it today. Sorry it has little to do with real estate, but everything to do with where you may want to live.

Between 1900 and 2000 over one hundred million people were brutally murdered by communist regimes in search of Utopia. From Lenin and Stalin to Mao Tse Tsung, to Pol Pot in Cambodia and the Brutal Regime of North Korea, the quest to create a perfect society where people accept total state domination has been nothing but bloody.

As a system, Communism demands total and complete obedience to the state--just like ISIS (or as Obama calls them ISIL) and HAMAS; anyone who opposes or stands in the way of progress needs to be eliminated. It's as simple as that.

But bringing a society to the point where they will willingly participate in the slaughter of their own countrymen is not an overnight process. It is a gradual conditioning of the population to get them to believe that some people are not as worthy of life as others.  Today we are witnessing this gradual process unfold before our very eyes, you'll see it on TV every night--even here in the USA.

Gregory Stanton has identified an eight-stage process that generally occurs in the conditioning of a people to prepare them for genocide.  The first step is classification. This simply means classifying people into different groups and intentionally dividing people along ideological lines. (Young vs.Old;  Rich vs. Poor, Black vs. White, Citizens vs. Aliens, Democrats vs. Republicans) Once this is accomplished, stark contrasts can be made between different cultural groups and these differences can be used to incite hatred and create discontent. The job of "boots on the ground" community organizers is essential here because one group of people must be convinced they are being oppressed by another.

In the United States we no longer have the traditional “American Citizen,” who grew up understanding America’s values and the virtues of liberty. Today we have the “hyphenated American” who instead of assimilating into American culture has decided to--and in fact is encouraged to--retain their own culture. This does little more than ensure America’s vast population has no common virtue in which they can unite. The best way to explain this is simply saying, “It's us against them..."

The next stage is known as “symbolization.” This is the process of attaching a negative symbol to ideology of  "them" the targeted group. In the United States today, traditional Americans have been classified as potential terrorists because of their willingness to defend their rights under the Constitution. White males have been classified as being “racist simply for being white”. Once these ideas are established, they are nearly impossible to alter or eradicate. This is especially true when aided by the rabble organizers who are targeted at creating discontent.

The next stage is known as “dehumanization.”  By teaching students that white men are privileged and racist, our elite (liberal) universities are dehumanizing nearly every white male in the country, at least in the eyes of the minorities that whites allegedly oppress. This is why traditional Americans are constantly being called racist for opposing new ideas proposed by the progressive Americans.

Think about the narrative concerning the border. Obama invited Guatamalan children to cross our Southern border--and now opposition to this amnesty agenda has the effect of dehumanizing those who want our existing laws enforced, and the border protected. The same holds true for Christians (in Syria and elsewhere) because they stand in the way of the state’s utopia, therefore they must be discredited and dehumanized in order for them to no longer pose a threat. ISIS has targeted Christians who are already facing extermination at the hands of the Islamofascists.

The next stage is “organization.”  Saul Alinsky’s Rules for Radicals is the organizing bible and teaches minorities that they are oppressed by America’s majorities--a.k.a. evil white men. The story told to emerging nations is that America has the schools, the government agencies, the medical organizations, and the message that America’s rich white men are intentionally keeping them down for financial gain is constant and relentless.

We saw in 2010 the formation of the "Occupy Wall Street" movement. This is a testament to how well the Alinsky rules can organize a political movement. These folks should not be underestimated. The kids from Occupy Wall Street drank the Kool Aid and today would likely follow a charismatic leader on a genocidal march across the land if they believed it would bring about the utopian Promised Land.

The next stage is “polarization.”  There is little doubt that the white man in America is being polarized as over the past number of years we have seen a drastic rise in black on white violence. Black people have been so conditioned to believe that the white man is intentionally keeping him down that violence has become the accepted and justified solution. It must be noted that radical blacks are being used by Alinsky followers to carry out a political agenda. When it is accomplished, they too will be targeted. Some say this is where the US is today, pretty far along, but not quite to the tipping point.

This brings us to the final three stages which are preparation, extermination and denial.”

The genocide would be carried out with the belief that they are doing something for the betterment of mankind. In the end, it’s nothing but the senseless murder of millions. Then, when it is completed, it is denied. To this day there are many people who view the Old Soviet Block as a paradise on Earth and refuse to believe that Lenin and Stalin together, murdered nearly 60 million of their own countrymen.
Whether or not this happens in America is entirely up to us.

You Are Now What You Were Then

What Makes Us, Us?

3. purkinje neurons
We are not born with values, so how do we develop our values? There are 3 periods during which values are developed as we grow. Sociologist Morris Massey has described three major periods during which values are developed.
They are:
  1. The Imprint Period - Age 0 to 7
  2. The Modelling Period - Age 8 to 13
  3. The Socialisation Period - Age 13 to 21
During these periods we develop what many believe to be the 'rudders' of lives; our values. It is our core beliefs that then develop around our values. Beliefs and values have an extremely powerful affect on our lives, because we filter all our information through them and hence develop specific actions as a result, and hence we predetermine our outcomes. Thus if we develop a belief such as "I'm too fat", then our mind begins to only see things that confirm this belief. Bulimia and Anorexia are perfect examples of outcomes from a belief such as the example.

Another example of this is a client who came to our clinic with a belief that she was unattractive. She therefore acted as though she was unattractive. While intelligent, she only went for jobs that she believed were occupied by 'trailer-trash' (her words not mine). While handsome men asked her out on dates, she only went out with men that were unattractive, not consciously, though unconsciously her belief created the outcome. She consciously believed that the attractive men were joking with her. Believing she was unattractive also had her acting unattractively. In 2 sessions we helped her to change her belief after 5 sessions she grew confident enough to divorce her husband who was beating her and she went on an overseas trip on her own. She is now dating attractive men with confidence. Her initial belief was developed at around the age of 6 or 7 when she recalled her father telling her Mother she was ugly. She was also told she looked more like her Mother and therefore believed she was ugly too. Her Father left her Mother which deepened the emotions around the belief.

The Imprint Period

From the day we are born and up until the age of seven, we're like sponges, absorbing everything around us and accepting much of it as true, especially when it comes from our parents. The confusion and blind belief of this period can also lead to the early formation of trauma and other deep neurological problems.
The critical thing here is to learn a sense of right and wrong, good and bad. Here we will often use our feelings or monitor the responses of our parents to determine what is good or bad.

The imprint period is the window of development in which children are all ears. They listen. They see everything and certainly feel the emotion coming from those around them. This is often simply equated to 'Anger' equals 'Bad' and 'Laughter' equals 'Good'. Young children want to know what Mom and Dad think in order to know what they themselves think. Like little ducks, they are eager to line up behind Mum or Dad — accepting without much question of values and beliefs. We must be diligent during this window of opportunity because it passes quickly.
What and how we teach during the imprint period should align with the bent of young children. They love games, stories, songs, memorization and other activities that can be used as powerful tools in the process of teaching them good beliefs and values. 

The most crucial period being from age 2 to 4 when major imprinting occurs. During this period we absorb information without any analysis. So if during this period the child is told they are "bad", they may take this literally without putting it into context. Thus they may think they are a bad person, without taking into account that what was really meant was that their behavior had been deemed bad by a person. Phobias tend to have origins within this period, generally from the years of 3 to 7. (Further events generally just reinforce the original traumatizing event)

The Modeling Period

Between the ages of eight and thirteen, we copy people, that is we 'Model' them. We mostly model our parents, but also other people and particularly people we admire or look up to. Rather than blind acceptance, we are trying on things like suit of clothes, to see how they feel.

We may be impressed with religion or our teachers. You may remember being particularly influenced by Primary School teachers who seemed so knowledgeable,maybe even more so than your parents.
This is when we begin to notice the behavior of friends, family and heroes. The age of ten being highly significant is often when we begin to emulate our heroes. The environment around the person has a powerful effect upon them. It is often said that we become who we most admired at the age of ten.

The Socialization Period

Between 13 and 21, we are very largely influenced by our peers. Here we often form clusters or groups of like-minded or 'like-looking' groups of people. As we develop as individuals and look for ways to get away from the earlier programming, we naturally turn to people who seem more like us.
Other influences at these ages include the media, especially those parts which seem to resonate with our the values of our peer groups.

This is where we develop relationship and social values. After the age of 21 , core values do not change unless a significant emotional event occurs or effective coaching.Normal values change and grow over time.

Sunday, July 20, 2014

HOA rules

My HOA adopted new rules on house painting that I was unaware of as I live up North most of the year. I painted my house a color that many houses in the community have similar darker and lighter.
I was sent a violation advising me of the new rule that I would now have to pick one of their colors and then they would have to approve. Long story short, the only notice I got was the violation after the fact. What can I do about it?

Homeowner associations are usually run by poorly educated retired folks.  They are the "chosen ones" and are sure  the world is being populated by idiots who need rules.  As "directors" of an HOA, they are willing to provide the rules, often with little thought as to whether the rules they make are wise or even legal, and often with no thought as to how they will legally enforce
the regulations once they are in place. (Other than by sending a letter of violation)

There are several answers to your questions. I will try to be clear about them and let you pick the answer you like best. I should start by saying I am not a lawyer, and if you are being urged to repaint your brand new paint job, you will have real or potential financial damages and therefore may want to call a lawyer and ask him or her some questions regarding who should pay for you to make
your home a new color.

Color is absolutely subjective and unless you are in a bonafide Historical District, there are very few color schemes that are without some merit. When I lived in New Hampshire, the favorite house colors were tints of the primaries, here in Florida we start with pink and then experiment.

I assume the new paint color rule was effective some time ago but you did not know about it in time, so this is an honest mistake.  It is possible that the HOA made the rule effective immediately, which would give you wiggle room because they have to give all the members fair and realistic notice.
Apparently you were not given appropriate notice. What I mean is they can't honestly expect that people who are planning to paint their homes in the Fall have not already bought
the paint--so there needs to be a period of time between when the rule is passed and when the rule goes into effect, but during which the board must alert members of the the upcoming new regulation. Different HOA's alert their members in different ways, some by letter, some by
email, some by newsletter.  Some require that any exterior work be approved in advance by a committee. Some don't do anything.

I assume that while this home is not your year 'round legal residence, you would prefer to be a good neighbor, and not raise a stink. I am thinking of a person known to me who had a similar issue, and after being alerted to the color problem decided to change his colors to ones acceptable to the HOA, so painted the home one approved color and used a second approved color to paint polka dots all over the home. I was a good paint job and very tidy.  He also made his point, and made the board members the laughing stock of the neighborhood.

Then there is the financial side of this issue.  If there is only a small fine for breaking the rule, it could be worth paying the fine. (And keeping the color)

Nobody wants to get sued--particularly a retired volunteer board of directors of an HOA. That becomes very upsetting, I speak as a former HOA director. If your HOA has any funds in their treasury, you can sue them. That will get their attention.  Their effort to preserve the treasury,
might cause a quick settlement and make the whole thing go away.  Conversely, if the HOA does not have any money in the treasury they won't be able to make you do anything because they can't afford to sue you (when faced with the potential of losing).

My honest opinion is to have your new lawyer write a STRONG letter, suggesting that the HOA was derelict in sharing the information regarding the color rule, (which should have been shared with all the unit owners, any new owners, as well as all the local painters and paint stores.) and while you are anxious to be a good neighbor, you are not willing to repaint your home at this time--however the next time it needs paint you agree to choose one of the approved colors they like. Maybe that will make it go away, but if they are insistent, and not open to your plan, consider looking for satisfaction through the courts. 

Small claims court is limited to a $5,000 suit, but you can bring several counts, meaning you could sue them for $10,000 by making one suit for $5000 for demanding the color change, and perhaps $5000 more for not communicating with the HOA members in a timely fashion.
The judge will probably throw out one of these, but it should get you some action from the HOA

Good luck with all this.
Dane Hahn is a real estate professional serving the Suncoast of Florida from Sarasota Realty Associates. You can reach him at 941-681-0312, or by email at

Tuesday, July 15, 2014

Buyer Turn Offs

Buyer Turn Offs

As Realtors like to say, the three most important things in real estate are location, location and location. Normally buyers will have an idea about why they are looking in your location, but even so, your agent should have information on schools, distance to shopping and good accurate comments on the neighborhood.

First Impressions

The best way to see other people's first impressions of you house is with a camera. If you take photos of the front, the entry, the yard, and the rooms—and place them on a table under good light, you will see what strangers see. Residents are used to looking past problem areas, and simply don't see the or notice the “blemishes”. But photos don't lie.

Deal with every "negative" from the street to the front door and beyond. Fix the negative issues. Paint is your friend, paint the front door. Buyers will spend a few minutes waiting to get into the house as the Realtor fumbles with the keys. Do not have the potential buyer thinking negative thoughts before they even get in the front door. This is where you have your first chance to show off. Gardens and “road appeal” are what buyers see first on arrival. Sellers must realize that they are selling the the entire plot that the house stands on including the improvements and boundary walls between neighbors.

Overpricing your home

Pricing the property correctly at the beginning is crucial in order to attract the right buyer and to make the selling process as painless as possible. In Real Estate everything sells... BUT at the right price.

Homes listed at a higher price than the market recommended, will get some negative feedback from buyers. The worst feedback, of course, is silence. That could include no showings and no offers.

The problem with overpricing your home is that the buyers who are qualified to buy your home won't see it because they're shopping in a lower price range. The buyers who do it will quickly realize that there are other homes in the same price range that offer more value.


Smells can come from a number of sources - pets, lack of cleanliness, stale air, water damage, and much more. You may not even notice it, but your real estate agent may have hinted to you that something needs to be done.

There's not a buyer in the world that will buy a home that smells bad to them unless they're investors looking for a bargain. Even so, they'll get a forensic inspection to find out the source of the smells. If they find anything like undisclosed water damage, or pet urine under the "new" carpet, then they will either severely discount their offer or walk away. And don't forget about the pets in an around the home. NO ONE likes your dogs as much as you do. Get them out of there and clean up after them prior to anyone coming to see the home. Having them on a chain or in a dog pen is not sufficient if they are barkers. I had a city family come back for the 3rd visit to a country home in a ritzy horse community, and ask me what the terrible smell was in the neighborhood. When I told them it was the neighbors horses, they said they couldn't stand that smell. (And so we moved on to a different area).

As to "smells", nothing is worse than a house where cats have been kept and allowed to pee. If that is your house, no one will want it – period. While pet odors send buyers heading for the door, smoking odors stop them before they cross the threshold! Sellers have no idea how many tens of thousands of dollars smoking costs them in property value.


If your tables are full to the edges with photos, figurines, mail, and drinking glasses, buyers' attention is going to more focused on running the gauntlet of your living room without breaking any Hummels than in considering your home for purchase.

Too much furniture confuses the eye - it makes it really difficult for buyers to see the proportions of rooms. If they can't see what they need to know, they move on to the next home.

Deferred maintenance

Deferred maintenance is a polite euphemism for letting your home fall apart. Just like people age due to the effects of the sun, wind and gravity, so do structures like your home. Things wear out, break and weather, and it's your job as a homeowner to keep your home repaired. If there are signs of water damage/intrusion and mold/mildew, get them fixed.

Your buyers really want a home that's been well-maintained. They don't want to wonder what needs to fixed next or how much it will cost. All buyers should get a professional home inspection. There are way too many things that a professional home inspector should find that the typical buyer would not. To save around $400 and not get an inspection could cost you many thousands in repairs. A seller should want a buyer to have an inspection unless they are hiding something.

One suggestion is to have the seller do all inspection before he puts the house on the market. Then tell the buyer to base their purchase price on the inspection report. If they choose to do an inspection and find something my inspector has not we will discuss it.

Dated decor

The reason people are looking at your home instead of buying brand new is because of cost and location. They want your neighborhood, but that doesn't mean they want a dated-looking home. Just like they want a home in good repair, they want a home that looks updated, even if it's from a different era.

Harvest gold and avocado green from the seventies; soft blues and mauve from the eighties, jewel tones from the nineties, and onyx and pewter from the oughts are all colorways that can date your home. Textures like popcorn ceilings, shag or berber carpet, and wallpaper of all stripes. Think about an estate that has wallpaper on all walls, even bath, kitchen and hallway ceilings and buyers know they can't get anyone to remove it.

Working with a stager is often money well spent. Most buyers see a house in the internet first. A well staged property improves the online pictures and showing experience. They can redesign with what you have and/or bring in furnishings and decor. Stagers will sometime offer scent services or suggestions too. Lavender and vanilla are go-to scents. Vacant homes may benefit from being aired-out. The aroma of fresh baked cookies or a pie is an oldie but goodie.

Decor comments are driven by current market conditions. To sell in a tight market you need to standout but—for example--putting granite in and new flooring just to sell it. As markets change other buyers may be looking for deals and today some pretty tired properties are offered for very good money, because buyers don't have much to choose from and decor can be fixed, other things not.

The market is a brutal mirror. if you're guilty of not putting money into your home because you believe it's an investment and that others should pay you a profit, you're in for a rude awakening. You'll be stuck with an asset that isn't selling.

Dane Hahn is a Florida based real estate professional affiliated with Sarasota Realty Associates. Reach him at 941-681-0312 or by email at

Friday, July 11, 2014

Don't Give It Away!

I can't tell you how many times a client has said to me, “I want to sell, but I'm not going to give the house away. If it doesn't sell for the money I'm asking, I'll just cancel the listing and rent it.” When your current home no longer suits you, the most popular option is to sell and move on, but in some cases, turning the old home into a rental unit might make pretty good sense.

Among the factors to consider:

Your financial situation
Local market conditions for rental homes
Your future housing plans
Your tolerance for being a landlord
State and federal income taxes
Current and projected home prices

Renting a home is a job and it can become a full time job when you factor in collecting rents, repairing damage, attending to general wear and tear, pool and lawn maintenance, and stuff that breaks....most people have no idea what's involved. There are management firms who will do much of the heavy lifting, but their efforts are not free. When all is said and done, very few owners-turned-landlords manage a rental home over the long term.

Unless your plan is to amass a number of rentals, and leave them all to your kids—or sell them one at a time during retirement, you still have the old family home and will want to sell sooner or later...remember, the reason we're in this situation is the house didn't sell for the money you wanted--so you have to hope the market improves so you can actually sell at a later date.

Before you decide to rent the old home, determine if your financial situation can support hanging onto to the house. Sure, you own it now, so keeping it comes with known expenses, but you should talk to a financial professional who will go over your savings, your credit, and your equity in your existing home. This way you'll know if you have the money for a down payment on the new home you want without using the equity in your present home.

If you don't need all the equity in your home for your down payment, you might be able to take out a home equity loan or refinance into an investor loan and use the loan proceeds as your down payment, and still make your home a rental.

Of course, if you go this route, make sure the new house payment on the old house is still low enough that it can be covered by your renter, and then some. Here's a rule of thumb: take the actual value of the home in today's dollars, and multiply by .01. One percent of the value of the house should give you a monthly rental target. So a $200,000 house rental target should be $2,000/month. If the neighborhood you live in won't support that amount, then renting may not be a good plan. This formula may also demonstrate why homes that rent for $500 a month are such dumps.

If you have a mortgage payment to contend with and the home is in a marketplace that offers tough competition, you may be only be able to generate a profit of $200 to $400 per month on a property. The name of this game is cash flow, and obviously the more cash flow the better. Awesome cash flow properties don't grow on trees. It really is a personal decision on how high of returns are needed to justify spending a lot of cash on a rental property. Some people would be happy with 15 percent, 10 percent or even five percent returns on their investment.

If your goal is to buy a different home, one drawback with renting is obtaining a loan on the next house. Once you claim the property as an investment, lenders want to see two (2) years rental history for that property, including a Lease and separate Escrow account for the security. The income will not be credited as income to you so you will have to evidence ability to carry both mortgages.

But if your main goal is to hold onto the home as a family legacy or wait until it's value has grown to help pay for retirement, lower monthly cash flow might be OK - as long as you can cover your mortgage and monthly expenses. This might also be true if you are in an area where projected growth over the next several years is expected to positively impact home prices.

There are pluses in renting instead of selling. You can depreciate the building, and you might be able to get out of doing expensive renovations. If you were considering updates like a new kitchen to get your house ready to sell, you may be able to put them off and do only what is necessary to make the place clean and livable.

Depending on the rent you charge, tenants are willing to overlook outdated home fixtures because they're just short-term residents, not owning it. For years I owned rental homes near a state university, I rented to grad students generally, and they both paid the rent on time and didn't mind the worn kitchen floors and single bathroom off the kitchen.

Renters who offer up to three apartments in their home for rent fall into a protected category, but if you don't live there, you must obey equal housing opportunity laws.

Don't forget insurance. As a landlord you will pay more for insurance on a home you're renting out, despite the fact that you're not insuring the contents, only the structure. And remember to get credit checks on the potential tenants, these are people you'll be entrusting your home (and your own credit score) to.

If you use a rental management company ask them to help determine a rental price for you, and to find tenants (to comply with fair housing laws) and to manage the building once the renter is in place. Management companies will usually take a portion of each month's rent in exchange for handling the screening, rent collection, repairs and other day-to-day landlord management aspects. So be sure you can afford to have their services.

Dane Hahn is a real estate professional with Sarasota Realty Associates. He can be reached at or by phone at 941-681-0312.

Tuesday, July 1, 2014

Bite the Bullet with a CO

Has everyone noticed that the market has slowed a bit – some might call it a return to normal. And cash offers are less popular as more buyers try to get mortgages. And contingency offers are more common today than they have been during the past few years.

So what is a contingency offer? It's an offer to purchase property from a buyer who still has to sell his “other” house (or perhaps experience some other known contingency) in order to perform. I once had a contingency offer which stated that the buyer would go to closing as soon as he received a large insurance award—which did happen, although it took longer than we all thought.

There are many other types of contingencies, and in that sense just about every purchase offer is contingent. Some are contingent on the close of escrow on a property already sold. Most offers are contingent on the buyer receiving full loan approval. Most are also contingent on inspections yielding satisfactory results, or having the seller fix things that need to be fixed. Nonetheless, in the business, a contingency offer usually means one where the buyer has not yet sold his property.

There are many situations where it makes sense for a buyer to make such an offer and for the seller to entertain and perhaps accept a contingency offer. It certainly makes sense when the number of potential buyers is not large. This could be because of general market conditions, or it could be attributed to the fact that the property you want to sell has limited appeal, or maybe it is just in a price range out of reach to most. In any of those conditions it makes sense to try to work with the proverbial bird in hand.

Naturally there are many factors to take into consideration. A primary concern is the salability of the buyer's property. What I especially want to know is the contingency property's condition, location and whether it is priced right. If the property is local, usually I can get a good fix on this. If it is out of the area it may be necessary to get a BPO (broker's price opinion) froma knowledgeable broker in that locale. Agressive sale techniques like reducing the price every 2-3 weeks if a sale has not occurred may at least give the seller confidence.

I have been successful in asking for a larger deposit than usual with a contingency offer, and then converting the deposit to “Non-refundable” after a certain time period (say 2 months) has passed. The seller is more confident under these circumstances, and a buyer who is financially committed to the purchase is a most appealing buyer.

Sellers are usually adament that they don't want to lose potential market exposure while waiting for the buyer to try to sell his house. Some contracts allow for the seller to keep his property on the market, with the provision that, should he receive another acceptable offer, he will notify the the contingency buyer who then has a specified amount of time (usually 72 hours) to remove his contingency. Usually this means demonstrating that he, the contingency buyer, has the ability to close, in spite of his “desire” to have the aforementiond contingency.

Frequently this condition is characterized as a 72-hour kick-out clause. This clause allows the contingency buyer 3-days to, as it were, fish or cut bait.

Sellers or their agents have often been reluctant accept a contingency offer, because they felt that no other agent would show their property. Part of the reason for this concern was that the property would no longer be listed in "active" status in the multiple listing system (MLS), hence buyer's agents would not even see it when they did a computer search. In Florida's MLS system there is a "middle ground" known as a back-up status which means the property is still on the active market and the seller is soliciting further offers. Good agents who are looking for property will not ignore such listings, but will call the listing agent to find out what the situation is. Many would be willing to write a back-up offer, knowing of the contingency situation.

Needless to say, there are other factors to be considered when entertaining a contingency offer, but you get the drift. One thing is for certain, everything is negotiable and there can certainly be worse things for all parties than a contingency offer – think for a moment about no offer at all.

Dane Hahn is a real estate professional affiliated with Sarasota Realty Associates. He can be reached at 941-681-0312 or by email at

Sunday, June 1, 2014

New Law: (H.R. 2847) aka FATCA Starts July 1.

A new law will go into effect on July 1, this one—called FATCA--may cause all of us headaches at the very least, and has the potential to blow away whatever minor recovery we have been seeing, even causing the mortgage rates for buying a new home to skyrocket to 15%. FATCA was passed 4 years ago, but was passed with a delayed start date--it's slated to go into effect July 1. It's another one of those laws that Congress had to pass to find out what's in it, so we'll all learn about it together.
Stansbury Research, known as a rampant "Chicken Little" has released a white paper indicating that FATCA (also known as H.R. 2847) will lead to the collapse of the American financial system. While at first their "hair on fire" warnings seem pretty harsh, the more you read about this new law, the worse it seems.

The concept of FATCA is to catch Americans thought to be evading taxes by hiding their wealth in foreign bank accounts. The way FATCA does this is by requiring that all non-U.S. financial institutions pass along detailed information about American account holders, or potentially face steep penalties. Doesn't sound like it will affect you and me so far, does it.  And yet, read on.

Casting such a wide net is already producing unintended consequences. Banks around the world are suddenly rejecting Americans as clients or customers, because foreign banks don't want the reporting and bureaucratic hassles, plus the potential exposure to draconian IRS penalties.

One of the under-reported but major risks to the U.S. economy stemming from FATCA is the potential for wide-scale disinvestment from the United States by foreign institutions seeking to avoid the IRS, (related penalties, and huge compliance costs). The 30-percent FATCA "withholding tax' represents a powerful incentive to drive investors out of U.S. markets entirely. The implications for the stock market, bonds, the dollar, and more could be monumental.

There is currently more than $21 trillion of foreign capital invested in American assets and markets, with about $10 trillion of that in our stock market. That could change as FATCA enforcement begins later this year — possibly dramatically. As this money is withdrawn, and foreign institutions start fleeing U.S. markets, the economic damage would be massive — potentially apocalyptic, especially considering the massive U.S. trade deficits and America’s outsized reliance on foreign investment and outside credit just to function.

Stansbury's position is that the dollar has been the defacto international currency, but that kicking foreign investment out of the US will be the straw that breaks the camel's back. And at that point, the dollar will no longer have international standing. Further they believe that absent the right to print money to pay our bills, the dollar would rapidly devalue. You can decide if this is plausable, but if it on.

A rapid devaluation would collapse the stock market by an estimated 40%, and it would drive mortgage rates up to 15%. This would—Sansbury believes—lead to a 25% reduction in the American standard of living.

Multiple reports suggest that small and medium-sized (foreign) firms, unable to bear the compliance costs or the IRS's crippling withholding taxes, would be especially likely to ditch American markets. After all, there are plenty of promising new markets in which to invest.

Even if the decimation of our financial system is not probable,
FATCA has been the subject of a number of a number of criticisms which include allegations that the costs of implementing it may outstrip the additional revenues it will bring in, that it may prompt "capital flight" in the form of foreign financial institutions divesting themselves of U.S. assets, and that foreign relations may be strained by the U.S. requiring foreign governments to gather and report (at their own expense) information on U.S. Citizens. The full implementation of FATCA may, as some critics have maintained, ultimately prove more harmful to U.S. business interests and U.S. citizens than its benefits will merit.

Dane Hahn is a real estate professional at Sarasota Realty Associates, serving Sarasota and Charlotte Counties. You can reach him at 941-681-0312 or by email at

Monday, May 26, 2014

Quick, Get a Mortgage!

After a couple of years of cash buyers, of late I have had buyers who are trying to get financing and not having the kind of luck they hoped.  To be clear, the lenders, banks and mortgage companies, are not easy to work with these days. They are understandably gun-shy after the last 5 or 6 years, and really only a couple of them are even trying to originate new home mortgage loans.

Naturally, if you were trying to get a mortgage today, you would want to present yourself in the best possible light, but you have to be able to prove what you say. You’ll need to supply your last couple of years of tax returns, and you can be sure the lenders will scrutinize all the numbers there. And of course they also see your complete credit report, which includes not just the “score” that we all have grown to know—if not understand—but also big problems (in red) including foreclosures, or loans and debts that went unpaid and were written off or maybe were paid off, but were not recorded as having been paid off; and lesser problems like late payments, errors and misunderstandings and open but unused charge accounts (often from years ago).

Let me take this opportunity to remind you that if you are thinking in terms of looking at real estate in the near future, it’s time to get a copy of your credit report and review it for accuracy.  I personally had a chance to review my own credit report—this is some years back—and found a half dozen gas station credit cards (none that I had charged anything on for years) and on that same report I found several other credit cards that I had totally forgotten, ones which I had cut into pieces and thrown away, but which were still open and available for use. If you have 10 unused credit cards, and each one has a credit limit of $2500, the lender will dock your borrowing capability the amount you have permission to charge: $25,000 or demand that all the cards are closed out.

These phantom cards and charge accounts will sink your chances of getting a loan until they are corrected.  Here’s the worst part, you can’t just call the company and say. “Cancel my account.” Well, you can call and say that, but simply asking doesn’t get the data off your credit report. You’ll need to ask the credit card company to both remove your account from the credit report AND send along a letter to you indicating that you are in good standing with them and they are working on getting your data corrected with the credit agency. This can take months, so, again, if you are looking at real estate, get going on this effort.

I was recently told by a cooperating broker that her client (a potential buyer of one of the properties I represent) was having trouble with his lender because while he had a pre-qualification letter based on his “stated” income—his credit report had some anomalies and his tax returns did not show his income to be as high as he stated on his first conversation with the lender. He was working with Quicken Loans—an internet based lender—and with a loan originator whom he would never meet in person.  It seemed to me there was no fibbing in making the application, but when you report your salary and that of your wife and then a part-time job that might add another chunk to the total—these sources of income had better all appear on the tax return.

I am not a huge fan of the mega lenders.  They certainly have the money to advertise and that means we all know their names, but borrowing money is stressful and it helps to have a real person you know and trust as your originator. Also, the difference in costs is so small, remember they all get the money they lend from the same place, and the rates are regulated by the Federal Reserve.  So whether you go to Quicken or Bank of America or the Real Trusty Loan Company, the rates will likely all be within a half a percentage point. And most loans are written for a term of 30 years, but most of us only keep the home for about 5-7 years, and may refinance in the meantime—meaning the loan may only be in place for 3-5 years on average. What you are really looking for is service. So if you are in the market to buy real estate, interview some of the lenders you might consider using before you actually need the money, you’ll thank me later. Really. And you’re welcome.

Dane Hahn is a real estate professional serving the Suncoast of Florida from Sarasota Realty Associates.  Contact him at 941-681-0312 or by email at

Wednesday, May 14, 2014

Housing Affordability Crisis 2014

“Figures don’t lie”, was the first part of a phrase my business partner used to say, and then he would follow that by saying, “but liars sure figure.”  It’s the kind of country wisdom we used to throw around 20 years ago in New Hampshire. But I submit, given a few minutes and a paper and pencil, a good statistician can make any set of data support whatever side you are on.


And so I smile when I see on TV or read in the paper that there are no affordable homes in many towns across the USA. This story would be a call to arms, if it were true. The story goes on to say that many neighborhoods are simply too expensive, and something must be done! Usually this headline leads into a story that highlights two or three “expensive” neighborhoods, with tree lined streets and huge gated homes. The TV camera pauses on one or two for sale signs—and the newsreader shares just how critical the unaffordability of these homes are to America.


The thesis of the story is the lack of affordable housing. To be more specific, the story is about how low the US average income is, compared to how high the average sale price is. And that’s about where the story ends. You the viewer or reader are left knowing there is a crisis but that there is no solution. And then they go on to the next story.


But is there really a crisis? I say no. About 35% of Americans rent a place to live, and  65% are presently home owners. The housing crisis occurs when a would-be buyer can’t afford to buy the home they want in the neighborhood or area of their choice. In all my years in selling real estate, I have never had one client who wanted to pay more for a house than the seller was asking. Every buyer client I represented wanted to spend less than the asking price.


Every seller client wants “all the money”. I would suggest that 35% of my sellers have said to me at least once, “I’m not going to give it away.” Sellers tend to think Realtors are trying to get the price down to sell the house quickly. While it’s true the price of a resale house is often suggested by the Realtor, but “set” (contractually agreed to) by the seller. So the affordability problem is really with the seller.  Sellers don’t always ask the “right” price from day one.


Because it’s true that every house sells, sooner or later, I contend that every house is or becomes affordable. A house that sits on the market for months and months, sometimes for years without selling, is probably overpriced (you can call that one not affordable).  But once the seller agrees to make the needed modifications—and sometimes that’s only a price change—the house sells.


Experts, and by experts I mean lenders, think that you can afford about three times your annual earnings when you buy a home.  This is only a rule of thumb and does not take into consideration your credit scorer, credit history, or other debt you may have (like boat, motorcycle or school loans). But let’s say you want to buy a home for the family. If you earn $50,000, you can probably swing $150,000. 


All houses are not the same, to get the most house for your money, you must understand the variables.  Location affects price.  Even a tiny home on the beach will cost a pile of money. But if you pick a moderately priced area, you will find value as well as livability. Age of the house will affect price, and square footage will also be a factor.  The average resale home in Sarasota county sold this year for about $121 per square foot, but other areas sold from as low as $50 per square foot range. As a rule of thumb, new construction is running about $150 per square foot. So do some homework before you go out to see what’s for sale. Knowing what you want may save you the depression of concluding that nothing is affordable.


Statistics: Lemon Bay on average is only 1 foot deep.  But boats in the channel note that the average depth is over 6 feet. Likewise the average cost per square foot of a house does not mean you can’t find an acceptable affordable home. The data says on average, houses sell for $155,200 and cost $121 per square foot in this area. Meaning that the average house is 1,282 square feet. Does that mean you can’t find one for less, even a lot less? Not at all. 



Saturday, May 10, 2014

Underwriters: guys you love to hate.

Here’s another anecdotal story of why selling a house can be fun.  Let’s assume a buyer comes forward with an offer to buy a home.  Pretty soon the negotiating is completed and a contract is signed, sealed and delivered--and everybody begins to think the house is sold.
While the buyer is “moving forward” with inspections, picking out paint colors and planning where the furniture will be placed, there is more happening behind the scenes.  In a word, the agents say the loan has gone to underwriting.  Underwriting is the “heart” of the mortgage loan process. The underwriter is the individual employed by the lender to review all of the accumulated documents that the buyer has provided during the loan process.
Sometimes the underwriter will request that additional documents be provided during this step in order to verify whether the buyer will be a good risk for the investors. Once the underwriter reviews all the documents, he or she will decide whether to approve the loan.
If the loan officer has done a professional job up front and explained properly what documents needed to get your loan approved, the process should go very smoothly. And yet, if there have been any “fibs” or creative answers given to questions on the application, the underwriter will probably unearth these issues and slow down or stop the sale.
The underwriter will look at all sources of income, including, in most cases, a 2-year employment history, current pay stubs, W-2 statements, two years of tax returns, bank account statements, other assets and holdings, and additional sources of income. This is certainly one area where additional (unreported) income often surfaces. Buyers who get paid under the table will soon discover they are not able to claim illegal or unreported income.
Errors on a credit report will also rear their ugly heads during this process. Loans which were paid off (satisfied) but were never recorded (closed) will appear as a current loan, still due.  Bankruptcies will be obvious within the credit documentation; a personal bankruptcy will clear most debts—but it won’t clear IRS debt or student loans. Just because a person may have never paid anything toward your student loans doesn’t mean they don’t still owe the money. Bills that people tend to “forget” are old medical bills, which were written off by the doctor or hospital--but not the collection guys. These are the reasons to keep an eye on your own credit report.
If there are any vague or contradictory areas in the documents that were provided, the process will definitely stretch out as the underwriter does his or her research into the situation. Additionally, if the buyer is receiving or paying alimony or child support, documentation will be required to substantiate the payments or the income. Expect also to provide a copy of the purchase and sales contract and a copy of any checks you have already written as earnest money to the seller.
In order to assess your credit risk and current debt, the underwriter will carefully review the buyer’s credit report with current FICO scores and review the report for any issues. The underwriter also looks at the appraisal for the property to make certain the amount of the loan is commensurate with the property value.
Once the underwriter has all the documentation required they now go through the process of assuring that the total loan package will be accepted by an investor. Each investor has different guidelines that need to be considered when the underwriter begins this process. After this, the underwriter will be able to tell whether or not this loan fits the guidelines and whether it is approved.
If the underwriter needs clarification of income, debt, or additional information about the property in question, the buyer should be ready to track down any necessary documents quickly and hand them over for review. Depending on how many documents are needed to get the final approval, the underwriting process should not take more than a few days to complete. Buyers who are prepared to provide whatever is requested will make the underwriting process go more smoothly.
Dane Hahn is a real estate professional with Sarasota Realty Associates in Venice. Contact him at 941-681-0312 or by email at



Saturday, May 3, 2014

Smart (Nest-like)Thermostats

I found myself in the back aisles of Home Depot just the other day—where some of their more serious stuff is displayed, not the colorful paints and appliances that appeal to the “family”, nope, the inventory back here is more the realm of the obscure.  Here is where you will find hardware you’ve never seen before, tools that do who-knows-what and great quantities of various sized air filters stacked in tidy rows. Oh, and it’s also the home of the heating, cooling and thermostat department.

I was looking for a smart thermostat that would offer options. Options that would include temperature adjustment obviously, but also remember when we needed A/C and when we only needed dehumidification and could the unit remember how much electricity use all this was going to cost. Thermostats, it turns out, control half of your home’s energy. That’s more than appliances, lighting, TVs, computers and stereos combined.

The salesman who was assigned to this area was only a little older than my grandson, which I suppose made him an expert on these electronic controllers. I had read a bit about the “Nest” a special unit invented by some Apple engineers, and so I wondered if HD carried them. “We do,” the salesman said, “but they were all stolen last week. We had a full display one minute, and the next they were all gone.” Such is the retailer’s issue with any expensive product that can be concealed  in the palm of your hand.

He went on to say that more would be coming in shortly and I should consider them. The system is designed to keep your home cozy, and it learns from your use to remember the temperatures you like and switches to an energy-efficient setting when you’re away. Wi-Fi connectivity lets you make adjustments from your mobile phone, tablet or laptop.

According to the dot gov website, you can save as much as 10% a year on heating and cooling by simply turning your thermostat back 7°-10°F for 8 hours a day from its normal setting. You can do this automatically by using a programmable thermostat and scheduling the times you turn on the heating or air conditioning. As a result, the equipment doesn’t operate as much when you are asleep or not at home.  Programmable thermostats can store multiple daily settings (six or more temperature settings a day) that you can manually override without affecting the rest of the daily or weekly program.

But the proof of the pudding these days is the user rating, and so when I got home, I took a look at what the world is thinking.  Frankly, the world seems to like the old workhorse of the thermostat world, Honeywell. The highend Honeywell units have some unique features: each month they send you an email report about your energy usage. So you have the ability to make changes and then see how your changes are working.  Being able to program the AC to loaf all day and then cool the house before you get home is great feature.

Some people value simplicity and minimalism and the Nest is simple and sleek. The screen basically shows the temperature, there is little you can actually control from the wall. But when you adjust the temperature for a few days to the way you like it, you teach Nest what you want. After that Nest Sense learns about you and your home and starts activating features to save you more energy. The other programables like Honeywell ask you how you want the atmosphere in your home, and after you once set them up, that’s what you get. The Nest web site estimates I could save about $200 a year at my house, if I had their system. I suspect I could save something…but since I have an early model programmable now, maybe not quite that much. Still, energy use is a problem for all of us as the value of the dollar decreases (and so everything gets more expensive).

Dane Hahn is a real estate professional with Sarasota Realty Associates. You can reach him at 941-681-0312 or by email at 


Sunday, April 27, 2014

Foreclosure Assessments--WTF?

“How could I owe the association $10,000 in back assessments, I just bought the property at a foreclosure sale free and clear last week? Those fees are the responsibility of the prior owner, not me!”

It is no wonder that purchasers of foreclosure properties in Florida frequently have questions about whether they are liable for past due homeowners or condominium assessments after purchasing property at a foreclosure sale.

If you’re thinking that the next big “score” in your real estate portfolio might be a condo purchased at a foreclosure sale, call your lawyer before you sign on the dotted line.  After the initial excitement of the new purchase wears off, foreclosure purchasers are  frequently finding themselves the target of associations seeking to collect past due assessments owed by the previous homeowner.

Over the last half-dozen years, condos—many of which were only partially filled with owners or tenants—have not had the monthly income to cover their basic costs, ergo, there have been assessments to keep the buildings running.  And these assessments may or may not have been paid by the owners. When confronted with the scenario that old assessments may survive a foreclosure sale, new unit owners are often shocked at the notion that they could be responsible for the past due assessments.

Condominium association liens in Florida are governed by Sec. 718.116, Florida Statutes, whereas homeowners’ association liens are governed by Sec. 720.3085, Florida Statutes. Both statutes make the new owner “jointly and severally” liable for unpaid assessments.

The statutes specifically provide that:
A unit owner is jointly and severally liable with the previous owner for all unpaid assessments that came due up to the time of transfer of title.

Today’s Lesson:  The purchaser of a foreclosure is treated exactly the same as the prior owner and is equally responsible for the past due assessments.

All this may seem unfair to the new owner, but the law is clearly designed to assist association budget shortfalls. Further, while the law gives the new owner to the right to sue the prior owner for the recovery of any money spent paying off the old assessments, it is rarely a good idea to take advantage of such a right given that the prior owner is usually penniless and judgment proof.

And if you understood that the new owner only has to pay up to 12 months of back assessments, well, given Florida’s ever-changing foreclosure law, there is legitimate confusion about this issue. That 12-month rule only applies when the mortgage holder – i.e. the Bank – takes title to the property in a foreclosure sale, it does not apply to third-party purchasers who purchase properties at foreclosure sales.

New property owners wanting to reduce their obligations to the association by as much as possible, should be working with an experienced real estate lawyer who understands which assessments are valid and which assessments, fees or fines can be negotiated down is always the best bet.

Dane Hahn is a real estate professional serving Sarasota and Charlotte Counties from bhis office at Sarasota Realty Associates in Venice.  You can reach him at 941-681-0312, or by email at


Sunday, April 20, 2014

Keep the House Sold

Old time Realtors always say in order to get a house sold there are seven sales (or steps) that have to be made--before the seller gets his money.  (Or why selling real estate is so much fun...)

  1. First of all, the owner needs to “sell” the house to his or her Realtor. Mostly this sale is an introduction to the house with a walk-through but is important because if the Realtor isn't sold, how can she or he represent the home in such a way that a potential buyer will see the value in the property? The seller has the responsibility to tell the listing agent the highpoints and also any the problems with the home, so the listing will be accurate.

  2. Then the Realtor needs to collect the data that relates to the home including the tax cards, deeds, and disclosures so he can “sell” the house and all of it's wrinkles to the marketing department. The marketing department may be a real department or it may be the office secretary or even the classified department at the local newspaper, it doesn't matter, but the sale needs to be made again before it is offered to the public...

  3. Next comes the internet advertising, there are many links and sites that need to have the data uploaded, The MLS material, which at first is mostly data, still needs to include good quality photos and a clear write-up. Because most buyers start out their search on the internet, this material really needs to tell about the house and sell the property. The say a picture is worth 1000 words, so the photos chosen need to tell all about the house and sell its benefits.

  4. Now the area Realtors need to be told about the property. It's key to get them involved in the process right away, and to sell them on why this property is worth their client's time and money. They need to know why to show the property to their clients, how to find the property and how to get inside.

  5. We reach out to buyers by advertising, by internet, by signs and by the buyers Realtors, because in order to make a sale, the buyer has to be told about the house, shown photos and come in person to actually see the property. This is the step that most folks think is the only one in the selling process—but it's not. Buyers must be sold over and over—and kept sold.

  6. We're not done yet. There's still the home inspection, this is an important step because it's one of the last opportunites for the buyer to back out, so we are trying to keep the sale in place--the inspection is really an opportunity to sell the “deal” to the home inspector. If the inspector is satisfied and gives the condition of the house his approval, the deal moves forward.

  7. And then there's the bank or lending company. Not everyone uses a bank, so this step may be skirted if the buyer has cash, but if there's a loan the bank has to approve the condition and price. Bankers generally don't come to see the house, they read the material the Realtors create and in order to make the loan, they will hire another set of eyes—known as an appraiser. Here's a dis-interested third party whose role is to see the house and simply determine if it is worth the money. The appraiser will look at the MLS listing, the tax cards, the neighborhood, and with good math skills and a tiny bit of black magic added in, make his determination.

    Appraisers are usually willing to review additional data, sales figures for similar homes, etc, so smart Realtors may provide all the material they used to set the price in the first place--even the appraiser needs to be sold in order to “green light” the transaction.
So there you have it, seven sales to get to one closing, but that's the goal when someone calls and says, “I'd like to sell my house—can you help...”

Dane Hahn is a real estate professional serving Sarasota and Charlotte Counties from Sarasota Realty Associates in Venice, he can be reached at, or by phone at 941-681-0312. See him on the web at