When John Engelhart’s father bought a two-bedroom summer home in 1959, his intentions were to keep the Delray Beach house in the family for generations.

The Engelharts divided their time between Michigan and South Florida. After his parents died in the 1980s, Engelhart, his wife and four children carried on the tradition, spending summers in South Florida.

But Engelhart, a retired businessman and World War II veteran, said he can no longer afford the tax bill on the 1,500-square-foot waterfront house his father purchased for $43,200. It is now valued at $885,607. The 2006 property tax bill: $19,647.

“As a businessman, you got to face the reality,” said Engelhart, 81.

He said he’s staying put for a year, hoping that state legislators will find a solution to the state’s property tax crisis that is fair to all property owners. But he’s preparing for the worst and he’s already selling his boat.

Engelhart is one of many South Florida residents who responded when the South Florida Sun-Sentinel asked readers to tell us how they are coping with high property tax bills.

Some, like Engelhart, are thinking about selling their properties, which have become a financial burden because of rising taxes. Others are full-time Florida mortgage holders who feel stuck in their homes because they can’t afford to give up their current tax breaks to buy homes with higher taxes.

Owners who live full-time in Florida can take advantage of a 3 percent limit on annual property tax increases as long as they keep the same home. It is not available to snowbirds or absentee owners.

In an attempt to end inequities in the current tax system, legislators are considering a range of options during their current session. Among them: increasing sales taxes and reducing or possibly abolishing property taxes altogether; and offering tax breaks for first-time home buyers, Floridians who want to move, snowbirds and small-business owners.

But as legislators debate these issues, local residents - landlords, renters, homeowners - worry about the future at a time when living in the South Florida housing market has become more costly because of rising hurricane insurance premiums, taxes and other costs.

Robert Guthrie, 37, said he exchanged his BMW for a Toyota more economical car and halted plans to start remodeling projects on his two-bedroom home in Oakland Park after he was told his tax bill this year would rise, on top of increases he faced in property insurance and other costs. Guthrie and his partner, Thomas Williamson, bought the 1,200-square-foot home for $216,000 four years ago. His tax bill for 2006 was $5,779.

Guthrie said his neighbor, who lives in an identical home, pays $2,960. Her bill dropped $80 this year.

“We’ve talked about selling but where are we going to find anything affordable around here?” said Guthrie, a Florida mortgage loan consultant. “We are stuck.”

Ruth Cohen, 78, said keeping a second home in Florida has become a financial burden for a snowbird like her. So Cohen, a retired teacher who lives on a pension, Social Security and savings, is selling her two-bedroom villa in Delray Beach. She plans to rent when she makes her annual trip to Florida from New York. The change will provide more disposable income that she can use to travel.

“I’m a practical person and when I added up everything [property taxes, insurance and maintenance] it is costing me about $15,000 to live here for four months,” Cohen said. “I realized that this situation is unaffordable and I had to make a life decision.”

This is exactly what Mario Becerra, of Boca Raton, said he fears: that he would have no option but to sell his properties because he won’t be able to afford the increasing tax bill. “I fix everything on my properties because I can’t afford to hire a handyman,” said Becerra, 38.

Becerra and his wife Linda, 52, own three properties - a condo and a home that they rent for income and a condo that is their primary home - with a combined property tax bill of $12,872 last year.

They said they had to increase rents on their tenants to make a small profit. But they worry that next year will be worse for them.

“What is the benefit of owning a property if I have to pay so much on property taxes?” Mario Becerra asked.

SOURCE: The Sun-Sentinel

In the midst of showing a house for sale, real estate agent Debbie Frucci got an unexpected visit - from a police officer.

The problem: her open-house signs. Placed in the public right of way, the signs violated Winter Springs city rules. So the signs came down, and the open house got shut down.

“There was no sense in doing it if people didn’t know where to go,” Frucci said.

Open houses have become increasingly important in the softening Orlando housing market. Roadside signs can play a critical role in luring prospective buyers.

But most of the signs, whether those placed by real estate agents, new-home builders or homeowners, are there illegally — and local governments are cracking down. A coordinated, statewide sweep six months ago collected more than 7,000 signs in just Orange and Seminole counties.

The move worries the Orlando Regional Realtor Association, which has formed a task force to tackle the issue. It also is in talks with the Home Builders Association of Metro Orlando, which is “real interested” in possible changes, said Randy Martin, the Realtor group’s president.

By this summer, the Realtor group hopes to propose a new set of sign rules to government officials in Orange and Seminole counties that would go easier on home sellers.

Daytona Beach’s Realtor organization also has begun studying sign ordinances and is considering asking local government for changes in order to lure in Florida mortgage seekers.

Times have changed
When some local governments first started getting tougher, the Florida housing market was sizzling, so promoting open houses or new-home communities wasn’t considered as important.

“A lot of our members weren’t having to do open houses, the market was so hot,” said Frankie Elliott, vice president of government affairs for the Realtor association.

But things have changed. A little more than a year ago, it took about a month on average to sell an existing home in the Orlando area. Now, the average is three months, and there’s more than a year of inventory on the market, according to association data.

“Now, you’re having to go back to the way the old market was . . .” Elliott said. “You don’t want to spend four hours sitting in a house and have no one come by because your signs have been taken.”

Even real estate veteran E. Everette Huskey found himself with virtually no customers at an open house when his sign advertising the event got removed from along Wekiva Springs Road.

“They’re hurting the Realtors,” he said. “They’re hurting the homeowner.”

Still, people hate the clutter of signs along roadways and on utility poles - often called “snipe” or “bandit” signs - that advertise not only open houses but tree-trimming, handyman and even dating services.

“As the types of business out there change and evolve, it seems like the cheapest way most of them want to advertise is by trashing up the rights of way,” said Mike Rhodes, code-enforcement manager for Orlando.

SOURCE: The Orlando Sentinel

The National Association of Realtors Chief Economist, David Lereah, often speaks of housing market and home mortgage trends on a nationwide scale.

It’s ironic, then, that the title and content of his latest book, All Real Estate Is Local, highlight the drastic differences between Florida mortgage costs, for example, and those in middle America.

The general theme of the real estate expert’s work is that for a variety of reasons, home prices have soared in places such as California like Florida, while languishing in many more markets, such as the Midwest.

As we well know, residents of the Sunshine State pay handsomely for Florida mortgages - if they can qualify for them at all - while homeownership costs elsewhere in the U.S. are 50 percent less or even cheaper.

Below are a few excerpts from Lereah’s book…

On regional price fluctuations: “As of this writing, the median price of a home in San Francisco was over $750,000, while the median price of a home in Decatur, Ill., was almost $90,000 … Some regions, cities, and towns experienced great property-value appreciation during the 2001-2005 real estate boom, while others were left untouched.”

On the Miami housing market bust: “Because Miami has to work out its excess inventories, investing in properties in 2006 and the early part of 2007 may not be prudent. But I would not bet against Miami property values for the longer term.”

On fears of global warming and rising sea levels: “Look for some intra-metro migration — households moving within their own metro area or local real estate market, from oceanfront or ocean-view properties to properties that are several miles away from the water.”

Of course, Lereah and his always-optimistic predictions have met their share of detractors. His warnings of the widespread decline of the South Florida housing market and the Florida mortgage lender woes we’ve seen grow en masse this year were scarce, if they existed at all.

The David Lereah Watch, as a matter of fact, is a blog devoted to his often overly-optimistic quotes and observations. It’s worth checking out.

SOURCE: Palm Beach Post

Condo buyers are getting a warm welcome these days with 2,246 condos actively listed for sale in the Manatee County housing market.

A caveat might be: If you’re selling Florida condos, you’d better have them competitively priced or they won’t sell, according to developers and real estate sales agents.

“Builders are putting the brakes on, not pushing forward with more to be built, working hard to get rid of their inventory,” said Patrick McGuire, sales manager and broker associate at Buccaneer Realty, based in Bradenton. “Some are not willing to do new contracts until they’ve sold all those in the pipeline.”

Some are offering hefty incentives, such as larger commissions for sales agents, decreased interest rates for buyers and even closing costs thrown in, he said.

But whether condos are selling or not also depends on the project.

“It’s really location-specific. There’s some complexes that seem to be doing well, others seem to be somewhat stagnant,” McGuire explained.

At Palma Sola Bay Club, developer Evelyn Treworgy said sales are “looking very promising.” Her firm has sold three or four over the last five weeks or so. The 201 units, which sell for $429,000 and up, are set to go up at 3400 75th St. W.

“We’re really happy with our price points and our product,” Treworgy said.

Although potential Florida mortgage borrowers are not looking in droves, the ones that do turn up are highly-qualified people who have done their homework, she said. “We’re looking for an incredible April,” she added.

Conversely, a Florida home loan broker who sells waterfront condos and single- family homes on Anna Maria Island and Longboat Key was unenthused Monday about the market.

“All of the listings are coming down in price. They’re not even moving even though they’re coming down,” said Phillip Saadi, a broker for First in Real Estate, based in New Tampa. “Why? I don’t know.”

The 2,246 condos actively listed for sale in Manatee County represent a dollar volume of $806 million based on numbers McGuire pulled from the Manatee Association of Realtors’ Multiple Listing Service.

The average number of days a condo remained on the market was 131 days, with the median price at $258,150, he said. The least expensive condo was selling for $49,500 and the most expensive was listed at $3.49 million, McGuire said.

One of the more high-profile condo projects in Bradenton is the Riverpark Grande Condominiums, 309 10th St. W. The project involves 40 units, part of a $15 million renovation of the historic 1920s-era former Riverpark Hotel.

A sales launch event March 8 drew more than 200 brokers and Realtors, according to Valentina Pippen,  broker associate of Sky Sotheby’s International Realty.

“They’re very excited about the project, it’s really a one-of-a-kind,” she said. However, because the developer is still putting together the finishing details, she has not yet begun to sell any of the condos, she said.

“It’s up to the developer,” Pippen said. “I imagine it will be the beginning part of April.”

SOURCE: The Bradenton Herald

You’ve picked out the perfect home and Florida mortgage product? Congratulations!

But you aren’t done yet. Let’s talk about the most effective way to negotiate that contract and those closing costs in order to save the most money …

The Real Estate Deal on Your Terms
Finalizing closing costs in any real estate deal is tricky. It’s like playing the end-game in chess. But once you know how to move your pieces, you can negotiate with confidence and strike a deal that makes sense for you.

As a general rule, buyers and sellers (or their negotiating agents) meet to resolve percentages in the payment of closing costs from the time of the initial offer. This process can go back and forth, depending on the buyer’s financing, the condition of the seller’s property after inspections, and broker fees.

For parties selling the house, closing costs may not be critical if the buyer has met or surpassed the asking price. But if a seller believes he already carries too much of the burden, it may be worthwhile to enter closing-cost negotiations with resolve. On the buyer’s side, the heavy cash layout that comes with finalizing a home purchase may jeopardize their ability to purchase the house. Although it feels like both parties are playing roulette, it pays to explore all the options in closing costs and contracts before someone walks away unhappy.

Often people leave it up to their respective Realtors or Florida real estate agents to negotiate the terms.

For the home seller, typical closing costs may include transfer and property taxes, deed stamps, title insurance, and a broker’s commission. The seller may also be asked to pay 2-3% of the total cost of the home to cover the mortgage fee.

Buyers usually hope to pass along attorney fees, inspection fees, title search fees, and title insurance fees. The seller is frequently asked to pay for repairs on the property before closing, or the repair is deducted from the selling price.

An Unprepared Buyer Runs Scared
Buyers should expect to pay their share of the closing costs. Within three days of applying for a loan, mortgage lenders are required to give buyers a Good Faith Estimate (GFE). The GFE, mandated by the Federal Real Estate Settlement Procedures Act, stipulates all fees the buyer must pay within 30 to 60 days of closing.

Buyers also may share the home seller’s responsibility in paying the notary fees, mortgage insurance, appraisals, and inspections. There are also assumption fees for taking over a Florida mortgage loan.

Other immediate outlays for the homebuyer include escrow costs, city or county property taxes, attorney fees, recording and survey fees, and hazard insurance required by the lender. A Bankrate.com national survey of closing costs on a $125,000 loan in 2001 estimated national average closing costs of $4,651.

This can include an additional two months of up-front mortgage payments at closing. The down payment can be considerable, but it may also be negotiable.

Getting to the Bottom Line
From the initial offer by the buyer, exchanges continue over the closing costs. The buyer may also counter in the exchange asking the seller for points. These may be critical in closing the deal. A point has nothing to do with the asking price. It is one percent of the buyer’s total loan.

For example, if the buyer cannot afford the entire Florida home loan, the seller may negotiate, agreeing to finance up to one percent, thereby dropping the buyer’s overall rate.

At this point, both parties should ask themselves how much they really want to concede in order to complete the deal. Be firm, but nice. There are plenty of buyers and sellers out there.

SOURCE: Guide to Realty

The Florida real estate market as a whole has, for many years, influenced the sale of property in Hendersonville, N.C., writes Jim Wooldridge in the Homes section of the Hendersonville Times.

Many locals own winter homes in the Sunshine State and many Henderson County residents are those who moved from a northern state to Florida, found it too hot, and moved half way back. Some of the largest home builders in North Carolina started in the southernmost state.

Today, many parts of Florida are feeling seriously depressed real estate values, in some cases more than 30 percent.

The effect on Hendersonville is a slowing of sales because would-be buyers here must first sell their homes in the Florida housing market.

A personal view of the situation in the Sunshine State was given last week by a long-time builder and real estate investor, John Pierce, who bought a home in Hendersonville last year.

“Hendersonville attracted my wife and me with its special ambiance. We have property in Florida, California and Michigan and we this is different. You don’t have the big speculators and the huge developments here,” he said.

“Florida has a tough situation, mainly because of large inventory of homes built during the recent boom years and very high insurance costs that came after the hurricanes.”

Most home buyers expect their insurance costs to be part of their monthly Florida mortgage payment, and when these costs jump 200 percent, it makes the monthly payment beyond the reach of many buyers.

Florida’s legislature has passed a plan that makes the state government the financial backup for property insurance companies, allowing them to reduce premiums. Starting in June, premiums are scheduled to drop 22-39 percent. Another hurricane-free year would allow more reductions.

The excess inventory of housing may be a more difficult problem. The Florida housing market market started heating up in 1999-2004, when average home prices were moving up 15-17 percent a year. This is a fast rate, but one which was fed by a steady demand.

Starting in 2004, the increase jumped to nearly 90 percent within about 18 months, he said, as speculators bought up condos and homes by the handful.

In Lee and Collier County, there are houses that were partially completed but abandoned by builders nervous about being paid.

The real solution is a stronger market, which will require a significant reduction of homes for sale or a sudden surge in demand for Florida home loan financing.

Follow the link to continue reading in the Hendersonville News …

Florida mortgage rates moved slightly or not at all in the past week as conflicting signals continue to permeate regarding the housing market.

The benchmark Florida home loan - the 30-year fixed-rate mortgage - didn’t change at all over the past week, according to a Freddie Mac survey.

The loan remained at 6.16 percent for the week ending March 29, while the 30-year Florida mortgage averaged 6.35 percent a year ago.

“Despite concerns about possible spillover from the subprime market, rates on 30-year fixed-rate mortgages remained stable,” said Frank Nothaft, Freddie Mac V.P. and chief economist.

Meanwhile, data on both existing and new home sales continued to send mixed signals regarding the Florida housing market’s future.

“The rise in existing home sales in February to a 6.69 million unit pace, the highest level since last April… In contrast, February’s new home sales fell, unexpectedly, to the slowest pace since 2000. That suggests more time before a housing recovery,” Nothaft said.

Over the past week, 15-year fixed mortgage rates averaged 5.86 percent, a decline from last week’s 5.90 percent and from an even 6 percent one year ago.

Five-year Treasury-indexed hybrid adjustable-rate Florida mortgages averaged 5.88 percent, down from last week’s 5.91 percent and 6.02 percent last year.

One-year Treasury-indexed ARMs averaged 5.43 percent, up from last week’s 5.40 percent, and down from 5.51 percent a year ago.

To obtain the rates listed above, a Florida mortgage lender required, on average, the payment of 0.4 points on 15- and 30-year mortgages.

The 5-year ARM required the up-front payment of an average of 0.5 points and the 1-year ARM required an average of 0.6 points.

Florida home mortgage loan application volume decreased 0.2 percent during the week of March 23, but is up about 17 percent compared to 2006.

SOURCE: MarketWatch

Federal Reserve Chairman Ben Bernanke does expect the escalating problems in the Florida mortgage business to spread to the rest of the economy, but noted that the Fed has given itself “flexibility” to adjust interest rates should the outlook change going forward.

Inflation is still the predominant concern, and the economy doesn’t appear to be in danger of slowing too much, but regulators remain watchful.

Analysts say the Fed appears on track to keep its key short-term interest rate - which greatly impact mortgage rates - relatively steady, but many investors appeared to read Bernanke’s comments as a sign that a rate drop is unlikely to happen soon.

Testifying before the Senate Joint Economic Committee, Bernanke offered a window into the Fed’s thinking, saying that doubts about the economy have prompted the U.S. central bank to leave itself wiggle room.

“We are looking for a bit more flexibility, given the uncertainties that we are facing and the risks that are occurring on both sides of our outlook,” he said. “Those uncertainties have increased somewhat in recent weeks.”

He was careful to hedge his remarks with a firm reiteration of the Fed’s inclination to raise federal funds interest rates, not lower them, given a high rate of inflation.

The hearing also allowed the Fed to wade deeper into the discussion of the rising number of bad credit Florida mortgage defaults among risky borrowers - those who receive loans aimed at people with suspect credit.

Bernanke’s answer, in short, was probably not.

In recent months, numerous bad credit mortgage providers have reported big financial problems. As defaults rise, many Florida mortgage company struggles have been reported in the papers, with more than a few forced to go out of business.

Many economists have expressed concerns that mortgage market problems may exacerbate a slump in the housing market and, in turn, stall the economy. But Bernanke said that is unlikely to happen.

“The impact on the broader economy and financial markets of the problems in the subprime mortgage market seems likely to be contained,” he said.

Bernanke also said that he believed “it’s worth looking at” the possibility of Congress giving the Fed authority to enforce regulations on both lenders and mortgage brokers who are not part of banking institutions.

SOURCE: International Herald Tribune

After weeks of berating city and county officials for abusing property tax dollars, Florida lawmakers began drawing fire for budget proposals that demand a record level of homeowners’ taxes to pay for public schools.

According to the Orlando Sentinel, dueling $70-billion-plus budget plans advancing in the House and Senate both increase public school dollars by $1.2 billion.

But a remarkable 45 percent of the new cash - $545 million - would come from local property taxes, even as lawmakers continue to put heat on city and county spending habits they say are not helping, but rather worsening the burden of property taxes on homeowners.

Local officials quickly struck back, condemning the Legislature’s approach as hypocritical.

“This would have been the easiest and quickest way to provide property tax relief for homeowners,” said Susan Latvala, president of the Florida Association of Counties and a Pinellas County commissioner.

The House and Senate spending plans would force homeowners to steer an unprecedented $7.9 billion toward public schools - more than double the contribution demanded of local property owners only nine years ago.

Budget writers say a stalled Florida housing market has contributed to a nearly $1 billion drop in anticipated tax dollars this year and next. In turn, lawmakers are forced to lean more on the same homeowners they’ve vowed to help through an overhaul of the property tax system.

As Florida mortgage costs have risen beyond the reach of many prospective and current homeowners, real estate taxes have become yet another thorn in their collective side. The Senate’s budget plan was approved by a series of appropriations committees Wednesday.

Then there’s the matter of insurance, which on top of taxes and Florida mortgage loan payments can be the last straw for many homeowners. The Florida House proposal is scheduled to go Friday before its Policy and Budget Council, with floor votes in both chambers to follow next month.

SOURCE: Orlando Sentinel

Each of the three major credit bureaus - Equifax, Experian and TransUnion - collects data from your lenders about your history of borrowing and paying back credit.

But how does this actually affect your Florida mortgage application? What sort of rates can you look forward to based on these scores? Let’s investigate further … 

The aforementioned companies compile that information into your credit report, which any lender can access whenever you apply for a Florida home loan. The Fair Isaac Corp. is the major producer of credit scores. It takes the information from those credit reports, applies its own trade-secret formula and, based on the three credit reports, distill three credit scores for you into one score ranging from 300 to 850.

Meanwhile, a new credit scoring system has been developed by the three major credit bureaus - the VantageScore. Their VantageScore reports are available for $5.95 each, a fraction of the cost of the FICO score. However, the scores are not a direct substitute for each other and mortgage lenders continue to look at FICO scores when reviewing mortgage applications, so they are the scores a Florida mortgage borrower should buy.

Borrowers with high FICO scores - the top tier ranges between 760 and 850 - can expect lenders to offer them lower interest rates and more loan choices. Scores of 620 or lower usually place a borrower in the “subprime” category, and they can expect to be quoted significantly higher interest rates and may be offered fewer varieties of loans. A FICO score of about 500-520 is generally the minimum that will qualify for a Florida mortgage.

Fair Isaac’s consumer website offers a chart that is updated regularly and shows how your FICO score can affect your interest rate.

For example, here’s what a borrower could have expected to be charged in Florida mortgage rates for a $300,000 30-year fixed rate mortgage, based on his credit score, according to March 2007 interest rates:

Such variations in interest rate can add hundreds of dollars to your monthly payment and can make a big difference in the amount of debt for which you can be qualified. Contact our brokers today to see how you can lock in the lowest rates.SOURCE: Bankrate.com