A public tax assessor gives the assessed value for a property. This assessment typically occurs yearly for taxation purposes. The fair market value is an agreed-upon price between a willing buyer and seller. There is usually a difference between the assessed value and market value. For homeowners, the assessed value is a double-edged sword. Because, if their annual assessed value increased then their yearly taxes will also be raised.
On the flip side, when selling a house it can help boost its market value. To get a market value, Individuals can purchase an appraisal on their own or hire a real estate agent to perform a comparative market analysis. You may want to do this if you’re thinking about selling and want to know how much to list the property for, or have your eye on a home for sale and are curious if it’s a fair price.
As a homeowner, there are many reasons to know your market value. For example, if you bought a home several years ago and the value increased, you have more home equity. You can leverage this to qualify for refinancing or secure a home equity loan.
When it comes to assessed value, you might wonder what happens if you live in an area where the housing market is hot and homes are selling for far more than they’re worth. After all, that’s not exactly fair to homeowners who don’t want to sell and are stuck with the rising tax bill. The good news is that many states and municipalities have laws in place to prevent property taxes from jumping along with inflated property values.
As always, I am here to help you figure out the best value for your home in this market or if you have any questions feel free to reach out. Gary Cardillo 941.676.1008
Source: Forbes
A Summer Full of Surprises
Housing Market Update: Real Estate Chess Match
For years now we’ve been advised by real estate attorneys to use the FAR BAR AS IS purchase contract with right to inspect. The reason for this is that while it does protect the buyer, it takes some of the ambiguity out in determining if an item in the home is functioning as intended. To give you an example of why this has been the contract of choice, several years ago we had a client looking to purchase a condominium that had been renovated due to damages stemming from Chinese drywall. During the home inspection we found the granite counter top in the kitchen had been cracked in half around the sink during installation. The seller epoxied the seams, but the buyers were not pleased, as while the seam was cleverly joined with the epoxy, the joint was still very rough to the touch. The seller said he wasn’t going to replace the counter top and the buyer didn’t want to take it “as is,” so the buyer used their right during the inspection period to cancel the contract and get a full refund of their deposit. When speaking with the law firm who suggested we use this purchase agreement, the attorney stated, “this is why we tell you to use this purchase agreement as while the buyer wasn’t pleased with the look of the repaired granite, it was still functioning as intended as it was supporting weight and wasn’t leaking, thus it was performing as designed. If your buyer hadn’t used this “AS IS” contract that we have suggested, they wouldn’t have had the ability to cancel their contract and receive a full refund of their deposit.”
However, during this market this “AS IS” contract is being used in a manner that wasn’t originally intended. Since homes have been selling at such a frantic pace, many buyers who are out of town are using this contract to purchase properties sight unseen, or only seen virtually. Then once they arrive they use their inspection period to determine if they want to continue moving forward with the purchase of the property or cancel the contract now that they are viewing the property in person. Some buyers have even submitted contracts on several properties, had them accepted, and then used their inspection period to cancel off those properties that didn’t appeal to them and keep the one that does.
To counter this approach many sellers are starting to request the contract with repair terms that can be capped be used as it takes away the buyers ability to cancel the contract in “the buyer’s sole discretion.” Since offers have accelerated at the pace they have due to low inventory levels, bidding wars are more commonplace, resulting in purchase offers where the purchase price cannot be supported by an appraisal. To avoid a contract being cancelled by the buyer due to the offer they made not being supported by an appraisal, sellers are now requesting appraisal contingencies to be removed from the contract in many cases.
The Joy of Summer, Fulfilling Our Goals and Dreams
If you are like me, it seems the older we get the faster life appears to be passing. Oftentimes I find things I recall as happening a year or two ago occurred three or four years prior and I sit amazed at how quickly those years passed. Recently I’ve lost a few close friends and have others who are struggling with health issues and it seems the reoccurring comment I hear is, “don’t take life for granted and stop putting off your goals and dreams another day.” Even those not going through any kind of challenge have shared with me their desire to live a more fulfilling life. I then think of a comment Pastor and Televangelist Joel Osteen once said that has resonated with me, “There are many great books and inventions lying in cemeteries that never came to fruition!” “Is this my time to finally give myself permission to set time aside to fulfill my desires?” More importantly, “What legacy do I leave my son when he never sees me fulfill my goals and dreams?” The quote attributed to Walt Disney, but is presumed to be said by Disney Imagineer Tom Fitzgerald, “If you can dream it, you can do it,” has recently taken on a whole new meaning for me. “Why do I find myself always in front of my computer when not with clients showing property?” When we first moved down from New York 22 years ago we went boating, played tennis and golf, visited the beach, and started writing a book that I have yet to finish. “What happened? Why am I not permitting myself to set time aside to enjoy those simple pleasures before it is too late and I can’t enjoy those moments to their fullest? Why am I reflecting on past memories and not making new ones?”
I have always been a “summer kid,” at heart. Summer was a time when everything came alive and those memories have been frozen in time and seem like they just occurred yesterday. Simple things like bike rides, trips to the beach, days spent boating and exploring new areas by car were those simple pleasures that hold such as special place in my heart. Now I’m hearing friends of mine who are on the road fulfilling dreams of traveling the country this summer in an RV, something they never did before. Another special couple we know is cruising their way up the Intracoastal from Florida to New York and ultimately completing the “Great Loop” as they return via the Mississippi. They have been documenting and sharing pictures of their travels on daily postings where you feel like a stowaway on their great adventure. For some these adventures have been planned for months, for others, it has been more spontaneous. In contrast, my recent adventures by car have taken me to such exotic places as Costco and Trader Joe’s where I am mesmerized by fresh-cut flowers and displays of barbeque grills and patio furniture. “What happened to our boating trips to places like Tween Waters in North Captiva where we felt like we were on vacation, or our excursions to the beach and small towns along the way with their quaint shops and restaurants?” As for golf and tennis, Tiger Woods and Roger Federer have nothing to worry about as I’m not even sure which end of the racquet or club I’m supposed to grip.
I’ve often laughed at those who are looking to move to Florida who tell me how often they are going to go to the beach, enjoy boating, and playing as much golf and tennis they can fit between all their outdoor activities. When asked why I’m laughing I typically respond with, “Sure you are and before you know it six months will pass and you won’t believe how little you did those things, yet your life will seem so busy.” I continue by saying, “We fall into this “manana” mindset where what we don’t do today we feel we can always do tomorrow and before you realize it weeks and months have passed and you haven’t done many of the things that brought you here in the first place.”
Have I become my father who always looked forward to the weekend and then spent it admiring his handiwork trimming bushes and washing the car while others passed by on their boats or in their cars on their way to the golf course or to unknown destinations? If Covid didn’t have a way of taking stock in what’s important in life, certainly those daily reminders from friends saying, “I’m not putting off another day what I have been wanting to do all my life,” is something worth acting on.
Apparently my wife Gail didn’t think I was implementing this goal fast enough and took matters into her own hands and signed us up for a golf membership. Giving myself permission it was O.K. to put the computer aside for two hours I felt like a kid with a new toy as we had a fun-filled round where my wife showed me the finer points of using someone’s pool cage to have her golf shot land in the middle of the fairway! While I never learned that trick in junior golf, it made me realize all the special moments I was missing, and wonderful memories I wasn’t making.
Golf may be just the beginning of recapturing some of those lost opportunities I took for granted, and hopefully, soon I’ll finish that book I started to write so many years ago that gave me so much enjoyment. While I don’t know if it will be a best seller one thing is for certain, I’m going to make the most of this summer and start to enjoy pursuing those goals and dreams I’ve been putting off far too long.
-Gary Cardillo
Spring Has More Than Sprung!
For weeks I’ve been trying to come up with the perfect thought for this newsletter and found myself continually searching for something meaningful. When I first sat down to write Passover and Easter were upon us and I thought, what a great way to welcome in the new spring season by entitling my thoughts “A Second Chance.” This was a time when the Hebrews were saved from their captivity by the Egyptians and the angel of death passed over sparing their firstborn sons. For Christians, Christ’s resurrection was their second chance to realize there was life after apparent death and now there was the promise of an eternal life to come. While both holidays are rich in history today they are commonly seen as the welcoming of spring and one of hope.
To me, spring has always been a rebirth of sorts with flowers and trees coming back to life after a long harsh winter where it appeared they succumbed to the ravages of the snow and ice. People emerged from their homes after being cooped up most of the winter and everything just seemed more alive as the promise of summer with its warmer weather and outdoor activities was just around the corner. It was that euphoric feeling I wanted to capture, and one that has been on the faces of many we’ve seen this year who have decided to make Florida their permanent home in search of a better quality of life.
As much as I intended to embrace this theme, I found I was continually approached by many asking how to navigate a real estate market that seems more like a runaway train. What started as their euphoric journey to a new beginning has become anything but, as we are experiencing what has become a feeding frenzy. Wasn’t March supposed to come in like a lion, marking the beginning of spring, and exiting like a lamb? If that is the case, then April and May must be monsters and our “Spring” has more than sprung. Of course, I am referencing the real estate market and not the weather, as by all accounts our temperatures this season have been some of the most enjoyable we’ve experienced in a long time.
The real estate market on the other hand is something I don’t think anyone could have predicted. Low inventory levels combined with significant numbers of those looking to move to the area have created a unique market the likes most people have never seen. No longer is a full-price offer going to guarantee you’ll be the winning bid, in fact, most likely you’ll be looking from the outside in. Remember when a home that was on the market for ten days was considered a very new listing worth seeing? In today’s market, most people look at a home that has been on the market for ten days and wonder, “What’s wrong with the house?” Offers of $20,000, $30,000, $50,000 and moreover full price are now commonplace. Some are foregoing inspections and offering to compensate the seller on some of their closing costs. And did I mention “escalation clauses?” What is going on? For the seller, it’s almost like shooting fish in a barrel. Those who never thought of selling their homes are now thinking, “With the meteoric rise in offers, let’s put our house on the market.” Of course, that may be a double edge sword as once they sell their home they now jump into the tank with all the other buyers competing for the limited inventory on hand.
Others feel, “I’ll just wait for the housing market to crash, and then I’ll buy a home at a more reasonable price.” While I’d be as foolish as anyone to predict that will never happen again, after seeing what happened to the housing market in 2007 and 2008, I can tell you this is a very different market. Then we had much higher inventory levels and sub-prime mortgages were given to almost anyone who could sign their name. Today, most likely many would not be able to secure a loan under today’s lending guidelines. Then it was very much a speculative market driven by investors. Baby Boomers were supposed to be moving down for the next 20 or 30 years, so how could the sky ever fall? Unfortunately, we all found out, “Man makes plans and God laughs.”
What I’m seeing in the housing market today reminds me of the behavioral patterns of the panic hoarding we’ve seen when a major storm is in the forecast or during this pandemic. Fear of not having enough and grabbing as much as you can reach epidemic proportions as store shelves laid barren for weeks on end. I’m still trying to understand the rush on toilet paper, paper towels not to mention hand sanitizers! Since when did everyone become so obsessed with being germ-free? Go to a store today and the shelves are fully stocked once again, although I still have been challenged at times to find chicken wings! Panic shopping now seems to be a distant memory for some but now it has manifested itself in the housing market.
Having worked in the “concrete jungle” of New York City myself, I can understand why someone would want to move to Florida, but many states like Florida aren’t closing their doors to those looking to relocate for a better quality of life. For those waiting for the market to crash before they buy, you may be waiting for a while as this market is characterized by “end users, not investors. Inventory levels are much lower and you’ll be surprised by the number of cash buyers in the market. My advice is not to worry new listings are coming on the market every day. It may not be the home at the price you originally were after, but it is hard to put a price on the quality of life you will gain.
I feel life gives us lessons we can either learn from or repeat. When we couldn’t get the products we wanted during the pandemic, we found we could be just as happy with something that served our needs almost as well. We didn’t get to visit our favorite restaurants or entertainment venues as much, but most of us found enjoyment in the simple pleasures of early morning walks or bike rides together, perhaps even watching a Hallmark movie or two together.
Spring is a wonderful time of year and this year it is even more special as not only are flowers and trees coming into full bloom but so are we as a community now that many of the restrictions that have governed much of our lives for the past year are being lifted. The lesson we learned from the “pause” the pandemic forced on us was to enjoy each other and the pleasures life gives us. If we’ve learned our lessons from the past we don’t need to panic every time we encounter something we’ve never experienced before. Spring is in full bloom this season and perhaps more bright and full of appreciation and hope than ever before.
-Gary Cardillo
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