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 dane.hahn@gmail.com

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

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 3^rd 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.

Clutter

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 dane.hahn@gmail.com

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 dane.hahn@gmail.com or by phone at 941-681-0312.

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 dane.hahn@gmail.com