South Florida Real Estate Blog by Alfredo Ruiz, Realtor

It’s 2020—Paperwork May be at Risk!

In case you haven’t heard yet, you’d better watch out for 2020’s date-noting anomaly. This quirk was widely publicized on January 1, but for Boca Raton residents whose holiday focus was limited to Rose Parade floats and football games, it’s worth another mention.

As USA Today scolded, “Stop abbreviating 2020.” That is, if you (like most Boca Raton check writers) are accustomed to shortening the date by writing only the last two digits of the year (so you would have written “11-15-19” instead of “11-15-2019”), you’d better stop doing that; at least for the remainder of this year. According to legal authorities, the shorthand version could “cost you big.”  

The problem is that in 2020, a date written with just the “20” for the year can easily be altered by simply adding two digits. A check written in 2020 could, by appending “19,” appear to have been dated a year earlier. That creates an easy opportunity for fraud. As one example, a current purchase contract could be made to appear to be a year or two older, with the extra payments now long overdue. Even though you might find it unlikely that you could be victimized, ruling out the possibility is as easy as jotting down the two extra digits.

For anyone transacting Boca Raton home sale this year, that’s a particularly good idea. The paperwork that flows across the closing table is voluminous—and the importance of seeing that the dates are unassailably accurate goes without saying. However remote the chance that nefarious characters might one day take advantage...

What Devices are Poised to Infiltrate Delray Beach Real Estate?

Readwrite.com is an engaging online publication that examines all sorts of brain-teasing futuristic innovations. They write about everything from Facebook (“started as a place to meet people at your college…then the place to meet the people you used to know at college…now it’s not quite clear what it’s for…”) to mapping Mars in 3D.

One of their beats is the future of real estate. So their recent examination of the “Internet of Things,” How IoT is Infiltrating the Real Estate Market, looked to offer a wary examination of IoT—“The Internet of Things”—as a subversive disrupter of the way traditional Delray Beach real estate business is conducted.  

 The Internet of Things is the technology that enables a galaxy of devices to connect to the web to perform “smart” functions in a coordinated manner. Readwrite’s piece described how IoT is “popping up everywhere”—seeping its way into many diverse industries. It explored four key areas where IoT inroads are “having a profound impact on real estate”: 

  • Energy efficiency. “Smart” lighting, for instance, adjusts lighting to respond to changing conditions, and WiFi-enabled water heaters allow owners to control times of day when hot water will be needed—and when not. Similarly, plumbing sensors can be installed to measure temperature changes to determine usage patterns.  
  • Maintenance costs. IoT monitors can track usage and sense irregularities in equipment performance—then...

Holiday Pet Hazards Cause Owners to Think Twice

This is the time of year when Boynton Beach pet owners start to hear reminders that the holidays usher in Danger Season for family pets. It isn’t only that Fido is liable to pull the Christmas tree into the fireplace or that Puss’s snow globe attack carries the danger of swallowing the antifreeze inside it. More prominently, Boynton Beach pet owners are warned to steer clear of holiday plants and berries “because they’re deadly” for cats and dogs.

Such warnings serve to remind everyone that family pets can interact with the strange new decorations in unpredictable ways. When conscientious dog and cat lovers first bring a new puppy or kitten into the house, they are careful to keep potentially dangerous objects up and out of the way—as we do for human babies. We “childproof” everything at first—until the growing child has demonstrated appropriate levels of common sense about household dangers.

Perhaps because of that example, we may tend to lower our guard once an animal has passed infancy and made peace with the home environment. But that’s not taking into account that, unlike little humans, pets don’t understand the meaning of Christmas or Hanukkah—only that something alien is invading their corner of the world. They can decide that the brightly festooned holiday gear looks tasty. Or threatening. Or just worth climbing onto/jumping up on/chomping into.

So the holiday pet warnings should be welcome for reminding everyone that this is the season to think twice about our four-footed family members before we install the festive paraphernalia. Yes, mistletoe (especially European imports) can be toxic; but...

DSCR is a Shorthand Tool for Boynton Beach Real Estate Investors

Boynton Beach real estate investors who are taking a hard look at this autumn’s Boynton Beach listings can be counted on to have some blend of two objectives in mind. They’ll be looking for a property that will bring in cash on a regular basis, or one that grows in collateral value over the long haul—or some combination of both. Experienced investors can do a quick estimate of how most Boynton Beach properties will meet their objectives—although they will be working through more exact projections once they’ve winnowed the field down to a few candidates.

If financing is to be involved, the acronym “DSCR” enters the picture.

The DSCR (Debt Service Coverage Ratio) won’t matter if the investor plans to pay cash upfront or will apply for a loan based on his or her personal assets and income. But if the loan will be collateralized on the investment property itself, its DSCR will be key.

It's a calculation that makes perfect sense. Using Motley Fool’s broad definition, it is the quotient of the investment property’s NOI (net operating income) divided by its debt obligation.

That means that a DSCR of 1.0 is a shorthand way to describe a break-even situation—one where the investment can exactly pay for itself with nothing left over. If the DSCR is accurate, such an investment property stands to build equity without costing the investor anything beyond the original down payment.

Similarly, a DSCR of less than 1.0 means that the investor will have to add cash to keep the investment above water; just as a DSCR of...

High Offer? Best Offer? Are they always the Same?

It’s exactly what you were hoping for when you listed your Boca Raton house: multiple offers! They’ve just been submitted, and now you get to choose which offer is the best one. The highest dollar amount may look like the instant winner, but that first blush reaction should be put aside while all the included provisions are given thoughtful consideration.

If the top line amount offered is the only major difference, the decision can be an easy one—but that’s seldom the case. Your house sale’s net yield can be greatly affected by the offer details—considerations like these:

Timing–if the proposed closing date will arrive too soon OR too far in the future, accepting it may prove more costly than you’d think. It depends on the move-in date for your next home—especially if that’s up in the air. Gaps can be costly—especially if it winds up forcing you into a too-hasty (or too expensive) choice for your next home.

Cash or ??—“All-cash” offers sound appealing, but some cash offers aren’t as open-and-closed as the term implies—such as those funded by a loan that’s not contingent on the sale. If that offer is based on a line of credit, there might be less certainty than another based on cash in the bank. There is also something to be said for the hoops buyers have to jump through when a lender is enlisted—some of those protect the seller as well as the bank.

All those Contingencies—The standard contingencies (like inspection, financing, appraisal, or sale of the buyer’s property) most obviously stand to affect the...

What’s the Real Delray Beach “Housing Affordability” Factor?

 

 

There are many ways to look at housing affordability in Delray Beach—but if you’re a typical prospective homebuyer, the one that makes a real difference isn’t found in the real estate statistics.  The truly decisive “affordability” factor is the dollar amount of the mortgage payment that goes with the price of the home. It’s either affordable or it isn’t.

It's a well-publicized fact that U.S. home prices have risen dramatically since the end of the Great Recession. That would seem to mean that average housing affordability over that period has been in decline—especially early in the recovery when incomes were rising slowly (if at all). Since then, many commentaries have pointed out a “housing affordability gap” that (along with a shortage of homes for sale) has been used to explain lackluster market activity.

For most of Delray Beach’s prospective homebuyers, all that is background noise. It might keep some from even starting to look for a new house, but when circumstances dictate that it’s time to find a new home, true “housing affordability” comes down to those monthly cost figures. And the actual numbers are headed in the right direction.

The final 2019 statistics won’t be in until long after the Waterford crystal ball has dropped in Times Square, but as of this summer, the “typical mortgage payment” has actually shrunk year over year. That was Corelogic’s finding, published this summer. By September, TheMortgageReports contributor Aly Yale could write, “home prices might be up, but American...

Favorable News for those Selling their Delray Beach House

For those pondering the timetable for selling their Delray Beach house, last week’s developments may add a couple of plusses into the “sooner” column. There are always pros and cons about listing in the fall versus waiting for the spring and summer market—but last week’s information could tilt toward acting now.

First (and most well-publicized) was the outlook for home loan interest rates…again! The news wasn’t unexpected, but the accompanying commentary added a compelling note. The Fed again lowered their benchmark rate by .25%, which is very likely to keep mortgage rates in the historically low range for homebuyers—but the Fed Governors also made it clear that this is very probably their last action for a good while. As Bankrate.com observed, “policymakers signaled they’re ready to hit the ‘pause’ button on additional cuts.”

In other words, for buyers who’ve been patiently waiting for the best possible home loan rates, they will likely decide they’ve waited long enough—the coming mortgage rates are unlikely to dip much lower. For those thinking of selling their Delray Beach house, low rates mean that buyers find higher asking prices acceptable since lower rates equate to more affordable monthly payments. Today’s buyers have demonstrated pronounced sensitivity to that bottom line.

The second news arrived as a less-publicized cluster of informed opinions. Most persuasive was the official voice of quasi-government bigshot Freddie Mac’s flat assertion that “…the housing market remains on solid ground.” They reported that housing starts, building permits,...

Boynton Beach, a Heads-Up: “Daylight Savings Time” is All Wrong!

On Sunday, the end of Boynton Beach daylight savings time will have us all regaining the hour we lent ourselves last spring. That’s a realistic way to look at what we’re actually doing when we set our clocks backward. We should enjoy the extra snoozing time—we’ve earned it, and get to keep hold of it until next March 8.

If you’re wondering why the “d,” “s,” and “t” aren’t capitalized in that opening sentence, it’s because of the prodding of the British qa.com educational site. When it comes to daylight savings, we might think of them as the grammar police (although they’d probably rather have that, “grammar constables”).

British grammarians frequently share their exasperation at the way their language is mistreated by the rest of the English-speaking world. “Daylight Savings Time” seems to present a ripe opportunity.  They open the critique by declaring that the phrase is technically incorrect, despite its universal use throughout Australia, Canada, and the U.S. They say that the plural “savings” only became popular because of its similarity to everyday phrases like “savings account.” They point out that even “the U.S. Government Publishing Office style guide” agrees. For the record, that title should be “Government Publishing Office Style Manual.” Take that, qa.com!

But qa.com also wants all of Boynton Beach to straighten out and fly right—to start saying, “Daylight Saving Time,” no matter how weird that sounds. And that’s not all. They want everybody to stop capitalizing...

It’s Not Halloween Yet—but Some Home Décor is Horrifying!

Boca Raton neighborhoods are already boasting their traditional pre-Halloween decorations. Like ‘mums and pumpkins, the appearance of mannequin goblins and ghosts is, after all, some of the first signs of autumn. Perhaps by way of getting into the spirit of the coming holiday, the editors of last Friday’s Realtor® Magazine dispensed with its list of “Horrifying Decorative Trends” as chosen by professional designers.

The survey results are, for the most part, amusing—unless your own Boca Raton décor happens to include any “horrifying” inclusions. In fact, you can argue that some (vertical blinds, inspirational quote art, wood paneling) may be considered less than current high style, but well short of horrifying.

Other of the décor items making Realtor’s list are less controversial—like artificial fruit (the illustration showed a slightly dusty grape cluster), wallpaper borders (illustrated by a tediously repetitious border featuring particularly busy sketches of Tuscan basketry), and—following a similar theme—eye-confounding bedroom ruffles and florals.

The list of stand-out...

Who Says Owning Your Own House “is the Best Investment”?

You don’t have to convince local homeowners about the wisdom of owning your own Boynton Beach house—but for a while a couple of years ago, that wasn’t universally agreed upon. There was a while there where financial analysts were pointing to the costs of maintenance, interest on mortgage payments, relatively low rental rates, and a bundle of other factors in an argument against owning your own house.

Those voices have been hard to find of late—the numbers make that case pretty hard to support. More common are the analyses like the one CNBC’s The Oracles published last week. The Oracles are “a mastermind group of the world’s leading entrepreneurs.” They assembled a list of 9 reasons that support their contention that owning your own house is a financially canny decision. Actually, their claim is stronger than that.

They say that real estate is still the best investment you can make today.

Some of the reasons are rooted in common sense—like “People will always need a place to live” (#8) and “You get six-figure tax breaks” (#5).

Reason #1 was a personal endorsement by TV’s Shark Tank judge Barbara Corcoran: “Buying real estate has made me rich!” Having reasoned that she needed a place to live “somewhere anyway,” she wound up parlaying a “few bucks” invested in “an itty-bitty” studio apartment into a 10-room penthouse on Manhattan’s Fifth Avenue.

Other reasons elaborated on the long-term history of financial results, like #4—“Buying...