Selling A Furnished Property

Lately, it seems I've been involved in some sales of fully furnished properties. Sellers seem a little confused about how to proceed with these sales, and don't fully understand the revised rules under which today's mortgage companies operate in regard to loaning money for a furnished property.

Mortgage companies have never liked to loan money on a furnished home. Simply put, they don't like to loan money on used furniture. So for years, real estate agents have been listing furnished properties and including the phrase "furniture adds no value" in their description of the property in the MLS and in the sales contract. I guess that worked for awhile, but now things are different.

We now have new rules from mortgage companies about writing a mortgage on a furnished property. Essentially, if any furniture is included on a sales contract for property, the loan-to-value ratio of the loan will be reduced by the value of the furniture.

This means that the furniture will have to be appraised and the amount of the appraisal will be reduced from the purchase price. This might result in the buyer being forced to come to the closing with additional funds to make up the difference.

Here's a suggestion for those who want to sell a property furnished. First, make a detailed inventory of all the furniture that is going to be left with the property. Then, clearly state that the furniture will be sold in a separate bill of sale outside of the closing. That way the furniture stays at the property but should not be considered part of the real estate transaction. Sellers can charge whatever they want for the furniture, but they should keep in mind that used furniture does not usually have a very high price.

Hope this is of some help!

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Good News For Homeowners With Chinese Drywall

If your property was built with Chinese drywall, there may be some help coming your way!

The company that manufactured the drywall, Knauf Plasterboard Tianjin, has agreed to pay hundreds of millions of dollars to resolve court claims by thousands of Gulf-coast property owners. The property owners contend that the Chinese drywall has ruined their homes and caused various illnesses.

The deal with Knauf has been given preliminary approval by federal judge Eldon Fallon of the U.S. District Court who said the possible settlement seemed "fair, reasonable and adequate". Under the proposal, Knauf has agreed to create an uncapped fund to pay for repairing approximately 4,500 properties in Florida and other southeastern states where the defective drywall was sold and installed.

Sounds good to me!

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Bay Area Home Prices Predicted To Improve This Year

Any of you who read this blog regularly know that I do not like to make predictions. Usually, my crystal ball is kind of cloudy on when things are going to happen, so I just steer clear of sounding like a know-it-all.

Other people, however, have crystal balls as clear as gin and can see far into the future with perfect clarity.

Such is the case for an organization called Clear Capital. This California-based group has issued some predictions for the housing market for 2012, and I thought I would pass them along to you in case you didn't read today's Tampa Bay Times.

According to Clear Capital, the Tampa Bay area will see residential real estate prices increase 7.4% this year. That would make this area sixth best in the nation as far as price increases go.

They base this prediction on the fact that Tampa Bay suffered through some of the biggest declines in value in the last few years. So, I guess that in their opinion we have no place to go but up! Of course, the story also indicated that we are seeing a decline in housing inventory which should drive prices up, and a reduction in foreclosures as banks now prefer short sales which sell at a higher price than foreclosed property. With fewer houses on the market, prices should start to recover in this area. It's that old supply-and-demand thing from Econ 101. Remember it?

What other areas are predicted to have prices rise this year? Orlando, +11.7%. Miami, +8.8%. Jacksonville, +4.3%.

Clear Capital says some areas will still be falling. Atlanta, -14.4% (worst in the country). Los Angeles, - 10.3%. Seattle, -7.5%.

All I can say is that I hope these guys are correct about Tampa Bay. They indicated that most of the gains will come during the second half of the year, so look for rising prices after July.

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Some Good Real Estate News To Start The Year

Let's start 2012 with some good news about real estate!

In case you missed them, the newly re-named Tampa Bay Times has run two stories on back-to-back days that give everybody concerned with real estate a reason to smile.

On January 5th, there was a story about how growth is returning to Florida. The data was obtained from Atlas Van Lines. For the first time in five years, Atlas Van Lines has reported that inbound moves outnumbered outbound moves in Florida. In 2011, there were 5,636 inbound smoves and only 5,269 people moving out of the state. This may be a sign that the Florida economy is moving forward since more people from other states are moving here. That's good news for real estate since those new residents will need places to live.

The second piece of good news is that the vacancy rate for commercial/office buildings dropped 19% during 2011. Typically, when vacancy rates decline it means businesses are hiring more people. More jobs mean people have more money and have a better chance to qualify for home mortgages. This should be good news to home sellers throughout the Tampa Bay area.

These are both great trends. Let's hope they continue.

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