LOCAL INFO • Market Updates • Sellers • June 30, 2022

Wire Fraud is Real – Before wiring any money …

by Gina Larouche

Wire Fraud is Real

Before wiring any money, call the intended recipient at a number you know is valid to confirm the instructions. Be safe. Review recommended steps below to safeguard your hard earned dollars….

There are steps homebuyers should take to make sure they are protecting themselves from falling victim to fraudsters, according to Kalember and the FBI.

Be vigilant: Homebuyers should first just be aware that they may be a targeted by scammers in this manner, and should act accordingly to verify any suspicious correspondence associated with their home purchase or sale.

Voice verify: It might seem cumbersome in an already long homebuying process, but following up emails with a voice verification is a must, Kalember said. That’s especially true if the email involves e-signing a document, logging into a new website, transacting money or supplying any kind of financial information

Talk to your bank: While not all banks may follow the guidelines you suggest, most will honor your request to not allow any wire transfers without a voice verification or other checkpoint from you. This is especially true for business accounts, but even individuals going through a real estate transaction can request a note be added to their primary accounts to put additional steps in place before allowing wire transactions to go through.

Don’t react immediately to email: Emails asking you to take some type of action, purporting to be from the title company, attorneys, realtors, bank lawyers or others involved in a transaction may not be authentic. Regard any of them with suspicion, and you should follow up on known phone numbers for the individuals making the request to confirm.

July 12, 2018 from Realtor Magazine…….

One of the fastest growing cybercrimes in the U.S. is wire fraud in real estate. About 9,600 people were victims of wire fraud in the real estate and rental sector in 2017, with losses of more than $56 million, according to FBI data.

Here are some interesting articles to read about this….

Forbes: Article on Scammers in WIRE FRAUD

Forbes: Cyber Crime on Real Estate Transactions

Realtors Association: Protecting your Transaction from Wire Fraud

CNBC Money: How-scammers-trick-new- homebuyers-with-wire-fraud.

To ALL my Clients please be aware of a growing concern and make sure you wire “carefully”. Gina

LOCAL INFO • Market Updates • June 30, 2022

Reverse Mortgage ?

by Gina Larouche

Source: http://edis.ifas.ufl.edu/fy1105

Reverse Mortgages: Understanding the Basics BY: 1Michael S. Gutter, Selena Garrison, Brent Litchfield, and Lisa Leslie2

Introduction For most people, their largest single investment is usually the home where they reside. One thing that most families don’t realize is how to use this investment of equity in their house to help fund their retirement. You could sell your house and use those funds for retirement, but an obvious problem you would run into is that you still need a place to live during your retirement. This would also mean that a family home would no longer be in the family and would not be in the estate. Most of the money earned from selling your house would then have to be turned around and used to either buy or rent a new house. Another option is to take out a loan against your house, such as a home equity loan or a home equity line of credit. Unfortunately with this option, you would be required to make monthly loan repayments and pay interest on your loan. One last option that you have is to use a reverse mortgage.

Is a Reverse Mortgage a Loan?
Yes. A reverse mortgage is a loan that allows a homeowner to receive cash on some of the equity in their home in the form of tax-free cash flows. It is different from a home equity loan because reverse mortgages do not require payment while the borrower lives in the home and maintains it as the borrower’s primary residence. While this option may be very good for some people, reverse mortgages are not right for everyone. As with every decision we make, it is important to weigh the pros and cons.

There is no income requirement for applying for a reverse mortgage. Instead of making monthly payments, you receive them. However, the amount that you owe continually grows larger with each payment received. The interest charged is added to the outstanding loan balance each month. Because of this, reverse mortgages reduce home equity, leaving fewer assets for heirs. Some people may use life insurance to offset this loan. One concern is that someone may end up owing more than the house is worth because of decline in its value. Borrowers and their estates are protected by the “nonrecourse” clause. This clause, found in most reverse mortgages, prevents the homeowner or the heirs from being responsible for more than the value of the home when the loan is being repaid.

One of the most appealing characteristics of reverse mortgages is the fact that the loan requires no repayment during the lifetime of the borrower. However, the loan could be required to be repaid in full, including all interest and other charges, when the last living borrower dies, or the borrower rents or sells the home or part of the home, permanently moves away, takes out new debt on the home, adds a new owner to the home’s title, or changes the home’s zoning. Although you may owe a sizable amount of your equity when you use a reverse mortgage, most lenders won’t want your house when the loan is due. They’ll just want their money back plus interest. Your heirs could pay back the reverse mortgage using a standard mortgage, or they could sell the house and use the proceeds to pay off the loan.

Another important thing to remember is that you are still the owner of your home when you get a reverse mortgage. This means that you are still responsible for property taxes, insurance, and repairs. This is an important consideration because if you fail to carry out these homeowner responsibilities, your loan could become due and payable in full.

RequirementsYou might be wondering at this point what the requirements are for applying for a reverse mortgage. To qualify for a reverse mortgage, you must:

Be at least 62 years of age
Own the property that the reverse mortgage is tied to
Live in the property as your principal residence
Have substantial home equity
Not have another loan or mortgage on your house, or be willing to pay it off either before or immediately after obtaining a reverse mortgage
Not be delinquent of federal debt such as back taxes
Meet with an approved counselor to discuss eligibility requirements, financial implications, alternatives, and provisions. It would be wise to research reverse mortgages before the counseling session so you can prepare your list of questions ahead of time.

All owners of the home must apply for the mortgage and sign the loan papers. For example, if you and your spouse both own your home and are both over 62 years of age, both of you have to apply for the mortgage and sign all of the loan papers in order to qualify.

The property must meet one of the following requirements:

Single family house
2–4 unit home with one unit being occupied by the borrower(s)
HUD-approved condominium
Manufactured house that meets Federal Housing Administration (FHA) requirements

Who Should Consider a Reverse Mortgage?Someone planning to remain in their primary residence during retirement
Someone who lost more than they could sustain in the market and needs to have additional cash flow production

Who Should Not Consider a Reverse Mortgage?Someone not comfortable with the risks
Someone wishing to keep a home in the family
Someone who thinks they are not likely to remain very long in their home after taking out a reverse mortgage

Cost Considerations of Reverse Mortgages
As stated previously, reverse mortgages are a way for homeowners to take equity out of their home, yet remain in the home. However, this type of loan is likely to be more expensive than other types of loans such as home equity loans or lines of credit. The fees and upfront costs associated with a reverse mortgage are likely to be especially expensive for a homeowner who stays in the home only a few years. Alternatively, a homeowner who remains in the home for a long time may find they have little home equity left to tap for emergencies, home maintenance, or if a move to assisted living is needed. Due to the high costs and reduced equity, homeowners should think carefully before using this type of loan to finance nonessentials, and possibly consider consulting a professional financial advisor who can review their situation.

Alternatives to Reverse Mortgages
When considering reverse mortgages, a consumer should also consider alternative options. Would it be more cost-effective to sell the home and downsize to something smaller? If a reverse mortgage is being considered for reasons such as home repairs or delinquent taxes, is there a possibility of assistance from local or state agencies? Would a home equity loan or line of credit be a less expensive option? Is there a good chance that the home’s equity will be needed for another purpose? Is there enough information; do you still have questions? Are there things that you don’t fully understand when it comes to reverse mortgages? If you answered “yes” to any of the above, a reverse mortgage might not be your best choice. You should continue to research your individual options, and possibly seek professional advice.

Types of Reverse Mortgages
Reverse mortgages are categorized as either Public Sector Loans or Private Sector Loans.

Public Sector Loans: Offered by state and local governments; generally must be used for specific purposes, such as paying for home repairs or property taxes. These loans typically have lower costs and therefore give higher cash benefits. Public sector loans consist of two types, single-purpose loans and HECMs.

Single-purpose reverse mortgages are offered by some state and local agencies and some non-profit organizations. According to the AARP, single purpose reverse mortgages usually have the lowest cost structure, and are only available to low to moderate income homeowners. This type of loan can only be used for a specified purpose, such as home improvements or property taxes.

Home Equity Conversion Mortgages (HECMs) are federally insured reverse mortgages that are guaranteed by the U.S. government through HUD (U.S. Department of Housing and Urban Development), which is responsible for developing and enforcing housing policy. HECMs are allowed to be used for any purpose the borrower desires. HECMs are the most popular reverse mortgage, and consist of roughly 90% of all reverse mortgages. These loans typically allow larger loan advances and are best used with houses worth less than $400,000.

HECM Saver is a newer version of the HECM Standard designed to lower upfront costs, which have been deemed burdensome by many older families. It can eliminate the upfront mortgage insurance premium. In order to balance the risk being assumed, the HECM Saver option will also reduce the amount that can be borrowed by up to 18%.

Private Sector Loans: Offered by banks, mortgage companies, and savings associations; can be used for any purpose. Private sector loans come in the form of proprietary loans.

Proprietary reverse mortgages are private loans backed by the companies that develop them. Proprietary reverse mortgages may offer larger home value limits to borrowers, but tend to be more expensive. If your home is worth more than the $625,500 HECM loan limit (as of 2009), this type of loan could give you larger cash advances. Like HECMs, proprietary loans can be used for any purpose.

The differences in available loan amounts can vary greatly between plans, and the amount of cash you can get depends on the specific reverse mortgage plan or program you select.

Reverse Mortgage Fees and Interest
It is important to recognize that there are some costs associated with getting a reverse mortgage. Because of the way that reverse mortgages are structured, they are most expensive in the early years of the loan, and then become less costly afterwards. This means that the cost may be very high up front, but lessens the longer you have the loan.

Total Annual Loan Cost (TALC) disclosure statements are given by lenders to evaluate the average annual costs of a reverse mortgage and can be used to help a buyer compare different mortgages. In general, costs are the highest when a borrower only lives in the home a short time after receiving the loan. It usually benefits the borrower to keep the loan for longer durations, which allows the fees to be depreciated out over the course of the loan. Keep in mind though, that like all loans, the longer a loan is held, the longer the interest compounds. You should figure out if and when a reverse mortgage best suits you before meeting with a lender.

Keep in mind that although the IRS does not generally consider loan advances to be income, the possible tax implications of sales might impact the homeowner’s heirs. The loan may also impact Supplemental Security Income. In addition, getting a reverse mortgage might impact Medicaid benefits if the funds come in a lump sum or if you let the funds accumulate in a savings or checking account for a while. You should look into how a reverse mortgage would impact your situation before applying for one.

Fees
There are quite a few fees associated with reverse mortgages that you should be familiar with. Most fees can be financed as part of the loan. There are two main fees unique to reverse mortgages: the origination fee and the mortgage insurance premium.

Origination Fee: The upfront fee charged by the reverse mortgage lender to initiate the loan. For the HECM, the origination fee is 2 percent of the maximum loan amount up to $200,000, and 1 percent on the remainder of the loan amount. However, the origination fee cannot be less than $2,500 or more than $6,000, no matter the loan amount.

Mortgage Insurance Premium (MIP): Protects the borrower. HUD has guidelines that require all HECM reverse mortgage borrowers to receive reverse mortgage insurance, which guarantees two things. First, it guarantees that you will continue to receive benefits no matter what happens to your investor. If your lender suddenly goes out of business or leaves for any other reason, the government would step in and pay the loan payments. Second, MIP ensures that you will never owe more than the value of the home, even if the value of your house declines, or you occupy the home longer than expected. The Mortgage Insurance Premium is 2 percent of the home’s value, with a home value limit of $625,500, and an annual premium of 1.25 percent of the loan balance.

In addition to these two fees, there are all the other fees that are normally associated with any mortgage.

Application Fee: Banks usually charge this fee to determine your ability to take on new credit, check your credit score, and process your mortgage application.

Appraisal Fees: Paid to have an expert estimate the market value of your home. This fee is usually unavoidable because it is required every time a house is sold.

Third Party Closing Costs: Covers services that are required before the reverse mortgage can be finalized; includes such things as appraisals, title searches, surveys, inspections, mortgage taxes, and credit checks, as well as others.

Servicing Set-Aside Fee: Used to cover the future costs of services, such as account statements, paying out loan income, and checking that loan requirements are being kept. Typically these fees are between $20 and $35, and are capped by the federal government at $30 if the interest rate is annually adjusted and at $35 if the interest rate is adjusted monthly. The Servicing Set-Aside is not added to the principal of the loan initially, but is applied to the loan balance on a monthly basis throughout the loan.

Interest
Like all loans, there is interest charged on a reverse mortgage. While you should always try and minimize fees, interest is going to be the largest cost in a reverse mortgage. Luckily, no matter how much interest is accumulated, you will never be required to pay back more than the value of the property. Borrowers should become familiar with the following terms:

Index Base Rate: The index base rate is the benchmark index on which the mortgage rate is based. The benchmark would be one of several published financial indices. This rate differs and changes over time. HECMs are usually based off of the 1-year Treasury bill rate.

Margin: The profit margin is the difference between the rate being charged and the index base rate. The margins for HECMs are determined by law. HECMS usually are set at a 3.1 percent margin for annually adjustable loans and 1.5 percent for monthly adjustable reverse loans.

Interest Rate Caps: This is the maximum margin that the lender can charge. This maximum may or may not be reached during the course of the loan. HECMs set the index rate cap for annually adjustable loans at 5 percent higher than the initial fully indexed rate, and set the cap for monthly adjustable loans at 10 percent higher than the initial fully indexed rate.

Periodic Rate Adjustments: These are the changes made to the index base rate during the course of the loan. These adjustments are usually done annually, monthly, or bi-monthly. The maximum that can be applied to annually adjustable loans is 2 percent. The maximum for monthly adjustable loans is the current T-Bill rate plus margin (typically 1.5 percent).

LimitationsThe amount of equity a homeowner can access is determined by several factors:

Age: Older homeowners can borrow more money, while younger borrowers are required to borrow less.

Value: Appraised value of the home and the amount of equity within the home.

Interest rate: The higher the interest rate, the lower the available balance.

Fees: Fees directly lower the amount you will be able to receive.

Distribution type: In general, a line of credit gives you the highest loan amount, and lump sum gives you the lowest, with the other three falling somewhere in the middle. For more information on distributions, scan ahead to the next section.

The factors above, as well as others such as the lender and loan type, all come into play to determine the upper limit for your reverse mortgage amount. Keep in mind that the maximum loan amount for any reverse mortgage is $625,500. To get a rough estimate of what you can expect from a reverse mortgage, check out the calculator at https://www.newretirement.com/Services/Reverse_Mortgage_SaverCalculator_ZipFirst_Call_PS_Lv11.aspx?nr_vk=Q4UZXNMGMH68&nr_product=revmort&nr_a=OCOT&nr_placement=SNDOCOTSIWISTI_EESQ &nr_medium=Affilate&utm_medium=Affiliate&utm_source=OCOT&utm_campaign=OCOTSNEESSQ.

Distribution Types
You can be paid in one lump sum, on a regular monthly basis, as a line of credit, or at times and in amounts that you choose. These rates are determined by the amount of equity in your home and by the interest rate applied to the reverse mortgage. Your estate will pay the money back (plus interest) in the event you die, or sell or move out of your home. The types of distributions are tenure, term, line of credit, modified tenure, and modified term. Tenure gives you equal monthly payments until the last living borrower dies or moves out of the house. Term pays out equal monthly payments for a specified number of months. Line of credit is paid in installments, at times and in amounts of your choosing until your credit limit is exhausted. Modified tenure is a combination of tenure and line of credit, and modified term is a combination of term and line of credit.

Right of Rescission
Under provisions of the Truth-in-Lending Act, borrowers have up to three business days following the signing of a reverse mortgage to cancel the transaction. This is called the “right of rescission.” Business days include Saturday, but not Sunday or legal holidays. To cancel, you must do so in writing, using the proper form given by your lender. The letter must be delivered before midnight of the third business day. Notification of cancellation in person or over the phone will not work, only a written letter of cancellation will actually cancel the transaction.

Beware of Unscrupulous Offers
The Federal Deposit Insurance Corporation (FDIC) warns that some unscrupulous individuals or companies have promoted reverse mortgages that were not in the consumers’ best interest or involved extra payments for unnecessary services. For example, there have been reports of companies attempting to sell questionable home repairs or investments in connection with a reverse mortgage. One problem with using any loan product to fund an investment is that you could lose money on the investment and still owe on the loan.

Beware of firms that want to give you the name of a lender for a “small percentage” of a reverse mortgage loan. The U.S. Department of Housing and Urban Development (HUD) does not recommend using an estate planning service or any service that charges a fee just for referring a borrower to a lender—HUD provides this information without cost. HUD-approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and free referral to a list of HUD-approved lenders.

Call 1-800-569-4287, toll-free, for the name and location of a HUD-approved housing counseling agency near you. You can always call your local UF/IFAS Extension office for more information (http://solutionsforyourlife.ufl.edu/map).

References and ResourcesAARP. (2003). Basic loan features. [Online]. Retrieved from http://www.aarp.org/money/credit-loans-debt/info-2003/basicloanfeatures.html.

—–. (2008). Reverse mortgage loans: Borrowing against your home. [Online] Retrieved from http://assets.aarp.org/www.aarp.org_/articles/money/financial_pdfs/hmm_hires_nocrops.pdf and available at: Reverse Mortgages, Reverse Mortgage Education Program | AARP.org (n.d.). [Online]. http://www.aarp.org/money/credit-loans-debt/reverse_mortgages/.

Eldervantage, LLC and ReverseMortgagePage.com. (2006). Reverse mortgage—What if one spouse is under 62? [Online]. Retrieved from http://www.reversemortgagepage.com/2008/11/what-if-one-spouse-is-under-62/.

eXtension. (n.d.). What frauds do I need to be aware of with reverse mortgages? FAQ #4854 | eXtension.org [Online]. Retrieved from http://www.extension.org/faq/4854.

FDIC. (Spring 2008). Money tips for all ages, after you retire: Managing your expenses on a fixed or reduced income. Consumer News – Special Edition. [Online]. Retrieved from http://www.fdic.gov/consumers/consumer/news/cnspr08/expenses.html.

Federal Trade Commission. (April 2009). Reverse mortgages: Get the facts before cashing in on your home’s equity. [Online]. Retrieved from http://www.bbb.org. Available at http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea13.shtm.

Kaplan, H. (2008). Reverse mortgages revisited. Partners in Community and Economic Development, 18 (3), 14–16. Atlanta, GA: Federal Reserve Bank of Atlanta—reprinted by permission, with updates, from the spring 2008 issue of Bridges, a Community Development newsletter published by the Federal Reserve Bank of St. Louis. [Online at FRBAtlanta.org]. Retrieved from http://www.frbatlanta.org/filelegacydocs/Partnersv18n3.pdf.

Lafleur, D.P. (Winter 2008). Supervisory Insights, 5(2), 14–20. [Online]. Retrieved 1/08/09 from http://www.fdic.gov/regulations/examinations/supervisory/insights/siwin08/si_win08.pdf.

Moore, C. (n.d.). Pros and cons of reverse mortgages | Bankrate.com. [Online]. Retrieved from http://www.bankrate.com/brm/news/mortgages/20070104_reverse_mortgage_a1.asp.

New Retirement, LLC. (n.d.). Comparing reverse mortgages: Reverse mortgage fees and rates | NewRetirement.com. [Online]. Retrieved from http://www.newretirement.com/Services/Reverse_Mortgage_Fees.aspx.

Porter, N. M., & Schneider, M. R. (2007). Is a reverse mortgage right for you? FL 533. Clemson, SC: Clemson University Cooperative Extension Service. [Online]. Retrieved from http://www.clemson.edu/psapublishing/Pages/FYD/FL533.pdf.

ReverseMortgage.net. (February 28, 2008). What is the difference between a mortgage and a reverse mortgage? [Online]. Retrieved from http://www.reversemortgage.net/mortgage-vs-reverse-mortgage/.

—–. (April 17, 2008). What kinds of reverse mortgage plans are there? [Online]. Retrieved from http://www.reversemortgage.net/what-kinds-of-reverse-mortgage-plans-are-there/.

—–. (April 26, 2008). Alternatives to obtaining a reverse mortgage. [Online]. Retrieved from http://www.reversemortgage.net/alternatives-reverse-mortgage/.

U.S. Department of Housing and Urban Development. (n.d.). About reverse mortgages for seniors (HECM) – HUD / FHA reverse mortgages (HECMs) for consumers | HUD.gov. [Online]. Retrieved from http://www.hud.gov/offices/hsg/sfh/hecm/hecmabou.cfm.

Footnotes
1. This document is FCS3305, one of a series of the Department of Family, Youth and Community Sciences, UF/IFAS Extension. Original publication date: October 2009. Latest revision: July 2013. Visit the EDIS website at http://edis.ifas.ufl.edu.

2. Michael S. Gutter, associate professor and family financial management specialist; Selena Garrison, graduate student; Brent Litchfield, undergraduate student; Lisa Leslie, UF/IFAS Extension agent, UF/IFAS Extension Hillsborough County; Department of Family, Youth and Community Sciences; UF/IFAS Extension, Gainesville, FL 32611.

The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other UF/IFAS Extension publications, contact your county’s UF/IFAS Extension office.

U.S. Department of Agriculture, UF/IFAS Extension Service, University of Florida, IFAS, Florida A & M University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Nick T. Place, dean for UF/IFAS Extension.

LOCAL INFO • Market Updates • Sellers • June 22, 2022

FIRPTA – Foreign real estate owners …..

by Gina Larouche

Excellent FIRPTA Overview

IRS FIRPTA info

Video

FIRPTA WithholdingWithholding of Tax on Dispositions of United States Real Property InterestsThe disposition of a U.S. real property interest by a foreign person (the transferor) is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding. FIRPTA authorized the United States to tax foreign persons on dispositions of U.S. real property interests.

A disposition means “disposition” for any purpose of the Internal Revenue Code. This includes but is not limited to a sale or exchange, liquidation, redemption, gift, transfers, etc. Persons purchasing U.S. real property interests (transferees) from foreign persons, certain purchasers’ agents, and settlement officers are required to withhold 15% (10% for dispositions before February 17, 2016) of the amount realized on the disposition (special rules for foreign corporations).

In most cases, the transferee/buyer is the withholding agent. If you are the transferee/buyer you must find out if the transferor is a foreign person. If the transferor is a foreign person and you fail to withhold, you may be held liable for the tax. For cases in which a U.S. business entity such as a corporation or partnership disposes of a U.S. real property interest, the business entity itself is the withholding agent.

U.S. Real Property InterestA U.S. real property interest is an interest, other than as a creditor, in real property (including an interest in a mine, well, or other natural deposit) located in the United States or the U.S. Virgin Islands, as well as certain personal property that is associated with the use of real property (such as farming machinery). It also means any interest, other than as a creditor, in any domestic corporation unless it is established that the corporation was at no time a U.S. real property holding corporation during the shorter of the period during which the interest was held, or the 5-year period ending on the date of disposition (applicable periods).

An interest in a corporation is not a U.S. real property interest if:

-Such corporation did not hold any U.S. real property interests on the date of disposition,
-All the U. S. real property interests held by such corporation at any time during the shorter of the applicable periods were disposed of in transactions in which the full amount of any gain was recognized, and
-For dispositions after December 17, 2015, such corporation and any predecessor of such corporation was not a RIC or a REIT during the shorter of the applicable periods during which the interest was held.

Rates of WithholdingThe transferee must deduct and withhold a tax on the total amount realized by the foreign person on the disposition. The rate of withholding generally is 15% (10% for dispositions before February 17, 2016).

The amount realized is the sum of:

-The cash paid, or to be paid (principal only);
-The fair market value of other property transferred, or to be transferred; and
-The amount of any liability assumed by the transferee or to which the property is subject immediately before and after the transfer.

If the property transferred was owned jointly by U.S. and foreign persons, the amount realized is allocated between the transferors based on the capital contribution of each transferor.

A foreign corporation that distributes a U.S. real property interest must withhold a tax equal to 35% of the gain it recognizes on the distribution to its shareholders.

A domestic corporation must withhold tax on the fair market value of the property distributed to a foreign shareholder if:

-The shareholder’s interest in the corporation is a U.S. real property interest, and
-The property distributed is either in redemption of stock or in liquidation of the corporation.

For distributions before February 17, 2016, the corporation generally must withhold 10% of the amount realized by a foreign person. For distributions after February 16, 2016, the rate increases to 15%.

Exceptions from FIRPTA withholding
Reporting and Paying Tax on U.S. Real Property Interests
Withholding Certificates
Format for Applications
Definitions of terms and procedures unique to FIRPTA

For additional information on the withholding rules that apply to corporations, trusts, estates, and REITs, refer to section 1445 of the Internal Revenue Code and the related regulations. For additional information on the withholding rules that apply to partnerships, refer to discussion under partnership withholding. Also, consult the “U.S. Real Property Interest” section in IRS Publication 515.

FIRPTA documents are processed at:

Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409.

Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.

Page Last Reviewed or Updated: 03-Feb-2017

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Foreign Nationals and FIRPTA
http://www.kbgrp.com/articles/international-tax/foreign-nationals-and-firpta.html

January 21, 2016

When a foreign person sells U.S. real estate, he or she is subject to having 15% of the gross sales price withheld from the proceeds received at closing. This is a requirement under the Foreign Investment in Real Property Tax Act, known as FIRPTA. This 15% withholding must be remitted to the Internal Revenue Service (IRS) no later than 20 days after closing. Prior to February 17, 2016, the withholding rate was 10%.

The 15% withholding has no relation to the amount of tax actually owed on the sale. It is merely a deposit that is applied against the actual tax. The actual tax is calculated on the U.S. income tax return required to be filed to report the sale. The amount of withholding is compared to the actual tax on the sale. If the tax is less than the withholding, the difference is refunded to the seller. If the tax is more than the withholding, the seller must pay the difference to the IRS.

There are exceptions to this general rule. No withholding is required if the sales price is $300,000 or less and the buyer (including family members) intends to use the property for personal purposes as a residence for at least 50% of the time the property is in use for the next two 12-month periods following the transfer. The days the property is unoccupied are excluded in the 50% calculation. Vacant land is specifically not eligible for this treatment, even if the buyer intends to build a residence on the property. In order for the exemption to apply, the buyer must be an individual, as opposed to a partnership, corporation, estate or trust.

For example, a foreign person sells U.S. real estate for $250,000. The buyer intends to rent out the property for three months of the year and use it personally for four months of the year. The property will be vacant for the remaining five months of the year. In this example, the property is in use for seven months of the year. Since the buyer intends to use the property for personal purposes for four months out of the seven months that the property is in use, this meets the 50% test. If this is the intent of the buyer for at least two years following the purchase of the property, the seller will be exempt from the 15% withholding requirement, as long as the buyer signs an affidavit, under penalties of perjury, that he or she meets the conditions for the exemption. Even though the seller is exempt from the withholding, he or she must still file a U.S. income tax return to report the sale and pay any income taxes that apply.

If the sales price exceeds $300,000, no exemption from withholding is available regardless of the intended use of the property by the buyer. Withholding is mandatory on any sale in excess of $300,000, whether the sale results in a profit or a loss.

The FIRPTA rules allow for a reduction of the 15% withholding rate, bringing it back to the prior 10%, if certain criteria are met. To meet the criteria, the sales price cannot exceed $1,000,000 and, just like for the exception to FIRPTA withholding, the buyer must intend to use the property as a residence. As guidance from the Internal Revenue Service is lacking at this time, our interpretation is that the term “residence” is defined in the same manner as for the exception to the withholding described above.

If the actual tax on the transaction is significantly less than the withholding, the seller may apply for a withholding certificate from the IRS. This withholding certificate allows for an amount of less than 15% of the gross sales price to be withheld from the closing proceeds. Let’s take the example where a property is being sold for $500,000, but the seller had previously purchased the property for $600,000. The seller will incur a loss on the sale and, therefore, no tax will be payable on the transaction. The seller is still subject to a withholding of $75,000 on the sale. The seller may submit an application to the IRS showing evidence that the transaction will result in a loss. This application must be submitted to the IRS no later than the date of closing. Otherwise, the 15% will have to be sent to the IRS no later than 20 days after closing. Once the application has been submitted, it generally takes the IRS 90 days to issue the withholding certificate. The withholding certificate will state that withholding on the sale has been reduced to zero. Therefore, closing can take place without withholding.

Due to the 90 day time lag between the filing of the application and the issuance of the withholding certificate, many times the closing will take place before the withholding certificate is issued. In this case, the closing takes place and the withholding is deducted from the closing proceeds. Instead of remitting the withholding to the IRS no later than 20 days after closing, the closing agent is authorized to hold the funds in escrow until receipt of the withholding certificate. Once the withholding certificate is received, the closing agent will remit the lower withholding amount, if any, and release the balance of the funds directly to the seller.

The decision of whether or not to apply for a withholding certificate to reduce the withholding depends on the particular circumstances of the sale. Factors to consider are the amount of actual tax compared to the amount of withholding and the timing of the sale. Individuals are on a calendar year reporting for income tax purposes. If the sale takes place in January, the seller must wait until the following January to apply for the refund via the filing of an income tax return. By the time the refund is received, this could be at least 14 months after the sale. Depending on the amount of the overpayment, it could be advisable to apply for the reduced withholding through the filing of the withholding certificate application. If the same sale took place in December, the tax return could be filed shortly thereafter and the refund obtained within a few months after closing. In this case, there would be less reason to apply for the reduced withholding.

In the case of a short sale, where the sales proceeds are insufficient to pay the mortgage balance, the withholding rules still apply. The only exception is if the sales price is $300,000 or less and the buyer meets the criteria for the exception as explained above. The only other alternative is to request a withholding certificate from the IRS. Otherwise, it is doubtful that the lender would approve the sale as any withholding would reduce the amount paid to the lender at closing.

Since every situation is unique, we are happy to advise you on the options available to you in complying with this requirement on the sale of your property.

Sarasota Office
1990 Main Street, Suite 801
Sarasota, FL 34236
Office: 941 – 365-4617

LOCAL INFO • Market Updates • Sellers • June 22, 2022

FEMA 50% Rule Substantial Improvement/Damage

by Gina Larouche

FEMA 50% Rule Substantial Improvement/Damage

March 23, 2018. – Berlin Patten Ebling

Blog Post LINK

“Sarasota in the 1950s was one of the most important places in the world for architectural creativity, where the greatest design movements of the day came together.”- Carl Abbott FAIA, original member of the Sarasota School of Architecture

Fortunately for us, there has been a welcome surge in the restoration and renovation of many of our area’s significant historic properties. So much so that I routinely am asked questions about the “50/50 rule or that FEMA thing”. In fact, I received a text message this morning from a great realtor friend of mine inquiring into the “FEMA 50/50 rule for adding an addition.” When thinking about how to respond, I immediately thought that this would be a great blog topic…two birds – one stone!

The following are examples of commonly asked questions and the corresponding short answers with respect to the FEMA 50% Rule:

What is the FEMA 50% Rule? To put it simply, it limits the cost of improvements (additions, alterations, and/or repairs) to non-conforming structures (structures that are below the base flood elevation) to less than 50% of the “market value” of the structure prior to the start of work.

What is a “non-conforming structure”? FEMA identified areas that are at higher risk for periodic flooding and determined the minimum lowest floor elevation for structures in these areas. Even though there are exceptions, most structures that were built before 1975 are non-conforming.

How is “Market Value” determined? Market Value is based on the value of the primary structure before the start of the improvement or before the damage occurs. The value of site improvements such as pools, accessory structures, and landscaping are not included in determining the Market Value. The Market Value can be either determined by the adjusted Property Appraiser’s assessed improvement value or through an appraisal prepared by a qualified professional appraiser. The appraised value of the structure less the value of all forms of depreciation is the Market Value.

What if the cost of improvement or repair exceeds 50% of market value? Improvements or repairs the cost of which exceed 50% of the Market Value are classified as a substantial improvement. A nonconforming structure that is substantially improved is required to conform with the requirements for new construction including elevating to the required minimum elevation. As you can imagine, this process can be extremely expensive and could result in having to demolish the existing structure.

Can a single improvement be divided into multiple permits? Utilizing multiple permits to complete a single improvement is referred to as “phasing”. If the sum of the permits exceeds 50% of the market value of the structure prior to the initial start of work the structure is considered substantially improved and it would have to made compliant with current elevation requirements.

While the surge in the restoration and renovation of non-conforming properties is certainly an important aspect in preserving Sarasota’s amazing architectural history, it is imperative that homeowners and/or homebuyers understand the requirements for improving their existing home or a newly acquired home prior to commencement of any construction! Homebuyers and their agents should be extremely diligent when buying and/or selling property that is deemed to be below the base flood elevation. If the home is below the base flood elevation, the parties should be requesting an assessed marked value of the improvement and they should factor the potential cost or limitations of any new renovation prior to the end of their due diligence period.

Should you have any questions regarding the foregoing, we urge you to consult with your real estate attorney.

Sincerely,

Berlin Patten Ebling, PLLC

Article Authored by William C. McComb, Esq. wmccomb@berlinpatten.com

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

www.berlinpatten.com

SARASOTA

3700 South Tamiami Trail, Suite 200, Sarasota, FL 34239 P (941) 954-9991 F (941) 954-9992

VENICE

247 Tamiami Trail South, Suite 201, Venice, FL 34285 P (941) 955-9991 F (941) 484-9992

LAKEWOOD RANCH

8130 Main Street, Suite 206, Lakewood Ranch, FL 34202 P (941) 907-9022 F (941) 907-9024

LOCAL INFO • Market Updates • June 22, 2022

2018 OCT- Sarasota & 2 other Fla. cities top U.S. News & …

by Gina Larouche

NEW YORK – Oct. 23, 2018 –

The top recommendation for a U.S. retirement? Lancaster, Pa. But three Florida cities – Fort Myers, Sarasota and Lakeland ranked in the top 10.

Fort Myers took the No. 2 spot in U.S. News & World Report’s 2019 list of the “100 Best Places to Retire in the USA.” According to this year’s review, Lancaster’s housing affordability and residents’ high rank for happiness helped it to bump Sarasota, Fla., from the number one position that it held last year.

Sarasota was ranked as the third top spot for retirement in 2019, but a non-coastal Florida city, Lakeland, held down the No. 10 spot.

To come up with a ranking, U.S. News & World Report evaluated the country’s 100 largest metro areas to see how well they met retirees’ expectations, such as in housing affordability, desirability, health care and overall happiness.

“Deciding where to retire is a big decision,” says Emily Brandon, senior editor for retirement. “The ‘Best Places to Retire’ offers a way for future retirees to make a more informed decision based on what matters the most to them. Whether that be housing affordability, access to quality hospitals, or the desirability of a place in general, the rankings offer a comprehensive list that can point people in the best direction for their needs.”

2019’s top 10 best places to retire:

Lancaster, Pa.
Fort Myers, Fla.
Sarasota, Fla.
Austin, Texas
Pittsburgh
Grand Rapids, Mich.
Nashville, Tenn.
San Antonio
Dallas-Fort Worth, Texas
Lakeland, Fla.

Source: “100 Best Places to Retire in the USA,” U.S. News & World Report (October 2018)

LOCAL INFO • June 22, 2022

2018 – The Bay ! …. Great Public Park Project ….

by Gina Larouche

The Bay ! Sarasota’s newest Public Park Design, has been Approved !

The Bay Sarasota has produced a finalized plan for redeveloping the land around the Van Wezel Performing Arts Hall.
by: David Conway Deputy Managing Editor – The Observer

The Bay Sarasota, the independent group that’s worked to create a community-driven vision for redeveloping more than 50 acres of city-owned bayfront land, has completed a finalized version of its proposed master plan for the property.

Representatives for Sasaki, the planning firm working with The Bay, outlined the proposal at a pair of meetings at the Van Wezel Performing Arts Hall today. The presentations discussed how the project was intended to enhance the cultural vitality of the site, provide expanded public open space, improve connectivity to other parts of the city and offer an economically and environmentally sustainable long-term strategy for managing the land.

Gina Ford, Sasaki’s lead planner on the project, detailed the core components of the master plan proposal. A new performing arts facility would house the Van Wezel’s programming, though the existing Van Wezel building would be preserved for some new use. A two-level parking garage would be built to reduce the footprint of surface parking on the site. A park would be built above the garage, located near a “destination” children’s play area.

This drawing showcases The Bay’s master plan concept for more than 50 acres of city-owned bayfront land.
A wishbone-shaped structure would extend over the northwest corner of the site — a distinct architectural feature the group has tentatively nicknamed “the arc.” The pedestrian structure would extend over the water at both ends, rising from a pier at the south terminus to a raised overlook at the north.

The plan emphasizes the site’s connection to the water. Near Tenth Street, there’s a waterfront “canal district” lined with restaurants, relocating the existing boat ramp to the north. A waterfront boardwalk cuts beneath the arc.

The canal district would include bay views and short-term spaces for boaters to dock and dine.
The south end of the site is defined by a “recreation pier,” which could include another waterfront restaurant. Mangroves line the edge of an inlet on the south side, and a kayak launch would provide opportunities for water recreation. New pedestrian bridges would allow visitors to travel from the south end of the site to the north along the bay.

The plan includes three pedestrian bridges above U.S. 41, linking the bayfront site to the east. Those bridges are located near 14th Street, Tenth Street and Boulevard of the Arts. Ford said these bridges are not only supposed to get people to the site, but also to stand out as distinct architectural works on their own.

The east end of the site close to U.S. 41 preserves most of the existing buildings, including the Municipal Auditorium and Art Center Sarasota, in an improved “cultural district.” Some existing tenants, including the Sarasota Lawn Bowling Club, and existing buildings, including the GWIZ science center, are not included in the plan. Bill Waddill, The Bay’s managing director, said the group would work to help find a new home for groups such as the lawn bowling club.

The cultural district would include enhanced landscaping and a promenade to connect the existing structures and new arts-focused buildings.
Another group that doesn’t have a defined home in the latest master plan? The Sarasota Orchestra, whose future on the bayfront appears to be in question. In a previous interview, Sarasota Orchestra President and CEO Joseph McKenna said the organization is still in the process of evaluating its future needs.

Today, Waddill said the orchestra is debating whether to stay on the bayfront or search for a new location elsewhere in the city. For now, the master plan identifies a “potential future cultural venue” where Holley Hall is currently located.

The plan could cost between $100 million and $150 million to implement, and that’s before including the expenses associated with a new performing arts venue. Once it’s built, estimates peg the annual maintenance costs at $4 million to $6 million per year.

The Bay representatives said the plan is to build out the site over the course of decades. They’ve already identified a potential first phase, though: the recreation pier at the south end of the site. That portion of the project could cost $10 million to build and $1 million to $2 million to maintain annually. If the city adopts the master plan, Ford said the group hopes it could develop a segment of that recreation pier — a “Phase 1A” — in about a year.

The recreation pier would include flexible space for events and activity.
The Bay also outlined a proposed structure for managing the site in the future. The group called for the creation of a nonprofit conservancy to operate the site, relying on a mix of public and private resources to offer enhanced maintenance and specialized oversight on the bayfront. The city would help develop the terms of an agreement with the conservancy, The Bay said.

The full presentation is available on The Bay’s website.

At the 11 a.m. meeting at the Van Wezel, representatives for The Bay fielded questions about the plan — and the logistics of getting it built. Ford said the feedback she heard today was largely positive, and she was optimistic the group had developed a plan that could become a reality.

“I think we did it,” Ford said. “People are really happy.”

She acknowledged some questions remain unanswered. Later today, The Bay is scheduled to meet with the City Commission alongside the Van Wezel Foundation and the Sarasota Orchestra to discuss the future of the arts venues on the site. The Bay has also set up a working group for boaters as it attempts to address outstanding concerns from those who use the Tenth Street Boat Ramp.

The Bay has two more public presentations scheduled for Tuesday at the Municipal Auditorium. Even though the master plan is nearing a final state, The Bay intends to continue to gather community feedback and potentially adjust the proposal ahead of a scheduled Sept. 6 presentation to the City Commission.

The group hopes the city will formally adopt the master plan at that meeting. Ford stressed that, even if the proposal was adopted, there would be opportunities to change the master plan as more information becomes available. For now, the goal is to get the community and city leaders to commit to an ambitious vision for the bayfront site.

“It’s a framework, and it’ll continue to evolve as we get feedback,” Ford said. “There’s only so much we can know at any one time. You don’t stop learning, and you don’t stop adjusting the master plan when it’s adopted.”

https://www.yourobserver.com/article/sarasota-bayfront-the-bay-van-wezel-master-plan-final

I’m so happy to see it moving forward, wended something in that parking lot wasteland and now we have it. It will be a Major addition for a lovely city that was severely lacking in another choice for downtown waterfront leisure. Now all we need is a safe walking trail to connect the two, so that Sarasota’s bayfront is a Public Jewel for all to enjoy !

Visit The Bay’s facebook page: https://www.thebaysarasota.org

Market Updates • June 22, 2022

2018 – Sarasota stays on Top of Luxury Market…

by Gina Larouche

Realtor.com: Luxury market picks up speed

SANTA CLARA, Calif. – Sept. 19, 2018 – Luxury home sales continued to break records as prices hit double-digit gains in 20 major counties, according to the realtor.com 2018 Luxury Home Index released today. Additionally, the number of sales at or above the $1 million mark rose 6 percent over last year.

The realtor.com Luxury Home Index analyzes the luxury price tier, defined as the top 5 percent of all residential sales, in 90 U.S. counties.

Demand for luxury homes remains strong
The pace of sales for luxury homes remains strong. The combined median age of inventory in the 90 luxury markets surveyed was 121 days, down nine days or 6.9 percent year-over-year. Additionally, two-thirds of luxury markets are seeing inventory move faster than this time last year.

In 50 of the 90 counties analyzed, the luxury tier currently has an entry point of at least $1 million, while 70 markets continue to see yearly price growth.

“The conditions in the luxury segment are quite different from the market overall – it’s really a tale of two markets,” says Danielle Hale, chief economist for realtor.com. “Although U.S. median listing prices show signs of slowing growth, luxury prices are moving in the opposite direction in many places. For the second consecutive month, we’ve seen more markets with double-digit, entry-level luxury price growth than in the past four years.”

Sarasota stays on top
Since March, Sarasota, Fla. has remained the nation’s fastest-growing luxury market, with sales prices up 21 percent since last June. Half of all luxury homes in Sarasota sold within 165 days – 22 percent faster than the previous year. Queens, N.Y.; Santa Clara, Calif.; Boulder, Colo.; and Naples (Collier County, Fla.) rounded out the top five counties, each seeing yearly price growth between 13 and 15 percent.

Miami’s luxury market starts heating up
Recent trends in Miami’s luxury segment suggest that the luxury entry point could break the $1 million mark for the first time this fall. After declining for 24 months in a row, Miami luxury prices finally saw growth this January and have now reached the highest price gains since July 2015. Miami’s luxury market is currently growing at 2.2 percent year-over-year.

Other surrounding South Florida counties, including Broward, Collier, Lee, and Palm Beach, saw similar declines in recent years, but many of them have outpaced the rest of the country since early last year with yearly price growth between 5 and 13 percent.

Other U.S. markets
Northern California luxury markets continue performing well, with seven counties in the top 20 fastest growing markets, all of which saw double-digit growth in June. San Francisco, Sonoma, and Santa Clara – up 10, 13, and 15 percent, respectively – are showing there is still room for growth. On the other hand, San Mateo, Sacramento, San Luis Obispo, and Santa Cruz are holding steady.

There’s a hot streak in Davidson and Williamson counties, both part of the greater Nashville area, which grew 12 and 11 percent, respectively. Both saw double-digit growth in June, after steadily gaining momentum since 2016. Half of all luxury homes sold in 61 days in Davidson County, putting it among the nation’s 10 fastest-moving luxury markets.

Seattle (King County, Wash.) luxury grew by 13 percent in June compared to the same time last year, pushing its luxury entry point to $1.5 million. This marks Seattle’s 11th consecutive month of growth between 12 and 14 percent. As the market’s growing tech scene funnels in a more affluent crowd, more buyers can afford pricier homes, which may push demand – and prices – higher.

LOCAL INFO • June 22, 2022

2018 TaxWatch: Fla. still a low-tax state – No. 42 out

by Gina Larouche

TaxWatch: Fla. still a low-tax state – No. 42 out of 50

TALLAHASSEE, Fla. – July 19, 2018 – Florida retains its ranking as one of the nation’s lowest-tax states, according to the latest study released by Florida TaxWatch. Out of 50 states, Florida ranks No. 42 in the average amount of money paid by residents.

Florida TaxWatch findings

Floridians pay an average $5,679 per person in state and local taxes
Residents pay an average $2,584 in state taxes – one of the least amounts nationwide. Only the residents of one other state pay less.
However, local tax burdens are higher. “Per Capita Local Tax Collections” ranked No. 27 nationally.
In the balance between state and local taxes, Florida relies more heavily on local revenue than almost all other states and is No. 2 nationwide. Local taxes account for 53.3 percent of the total.
With property taxes, Florida ranks a solid “average” score – No. 25. The state’s per capita property tax ranking is right at the median – 25th.
Florida also classifies 38.7 percent of its state and local revenue as non-tax revenue (such as “fees”) – the 7th largest percentage in the nation.
Florida relies more heavily on transaction taxes, such as general and sales taxes. They make up, 81.5 percent of all state tax collections compared to the national average of 47.2 percent.
Florida has the highest state and local selective sales (excise) taxes on utilities in the nation. The tax on motor fuels is No. 15; the tax on alcoholic beverages is No. 19.
Florida’s housing sector produces significant revenue, and the state’s documentary stamp taxes are rising rapidly post-recession. It collected an average of $276 per capita in 2006, $72 in 2009, and $130 per capita in 2016 – the nation’s second-largest doc-tax burden.
Florida is one of seven states without a personal income tax. The average state relies on personal income taxes for 37.0 percent of its tax revenue.
Businesses pay 51.7 percent of all Florida state and local taxes – the 12th highest percentage in the nation.

The Florida TaxWatch study is posted online.

LOCAL INFO • Market Updates • June 22, 2022

6 Costs Homeowners Overlook and How to Pay for Them…

by Gina Larouche

6 Costs Homeowners Overlook and How to Pay for Them

Source; Posted on Aug 15 2018 – 11:05am By the Experts at Hippo Insurance

For many people, a house is the biggest investment they’ll ever make. And whether you’re a first-time homeowner or you’re buying your third property, you’re bound to end up covering some unexpected expenses. Here are six costs homeowners tend to overlook and how to pay for them:

1. Property taxes
Be prepared to pay property taxes and keep in mind that they rarely decrease. Homeowners often pay them every month along with their mortgage payments. If your loan is backed by the Federal Housing Administration, you’re required to have an escrow or impound account.

If you don’t have to make property tax payments through an escrow account, they may be due at the end of the year. In some counties, you might pay them in installments.

2. Homeowners association fees
Whenever you move into a new home or condominium, you become part of a community. In many cases, there are fees associated with the maintenance and general upkeep of shared common areas. The money collected might cover snow removal, landscaping or repairs to a meeting room.

Monthly homeowners association (HOA) fees for standard single-family homes tend to cost between $200-$300, but rates can vary depending on several factors, including how recently a housing community was built and the kinds of amenities that are available. That’s why it’s best to know how much fees cost upfront. In West Hollywood, Calif., for example, residents in Sierra Towers condos get access to a 24-hour concierge service and valet parking, but spend around $4,000 per month on HOA fees.

3. Insurance premiums
If you own a home, another cost you should include in your budget is insurance. The average annual homeowners insurance premium costs $1,120, according to recent data provided by the National Association of Insurance Commissioners, but the amount you pay may be higher or lower based on where you live and the kind of policy you choose.

Homeowners insurance typically covers personal possessions, liability for injuries that take place on your property, the structure of your house and additional costs associated with living elsewhere if your home is severely damaged. If you live in an area prone to natural disasters, you might need a supplemental policy like flood insurance.

4. Repair and maintenance costs
Repairing or replacing a roof, furnace or air conditioner can be expensive, and at some point, you might have to address plumbing issues or trade in some old appliances.

The cost of home maintenance is another thing you’ll have to factor into the cost of homeownership. You’ll need money to keep your yard, gutters, carpet and everything in between in tip-top shape.

Financial experts generally recommend setting aside 1 percent of your home’s value to cover the cost of unexpected repairs and maintenance. If you’re trying to save money, you’re better off doing some of the work yourself. Just make sure you have enough funds for the materials you need to get the job done.

5. Costs associated with selling a home
Having a home that’s well-maintained not only lets you enjoy your house while you’re living there, but also prevents you from being saddled with additional costs when you’re ready to sell it.

Replacing your roof or furnace might be something you want to put off, but failing to make necessary repairs or meet demands made by potential homebuyers could hurt your market value or cost you a sale.

6. Pest control costs
Pests are a real concern for many homeowners. Over time, all sorts of critters—like termites, ants, spiders and rodents—might invade your home. Depending on how serious the problem is, you might need to fumigate your house.

If you’re interested in buying a home, make sure you hire an inspector to check for bugs and termites that could cause structural damage. While lenders don’t always require homebuyers to pay for pest inspections, it’s important to have one done. You don’t want to close on a house only to find out later that there’s an issue. Termite inspections generally cost between $75-$150, according to Angie’s List.

Build a rainy day fund!
It’s always better to be prepared for a storm than to be caught in a downpour without an umbrella. Despite the high costs, owning your own home can be a rewarding experience.

Hope for the best and prepare for the worst by keeping enough money in your savings account to cover unforeseen costs. Make sure you account for all of the hidden expenses and fees associated with buying a home and budget accordingly.

Hippo is an InsureTech company that’s reimagining home insurance through the lens of homeowners. Hippo Insurance is available to homeowners in 10 states throughout the U.S. and will be available to more than 60 percent of the nation’s homeowners by the end of 2018.

Market Updates • June 22, 2022

2018- Ultra-luxury home market stays hot in Sarasota …

by Gina Larouche

Sales in $5 million-plus range on pace to exceed last year’s mark

The red-hot market for luxury residences in Sarasota-Manatee continues this year after a banner sales season in 2017. The most striking aspect of the increase in sales for $1 million or more comes with the most expensive homes — the $5 million-plus transactions.

As of mid-June, according to the latest data by the Mid-Florida MLS, 11 homes sold in excess of $5 million this year, with most on the barrier islands. All three in Manatee County sit on the north end of Longboat Key.

“I am excited to see that the ultra-luxury market continues to outpace the prior year,” said Joel Schemmel of the Schemmel Property Group with Premier Sotheby’s International Realty. “We have seen a 67 percent increase in sales over $5 million in Sarasota and Manatee counties this year compared to the same period last year.”

Kim Ogilvie, a Realtor with Michael Saunders & Co., agreed. “As I count it, there were 12 sales last year and eight so far this year over $5 million (in Sarasota County),” she said “We’re on track to meet or exceed last year’s numbers.

“At present, I have two properties in the $5 million-plus range with buyers circling and seriously considering,” she said.

Lori Carey of Premier Sotheby’s sold a 19,000-square-foot Venice home on an acre at 600 N. Jackson Road for $8.6 million; Deborah Beacham of MSC sold the 7,400-square-foot Gulf-front Lido Shores residence at 1219 Westway Drive for $7 million, and a bank-owned 9,200-square-foot waterfront home on about an acre at 4011 Shell Road on Siesta Key for $5.675 million.

The Shell Road sale, which closed on Thursday, represents the highest single-family home transaction on Siesta Key this year, said Elise Ramer of Premier Sotheby’s.

Homes: What can you buy for $1 million in Sarasota-Bradenton-Venice?
In late July, Michael Saunders & Co. listing agents Beverly St. Hilaire and Tak Konstantinou sealed the sale of a 10,200-square-foot Mediterranean Revival home at 5060 Gulf of Mexico Drive on Longboat Key for almost $6.9 million — the second-highest sale in Manatee County this year, according to the company’s Samantha Emelock. The residence, known as the Villa de Como, won HGTV’s 2016 “Making an Entrance” sweepstakes.

“This last quarter was quite strong for the luxury market, especially heading into the ‘slower’ months,” Emelock said. “This could very well correlate to Sarasota’s rising prominence as a second-home market for many of the world’s affluent (Christie’s International Real Estate’s Luxury Defined study showed Sarasota as the third-hottest second-home market this year).”

The average for-sale price in the $5 million-plus category from Mid-Florida MLS data compiled by Emelock rose slightly in June to $8.25 million, up 0.7 percent from the previous month’s $8.2 million.

The average sold price per square foot fell to $450 from July’s $1,045, a drop of 57 percent. The price peaked this year in March at $1,162.

“Activity in the luxury sector continues to be positive,” Ogilvie said. “Serious sellers and serious buyers are in the market during the summer in Sarasota.”

Realtor.com’s Luxury Housing Market Index published in July shows a 9.14 percent increase in current luxury sales prices in the Sarasota-Manatee market, surpassing $1.8 million for the first time since the website began compiling data in January 2011.

SOURCE: By Chris Wille Real Estate Editor Posted Aug 6, 2018 at 4:02 PMUpdated Aug 7, 2018 at 12:49 PM

Wire Fraud is Real – Before wiring any money …

Reverse Mortgage ?

FIRPTA – Foreign real estate owners …..

FEMA 50% Rule Substantial Improvement/Damage

2018 OCT- Sarasota & 2 other Fla. cities top U.S. News & …

2018 – The Bay ! …. Great Public Park Project ….

2018 – Sarasota stays on Top of Luxury Market…

2018 TaxWatch: Fla. still a low-tax state – No. 42 out

6 Costs Homeowners Overlook and How to Pay for Them…

2018- Ultra-luxury home market stays hot in Sarasota …

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