I've had a number of investors call and complain about so few houses on the market that they could buy. Seems they finally realized that the big funds have bought everything in sight, paying full market value and in some cases more (go figure). Well these buyers must know what they're doing; after all they are Wall Street Titans... RIGHT?

I've been watching this for over a year and predicting they would suck the air out of the market. In my area of South West Florida the Big Boys have bought almost everything. Only stuff left is the overpriced and the complete disasters. So if you have a house on the market longer than 60 days my guess: it is overpriced or a disaster or both.

Home Owners Insurance:

Well it appears that Florida homeowners are going to be getting another increase next year. Citizens, the insurer of last resort for Florida homeowners and investors, has asked the State Legislators for a 13% increase on all active policies and for new policies that the premiums charged be actuary sound.  And other private insurers have asked for permission to increase rates without going to the State board. All this adds up to higher premiums (again) for homeowners insurance in the near future. So you better get the price for insurance on that house you're thinking of buying before you buy not after. And make sure you figure that into your plans.

TAX PRORATIONS:

I have had 3 more members call and complain about their buyers calling them and telling them they owe the buyer more money for their share of the taxes on the house. It appears people are signing paperwork when they close that they will pay their share of any tax increase when the buyer gets the bill.

This is causing all kinds of issues because once the papers are signed the seller thinks he/she is done with the deal. What is happening is these taxes are figured on the old value when the house is sold to the investor. Then the investor sells it to the new owner and the County calculates the new taxes on the latest sales price.

Investor: Purchase  $ 65,000

          Repairs   $ 20,000

          Total    $ 85,000

Investor sells to new owner $ 125,000. Taxes are figured on the new sales price when the County sends out the tax bills for the year and it is assumed that the value was for the whole year. Hence the investor owes tax dollars for the time he/she owned the property. And this is not going over well.

One investor refused to pay it and the buyer, a big hedge fund, had their attorney send a letter hreating to take them to court. So make sure you understand this, so you won't be unpleasantly surprised by that tax bill in the mail. This is not something you can ignore.

Have a great month. Paul

Doris Corner: