Archive for the 'Pensacola Buyers' Category
Buy Now Or Pay More Later - Pensacola Real Estate Mortgage Rates Are Rising
June 21st, 2008 Categories: Pensacola Buyers
The price of food and gas is not the only thing that is rising. Mortgage rates are rising too. If you are looking to buy a new home, I recommend starting the process sooner than later. A down real estate market and low interest rates create the perfect opportunity for getting great deals on real estate. But waiting around for the “right time to buy” will end up costing you money in the long run. Now is the right time. Read on to find out why.
Here are just a few quotes from various news sources published in the past few days:
Mortgage Rates Rise Again - Fixed rate mortgages have reached their highest rates in over 10 months, according to bankrate.com.
Mortgage Rates At Highest Level In 9 Months
Mortgage Rates May Go Over 7 Percent This Year
Brian Brady is an excellent blogger whose blog I read regularly. Here is his most recent Mortgage Rates Report .
Brian believes that rates will come back down within 3 years, but could rise up to 2% before then. However, I believe that within 3 years the Pensacola real estate market will be well into another upward cycle. This means you will be paying considerably more for a home in 3 years compared to what you would be paying for that home today.
How Much Can Rising Real Estate Mortgage Rates Cost You?
The table below illustrates the cost of a 30-year mortgage at varying interest rates. The numbers are based on the mortgage being kept for the full term of 30 years. 
Assuming the interest rate is 6.5% today, look how much the monthly payment goes up with each 1% rise in interest rates. It is over $100 per month for a $150,000 mortgage and over $130 per month for a $200,000 loan. These figures only include Principle and Interest, not insurance or taxes. If you were to live in the home for 30 years, the “Cost Over Today’s Rate” column shows how much more you will pay over the life of the loan at higher interest rates.
Does buying a home now make sense?
Absolutely, assuming you can afford the home you want. Every real estate agent knows that we are close to the bottom of the real estate market in Pensacola, and interest rates will rise, at least for the next several years. If you can’t afford the home you want, buy a less expensive home and use that to build equity and move up to a nicer home in the years to come.
Shop Carefully For The Real Bargains
I am not recommending just buying any home. There are a lot of homes on the market and some of them are super deals. Others are grossly overpriced. This is where a good real estate agent can help. A good agent can help you analyze the value of various homes on the market that you may be interested in purchasing and help you find motivated sellers who are willing to sell at bargain prices.
If you are ready to buy, please feel free to Contact Me for assistance. I can help you make sure that you get the most for your money.
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Make Sure Your Home Warranty Is There When You Need It (Follow-up)
May 12th, 2008 Categories: First Time Home Buyers, Home Inspections, Pensacola Buyers, Saving You Money
A few weeks back I wrote an article on Pensacola Real Estate News about how you should protect your investment in a home warranty by making sure that all warranted items were in working condition when you moved into your home. I noted that the home warranty company would try to find a way out of paying for repairs if at all possible. The article was written based on the experiences of one of my clients. You can read that article by clicking on this link: Pensacola Real Estate News - Home Warranty Article
The fact that I am writing a follow-up article tells you that I’ve learned something since that previous article was published. I also learned that I have readers out there who are sharing feedback with me, and I greatly appreciate that. 
Just the fact that I have readers really excites me.
The day after publishing that article, a manager from the local branch of Old Republic Home Warranty company called me. He thanked me for the great article and was very complimentary (Thank you Stewart). He also told me that my article was accurate up until mid-December 2007. He said that in December Old Republic modified their agreement to cover unknown pre-existing conditions. I took a look at the new home warranty agreement and found the following wording:
Coverage may apply to a malfunction which existed on the effective date of the Plan if, at that time, the malfunction was unknown, and would not have been detectable to seller, buyer or agent by visual inspection and simple mechanical test. This Plan does not cover known defects.
I will let my readers decide how they feel about this wording. I believe it does indicate that they would cover an unknown pre-existing condition, but I do not like the word “may”. I prefer the word “will”, as in “coverage WILL apply”.
I do appreciate the call from the home warranty manager, and I fully believe he is sincere in his promise that they will cover pre-existing unknown problems. I do, however, still suggest that home buyers follow my advice given in the previous article. Check out all warranted equipment when you move in to your new home.
As for my client, well I’m afraid he was a male who doesn’t do much cooking and wasn’t clear on how to operate his warranted oven. After he was told by the sweet home warranty operator that his problem was not covered because he did not know if it worked when he moved in, he took another shot at it and found that the oven worked fine once he turned the correct knobs in the correct order. Now this guy in the picture is not my client, thank goodness. While he appears to know how to operate the stove, he kind of creeps me out with that sinister grin. I have to wonder what he is cooking.
Aside from the creepy dude, all is well with my client, and his lack of oven experience happened to make for a great article. However, he purchased his home warranty in February of 2008, after the new policy was in place. Thus the new “unknown pre-existing” clause should have been in effect. Was the home warranty operator unaware of the change in the contract? Or was she aware of the change, and still trying to avoid paying a claim? Good question.
I must end this article by saying that I have other clients who had warranties through Old Republic and were extremely satisfied with the service they received on warranted equipment. I am not trying to criticize any warranty company’s service, only trying to show home buyers how to protect themselves against the unknown.
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Make Sure Your Home Warranty Is There When You Need It, Money Saving Advice From Pensacola Real Estate News
April 23rd, 2008 Categories: First Time Home Buyers, Home Inspections, Pensacola Buyers, Saving You Money
When buying or selling real estate, home warranty plans are often included as an incentive from the seller to the buyer, or sometimes as a negotiation tool. I recommend all of my home buyers get a home warranty, even if the seller is not offering a home warranty and the buyer has to pay for it. In this buyer’s real estate market, motivated sellers should offer a home warranty. 
However, this article is not about getting a home warranty. This article is about how to protect your investment in a home warranty once you have it. Remember, the home warranty provider does not make money by fixing your problems. The home warranty provider wants to find a way to get out of fixing your problems, and thus keeping their money. Please take this advice to heart. It could save you a lot of frustration and money.
This article is based on an experience of a buyer who was my client. The behaviors described in this article may not be true for all home warranty companies. But the advice given is important, no matter who issues your home warranty.
TYPICAL SCENARIO
Let’s say that you purchased a home, along with a home warranty plan. You are feeling good knowing that if you have problems with warranted items, you pay a small service fee and the home warranty company will cover the rest. You had your home inspected prior to closing and the inspector told you that everything was in working condition.
Let’s say that you close on your home in July, a very hot time of year in Pensacola. Why would you think of running your heater in July?
Now November comes, and a blast of cold air comes down from the north. It is time to get some heat on. But to your dismay, the heater does not seem to be blowing any hot air. After checking what little you actually know how to check, and getting advice from your friends who don’t know any more about heating and A/C units than you do, you decide it is time to call the warranty company.
Important: Don’t bother calling your real estate agent. He or she likely knows very little about heating systems, and that is why he or she recommended you get a home warranty.
MAKING THE CALL – BE ON YOUR GUARD
You dig up your paperwork from the real estate closing, and give the warranty company a call. A very sweet customer service representative from the warranty company answers. She talks to you like a friend, sharing how terrible she feels that you may have to endure a few cold nights in your home while you wait for service. After several minutes of basic question and answer conversation, you are feeling very good about the whole situation. This warranty company really cares about you. You can just hear it in her voice. She is like a genuine friend.
And then the warranty company representative asks if you have tried the heater since you moved in to your new home. Your guard is down, you are at ease with your friend on the other end of the phone, and you answer “Well, no. We bought the home in July and it was very hot. But we had a home inspection and the inspector ensured us that the heater worked when the home was inspected”.
Then the warm and friendly answer on the other end comes. “We’re sorry, but since you have told us that you did not know if your heater worked when you purchased the home, we are not obligated to cover it under your warranty plan. You did not actually own the home when the inspector tested the heating system”.
OUCH!!! Even though the weather has gotten cold, you are now feeling pretty hot. But don’t lose your cool, as you can be sure the call is being recorded “to ensure quality service”. 
Don’t let this happen to you. When you move into your new home, test every item that is covered under the home warranty. If it is the middle of winter, test your air conditioning. If it is the middle of summer, test your heater. Test all of the burners on your stove, even if you never cook. Test all the features of your oven and your dishwasher. If the seller left you a freezer in the garage that you really don’t need right now, test it anyway.
Now if you have a problem in the future, you can call your home warranty company and say “YES, I know it worked when I moved in because I used it”. It is as simple as that. You keep your warranty in force.
BUT what if you move in and test your heater, or your stove, or your A/C, and find that it doesn’t work? You have no way of proving that it worked at the time you purchased your home warranty, which was at the closing table. What are you going to tell the warranty company when they ask you if you have tried it since you moved in and verified that it worked? I just wrote this article to explain how to protect your home warranty, not to answer moral dilemmas. Hopefully you will never have to decide how you would answer your friendly home warranty operator in this situation.
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Cheap Waterfront Real Estate In Pensacola Florida
March 22nd, 2008 Categories: Pensacola Buyers, Pensacola Real Estate News
“Cheap Waterfront” are two words that have not been used in to describe waterfront real estate in Northwest Florida for a very long time. However, we may now be seeing our beautiful bayfront and intracoastal waterfront homes and lots fall to prices not seen since the late 1990’s.
Below you can see one of the best waterfront lot values on Perdido Key, 100 feet of waterfront on a .30 acre lot for under $325,000.
From Navarre to Perdido Key, prices continue to respond to the downward pressure on the market caused by the slow but certain deflation of the real estate bubble, the sagging national economy, and the abysmal state of the local economy. Most of the properties have been completely repaired, restored and updated to better than ever condition, with their owners expecting to be able to recoup the investments by relying on the traditional high resale value of waterfront. However, these property owners have not seen the appreciation they hoped for, with many canal, bay, and sound front homes languishing on the market for months. It seems the time has come for a certain percentage of owners to cut their losses and negotiate prices that they never dreamed they would sell their little pieces of paradise for.
This beautiful 2 story waterfront home below on Santa Rosa Sound is one of 2 homes for sale on the same lot. With both the homes, you can get a total of 6 bedrooms and 4 baths for under $600,000. That is only $300,000 asking price for each home. You could live in one home and rent the other out, or have family living close together on pristine Santa Rosa waterfront. Or, for people who love to entertain out of town family or guests, the 2nd home could be used as an exclusive luxurious guest house. How impressive would that be???!!! If you are interested in this beautiful waterfront property, call me to see it, at 850-512-2587
It is becoming common to find 2000+ square foot homes on 50-100 ft lots for less than $500,000, and waterfront lots, some with panoramic views of pristine barrier islands, beautiful sunsets, and deep water access for $300,000 or less. It is becoming more and more common for older homes to be torn down and replaced with state of the art hurricane hardened homes.
The question on everyone’s mind has now become “how low can it go”. We must surely be approaching a price level for these types of properties that compares favorably with the entire nation, especially given the natural beauty of the area. The only reason some of these properties have not sold may be that the areas they are in have been well kept secrets, hidden away from the main east to west highway 98 corridor by the big, moss covered oaks that cover the peninsula of land that forms the Gulf Breeze and west Navarre communities.
It is certain that within the next several months these properties will become too much of a value to resist, and will be snapped up by people who had dreamed of living on the water all their lives but never thought they could afford it. Additionally, foreign investors are now taking advantage of the falling dollar and searching out these hidden gems for future returns.
For more information on great deals on Pensacola waterfront properties, Contact Me and let me show you all the great deals on Pensacola waterfront homes and land.
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How To Search For Pensacola Real Estate The Right Way
December 19th, 2007 Categories: First Time Home Buyers, Pensacola Buyers, Working With Realtors
If you are going to search for a home in the Pensacola Florida area, you will most likely begin your search on the Internet. While there are many sites available on which to search for Pensacola homes, all are not created equal.
To get the most accurate and up-to-date search results, you need to be searching on the Pensacola MLS. Other home search sites will have information on homes available in the Pensacola real estate market, but these sites often don’t have a complete and current database of Pensacola homes for sale. You may find homes on these sites that show as active listings, but which actually are already under contract or even sold. This situation can happen because other sites do not have a direct Internet data feed from the Pensacola MLS. Thus delays in record updates are common.
A fellow real estate blogger in Alabama posted a great article about this recently. You can read it at his Dothan Home Search site.
Remember, when you are performing a search for a home to buy, you can search the Pensacola MLS by clicking the “Search For Homes” link in the menu bar at the top of this page. If you need more criteria defined in your home search than are available through the Pensacola public MLS, please feel free to Contact Me .
As a Pensacola Realtor, I have the ability to perform a search based on a wide range of criteria not available on the public MLS. In addition, I can provide a service for you whereby you can receive an email when any home that matches your criteria becomes available on the Pensacola real estate market.
If you would like to sign up for this free notification service, just call or email me and I will help you find exactly what you are looking for. You will never be spammed with unrelated emails. You will only get emails when a home comes on the market that meets your criteria.
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Earnest Money: Clarifying The Confusion For Pensacola Home Buyers - Part 2
November 24th, 2007 Categories: Pensacola Buyers, Pensacola Sellers, Working With Realtors
Earnest money shows commitment to buy. My real estate experience has shown that many home buyers in the Pensacola real estate market do not understand the concept of earnest money. This is an important concept to understand when making an offer on Pensacola real estate.
Click the link below to read Part 1 of this article:
Earnest Money: Clarifying The Confusion For Pensacola Home Buyers - Part 1
In Part 1 we discussed what earnest money is and how much should be offered when buying a home in Pensacola Florida. In Part 2, we will address the following questions:
1. Who holds the earnest money?
2. What ultimately happens to the earnest money?
These are 2 questions I encounter regularly when working with Pensacola real estate buyers.
When a buyer makes an offer on a home, the buyer will give their real estate agent a check for the earnest money deposit. The real estate contract 
will dictate to whom that check is made payable. The check may be written to the real estate broker, who is required to deposit it in a trust fund. However, this tends to be a burden on the brokers, so the check is commonly made payable to the title company that is expected to handle the closing of the real estate transaction. The title company holds the earnest money in escrow.
At the end of the real estate transaction, whether it be a successful closing or fail to close, there are 3 things that can happen to the earnest money.
1. It is applied to the purchase price of the home
2. It is returned to the buyer
3. It is disbursed to the seller
If all goes well and the real estate transaction results in a successful closing, the earnest money is applied to the purchase price of the home. Thus if the home is sold for $100k and the earnest money deposit was $1000, the buyer will need $99K to close.
If the real estate transaction cannot be completed, the earnest money will be returned to the buyer if the buyer complied with the terms of the contract. Most real estate contracts, including those used in the Pensacola real estate market, require that the buyer apply for financing within a certain number of days from the effective date of the contract. If the buyer makes a good faith effort to obtain financing and cannot, the earnest money will be returned to the buyer. If financing is obtained, the buyer still has the option of having a home inspection. If the buyer is not satisfied with the results of the inspection, the buyer can back out of the the contract and have the earnest money returned.
This has been a simple overview of how earnest money can be returned to the buyer. I go into much greater detail with my Pensacola real estate clients with regards to their obligations under the real estate contract.
If buyers fail to act in good faith in complying with the terms of the real estate contract, the earnest money can be disbursed to the seller. This generally happens if the buyer is determined to be in breach of the real estate contract.
A good real estate agent will do everything possible to prevent breach of contract, but ultimately it is the buyer’s responsibility to meet the terms of the contract.
As a final note, there are 2 important points that I need to address in regards to earnest money. These points are:
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Earnest money is NOT a requirement of the real estate contract
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The earnest money check is deposited, it is not held until closing
The fact is, earnest money is not a requirement of an offer to purchase real estate. If a seller is willing to accept an offer without an earnest money deposit, so much better for the buyer. However, the reality is that most sellers will require an earnest money deposit.
Buyers also need to know that they must have the funds in their account to cover the earnest money check. The check is not held by the designated escrow agent until closing, it is immediately deposited into an account. Thus the earnest money funds must be available immediately. A bounced earnest money check can cause serious problems with the real estate transaction.
Look for detailed discussions of real estate contract terms is upcoming articles. We’ll see just how interesting I can make a contract discussion. I can hear the yawns already.
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Earnest Money: Clarifying The Confusion For Pensacola Home Buyers - Part 1
November 22nd, 2007 Categories: Pensacola Buyers, Pensacola Sellers, Working With Realtors
Earnest money is all about commitment. My real estate experience has shown that earnest money is a topic unfamiliar to many home buyers in the Pensacola real estate market. I have worked with many clients who did not understand the earnest money concept when making an offer on a Pensacola home.
We’ll tackle the 4 biggest questions I have encountered when working with Pensacola real estate buyers:
1. What is earnest money?
2. What is the proper amount of earnest money to put down?
3. Who holds the earnest money?
4. What ultimately happens to the earnest money?
We’ll start with question 1, “What is earnest money?” Earnest money is money that the buyer provides along with an offer on a home. It is considered “good faith” money. The buyer is offering good faith to the seller that the buyer will do everything possible to obtain financing and purchase the home. Without an earnest money deposit, the buyer has nothing to lose by backing out of the real estate contract. Note that there are legal ramifications, but these are rarely pursued due to the legal costs involved. In other words, the real winners end up being the attorneys.
When the seller accepts an offer, the seller effectively takes the home off the real estate market. This is done by having the real estate agent mark the listing as ”Pending” in the Pensacola MLS. Thus the seller is risking losing a potential buyer while the home is under contract. Buyers in the market will no longer be looking at this seller’s home. In addition, the seller is paying holding costs up until the home is sold. For this reason, larger earnest money deposits make the seller more comfortable with the potential buyer. Larger earnest money deposits show that the buyer is more committed to the purchase of the home.
2. What is the proper amount of earnest money to put down?
The answer depends on the price of the home and local real estate market conditions. Typically in Pensacola homes under $100K, a $1000 earnest money deposit would be acceptable. For higher priced homes, generally 1% of the purchase price is generally considered acceptable.
Real estate market conditions are also a factor in the amount of an earnest money deposit. Pensacola, as with much of the country, is experiencing a strong buyer’s real estate market. In a buyer’s market, buyers generally offer a minimum earnest money deposit. However, in a seller’s real estate market, as Pensacola experienced after hurricane Ivan, the amount of the earnest money deposit can make the difference between acceptance and rejection of an offer. If a seller has multiple offers, or expects more offers soon due to market conditions, the seller is more likely to accept an offer with a larger earnest money deposit, all other factors being equal. 
A common negotiation tactic used by seller’s real estate agents is to include an increased earnest money deposit in a counteroffer.
In some situations, when acting as a buyer’s agent, I counsel my buyers to break the earnest money deposit into 2 separate payments. A minimum deposit is included with the offer. Another earnest money deposit is promised after the completion of a home inspection. This method works in the interest of both the buyer and seller. The seller ultimately gets a larger earnest money deposit, and the buyer learns of the condition of the home before making a full earnest money deposit.
In part 2 of this article, I will discuss questions 3 and 4. Who holds the earnest money, and what happens to it in the end.
Click below to read Part 2:
Earnest Money: Clarifying The Confusion For Pensacola Home Buyers - Part 2
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