Real Estate – Dave Bailey


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12 Rules To Know How Much My House Is Worth

If you want to sell your house fast for top dollar, make sure you are pricing your home correctly.

  • If you price it too high for your market, it will take longer to sell (or might not sell at all).
  • If you price your house too low, you’ll end up leaving money on the table.

So, how do you know where the sweet spot is for pricing your property?

You do what any good real estate agent would do for you.

How Do I Know How Much My House Is Worth?

You create a CMA (comparable market analysis) so you understand what other similar (similar is the keyword here) houses are selling for in your area.

Just because your neighbor Joe sold his property for half a million doesn’t mean your house will sell for that much.

Your house may be less, or it may be worth more.

So, what factors should you consider when comparing your house to other similar properties?

Don’t worry, I’ve got you covered.

12 Easy Rules of Thumb To Know How Much Your House Is Worth

Here are some easy rules of thumb for comparing properties:

  1. You start by comparing your house to properties that were sold very recently, preferably within the last few weeks, to compare current prices on the market.

This is important, but later we’ll explain how to compare your house if there aren’t any recent sales similar to your home.

Find Similar Houses To Compare To Your Home

Then, only compare properties which are:..

  1. Similar Square Footage as your house – Other houses you are looking at should be within 200 sq ft. So, if your home is 1200 square feet, you want to look at other homes between 1000 – 1400 sqare feet.
  2. Similar Lot Sizes – Other houses you are looking at should be within 2,500 square feet in lot size.
  3. Similar Ages – The houses you are comparing should
    have been built within 5 years of the construction date as your home.
  4. Similar Neighborhoods Or Same General Area – The price of houses can fluctuate based on the neighborhood they are in, so it’s best not to leave your subdivision And DON’T cross major roads.
  5. Similar Stories – Don’t compare your first-story house to a two-story house

But, what do you do if those houses have a different number of rooms or amenities?

How Much Should You Adjust For Differences In Your House?

Use these general rules of thumbs below:

  1. Different Number of Bedrooms – If your house has more bedrooms than the property you are comparing it to, you can add $10K-25k per bedroom. If your home has less, you’ll subtract the amount.
  2. Different Number of Bathrooms – Again, you’ll add or subtract $10k for each bathroom your house has compared to the other you are comparing it to
  3. Pool – If your house has a pool and the other does not, you can ad $10k-15k to the value of your house. If your house doesn’t have a pool but the other does, you’ll subtract that amount from your price.
  4. Garage – Again, if your house has a garage but the comparable does not, you’ll add $10K to the value of your house. And of course, subtract it if yours does not, and the other does have a garage.
  5. Carport – Same thing with a carport, only this time you’ll only add or subtract $5K dollars for the difference between your house and the comparable.
  6. Traffic – How is the traffic in your area compare to the other house you are comparing yours too? If traffic is worse/dangerous or out of the way, then subtract $10K from the value of your home. If it’s better, easier, more convenient, then add $10K

That should give you a general idea of what your house is worth compared to other similar homes that have sold in your area.

What If There Aren’t Any Recent Homes To Compare To Your House?

But, what if you can’t find a comparable property that has sold within the last 3 months?

Go back in increments of 3 months, 3, 6, 9, 12… until you find a comparable property that doesn’t violate the above rules.

When comping you can go back up to 2 years and adjust for inflation around 3.5% year over year for comps

So, there you have it, my friends.

12 quick, down-and-dirty tips on how to compare your house to others in your area so you have a general idea of what your house is worth.

Hope that helps!

Of course, there are other factors at play, like upgrades and renovations and things that aren’t easily compared to other homes.

This is where your local real estate agent will be able to provide extra insight and expertise since they are out looking at homes on a daily basis…

Which is where I can come in and help you figure out that sweet spot of what your home is worth so that you can sell your house quickly while still getting top dollar for it. No obligations or commitments to selling your home…

But of course, if you do decide to sell it, I’ll be happy to help you get your home ready to sell, create a solid marketing plan to get your house in front of as many people as possible, negotiate the best deal possible for you, and walk you through the inspections and appraisals so you make it to closing.

And then of course make sure you understand all the closing documents you are signing because that’s where I shine.

I’ve done over 850 closings over the past few years working in the real estate industry with title companies and law firms.

Want More Help To Figure Out What Your Home Is Worth?

So, if you have a house in Florida that you’re thinking about selling, shoot me over the property address and I’ll be happy to run some numbers for you.

Even if the property isn’t in Florida, I can still help you crunch the numbers. And then if you decide that you want to sell it, I can recommend a local real estate agent in your area who can help you get it ready, market it, and walk you through to closing.

David, What Is My House Worth?

Fill out the form below with the address of your property, so David can take a look and crunch some numbers for you to understand what your house is worth.

Should You Sell Your Home To Investors

I called the home seller to introduce myself as well as confirm the time and location. She didn’t seem overly excited to sell her home like most people are. I didn’t think much of it.

She needed a second witness to sign off on the General Warranty Deed, so I provided the witness.

We all met bright and early Friday morning at a local coffee shop.

The seller signed the closing documents quickly. Barely glancing at the paperwork.

Was she in a hurry to go somewhere else?

Not really.

We finished signing and I packed up my notary stamp and journal, my box of blue pens, and stuffed the signed documents into the FedEx envelope to ship back to the title company.

When I put my stuff in the car and turned around, she was still sitting there.

I decided to go back inside. I was tempted to get a cup of Honey Citrus Mint Tea. As I walked toward the door, the seller was coming toward me.

I realized she wanted to ask me something.

“What am I supposed to do with the keys?” she asked.

The title company hadn’t given me any specific instructions about collecting anything from her.

So, we sat back down at a table and tried calling a few numbers to see if we could get somebody on the line who could tell her what to do with them.

She Sold Her Home Cheap To An Investor

Long story short, she had sold her house to an investor in another county. They had told her to leave the keys with the title company at signing. But the title company was a good four to five-hour drive away.

She got ahold of one of her contacts before I did. I could only hear one side of the conversation, but it sounded like they wanted her to leave the keys under the rug or something.

In the end, they just told her to hang on to the keys till the buyer got ahold of her to pick them up.

It was a strange situation. Normally, the keys are exchanged at signing. Either the seller leaves them at the office for the buyers to pick up. Sometimes the title company will give me keys to hand the buyers after the signing is complete and the lender has approved funding authorization.

But I’d never had something quite like this happen. And it didn’t make much sense until she explained what was going on.

Investors Make ‘Cash’ Offers For Less Than Your Home Is Worth

An investor had called her, making her a cash offer. If you own a home, you’ve probably received calls from them offering to buy your home for cash. Typically at about 70% of what it’s worth.

They make it sound like it’s better than using a realtor because you don’t have to pay a realtor or closing fees. But investors usually pay much less than your home is worth anyway. So, it doesn’t really make much sense to me. Unless you just want to sell fast and don’t have to deal with buyers.

But in such a crazy hot market like we’re in, it doesn’t make sense to sell your home to the first person who makes you an offer. I’ve been to several signings recently where I’ve seen home sellers take the first offer they get.

An investor had offered the homeowner what they thought it might be worth and the seller accepted. Without checking to see what it was really worth, or even taking the time to see if someone else might make them a better offer.

It’s My House And I Can Do What I Want To…

Which I think is crazy, but hey, it’s their house and they can sell it for whatever they want. Right?

But even if you don’t want to go the usual route of showings and inspections, at least talk to a couple of different investors to get several quotes. Or talk to a real estate agent who can tell you know if the price you’re getting makes sense.

Now, in total transparency, I am a real estate agent with Coldwell Banker Realty, and I work with a lot of investors. So, I see both sides of the coin and see advantages and disadvantages either way.

Explore Your Home Selling Options

All I’m saying is, explore your options to get as much money from your home as possible in the time that you have to work with.

If you’re in a hurry and need to sell fast, then a quick cash offer may make sense.

Get Several Offers For Your Home… Not Just One

But here’s an idea for you. This is what I would do if I wanted to maximize the amount of money I made from the sale of my home.

First, get several cash offers for the sale of my home, and see how long they’ll give me to decide and take the offer. It might be seven days or a month. Then market the home and see if you can find other buyers that were willing to pay more within that time frame.

If I didn’t get a better offer then I would take the cash offer. Which is nice because you have a guaranteed backup plan.

How To Get Top Dollar For Your Home With A Guaranteed Sale

That’s exactly what I do for my clients who want to sell their homes. I work with a company that gives you a quick cash offer for the sale of your home. No showings, no stress, no worries. They’ll buy it quick and easy.

And they give you up to 45 days to find someone else that beats the price they are offering for your home. If someone else does make you a better offer, you made more money for your home. If you don’t get any other offers, then at least you know you have a guaranteed buyer willing to pay cash for your house.

On top of that, they’ll also give you a leaseback so that you can continue living in your own home even after you sell it to them, which is a nice option if you need while waiting to close on the new home that you are buying.

Selling Your Home In Florida?

If you want to sell your home in Florida, I can help you…

  • get a guaranteed cash offer,
  • upgrade your home with any renovations needed with no money out of pocket,
  • market your home far and wide for a better offer, and
  • extra time to live in your home even after you sell it

If you’re interested in listing your home for sale in Florida, inquire about your options by filling out the form below.

Homesteading A Florida Property While Going Through Divorce

“Can I file for homestead on the home I’m buying, even though our divorce won’t be finalized for another month or so?” someone asked me during a closing I did this week.

In a minute I’ll tell you the answer, how we got it, and who we got it from. And I’ll give you a little bit of the backstory. So, keep reading to the end.

But first, we have to clarify a few things. Like what is a homesteaded property, why it’s important to you as a Florida homeowner, and how it saves you money.

What Is A Homestead In Florida?

Questions about homestead are fairly common when someone is buying a home in Florida. Especially, if the new home buyers are moving in from out of state.

So, just in case you’re new to Florida and don’t know what Homestead is, let’s break it down.

Homestead exemptions are a way to decrease your overall tax burden in the state of Florida. Homesteading your property means that you declare that house to be your primary residence. There are limitations as to the size of the lot depending on where it is located.

But homesteading your property, you can claim up to $50,000.00 of tax exemptions by reducing your home assessed evaluation and the taxable amount.

And on top of that, it provides a form of protection. A creditor in Florida, for example, wouldn’t be able to force the sale of your homesteaded property because your spouse ran up a crazy amount of gambling debt.

So, if you are moving to Florida and planning on buying a house, you’ll definitely want to apply for your homestead at the office of the county property appraiser as soon as possible.

Now Back To The Story Of Our Divorcing Couple

I’m signing documents with a man and a woman who were in the process of getting a divorce. I didn’t even realize it at first. They were super chill and friendly. I didn’t pick up on any bad vibes between them, so it almost caught me by surprise when the question came up.

Because I have had to sit down with couples going through the process of getting a divorce, and usually it isn’t much fun. Even if they aren’t in a bad mood, you can tell something is off between them. And things just feel awkward.

So, even though I’m busy engaging them in conversation and light patter as I run them through the documents, explaining what each document is that they are signing, and showing them where to sign, I still pick up on quite a bit from their looks and words and actions.

But this time, it was impossible to sense anything out of the ordinary. I thought they were just another ordinary couple buying a home.

Which is why her question caught me off guard about homesteading her property.

“Can I go ahead and homestead my house since it’s my primary residence?” she asked.

“Yes, of course,” was my reply, until I understood everything wasn’t quite what it seemed.

“Can I file for homestead on the home I’m buying, even though our divorce won’t be finalized for another month or so?”

That one had me stumped. I’d never been asked that question before. I’ve signed documents with couples where the husband lived in New Port Richey and the wife lived in Orlando. I’ve signed documents where one spouse claimed residence in Florida and the other in Maryland.

But this was a new one for me after doing over 850 closings over the past several years, it’s fun to have someone ask you a question that you’ve never heard before.

“Let me check with the title company,” I said.

I trotted over to ask the escrow officer what her thoughts were on the matter. She wasn’t 100% sure and suggested that we call the Property Appraiser’s office to get their statement on the matter.

I mean, sure, we all had a general idea of what the answer would be, but you still want to be 100% sure that you’re giving your clients the right information.

Talking To The Property Appraiser About Homestead

So, the title processor called the property appraiser and they confirmed what we already suspected.

Since the soon-to-be-ex-husband already lived in a home that was homesteaded, the soon-to-be-ex-wife couldn’t file homestead on her property until the divorce was finalized.

Whew. Case closed.

Wife signed the documents buying herself a new home. Husband signed the few documents that required his signature (like the Mortgage since he was waiving his rights as a non-borrower on the loan). And they went on their way.

The moral of the story is, if you’re buying a home in Florida, you definitely want to homestead your property to get your tax exemptions and extra protections.

But if you’re in the process of getting a divorce, you can’t homestead the new property until the divorce is finalized.

Divorce signings. I’ve done a good number of those. As I’m sitting here writing, several other stories come to mind. But they’ll have to wait for another post another day.

Meantime, ask any questions in the comments below.

P.S. And if you’re looking to buy or sell a house in Florida, call me at (727) 249-4022. You can read my Complete Guide To Buying A Home or How To Sell Homes Fast for Top Dollar

P.P.S. And if you’re looking to get married…I’ll be happy to officiate your wedding. 😉 Here are some common questions about Florida wedding ceremonies. You can inquire about your wedding date to see if it’s available.

How To Use Your Primary Residence To Buy A Second Home

Here’s a tip for buying a second home that I came across this week in a closing that I did over in Tampa.

So, they had already been living in their main home for a good while with a lot of equity in it.

They took out a Home Equity Line of Credit and used the funds to buy a second home closer to the beach.

I normally wouldn’t have even known what they were going to do with it, but when we go to the page they had to sign with the Occupancy Affidavit, things got a little sticky.

Now, in case you’re not familiar with the Occupancy Affidavit, it’s a form where that states whether the property will be their primary residence or investment property.

Why Does It Matter If It’s A Primary Residence or Investment Property?

After they sign it, I have the signers take an oath that the information is true and correct. Then I notarize the document.

So, here’s where things took a minute to get sorted out. Because the Occupancy Affidavit stated that the property they were refinancing was their primary residence.

And they paused and read it again. Then said, “No, but it’s not our primary home. It’s a second home.”

At this point, I was confused. The property address where I met them was their residence. And it was the property that was being used as collateral for the loan.

Then they explained that they were taking out the HELOC (Home Equity Line of Credit) and using the cash out to buy this second home.

That’s when I finally understood what was going on.

Using Their Primary Residence To Purchase A Second Home

I thought that was an interesting strategy for getting the benefits of refinancing on a primary home since technically they were taking out the loan against their primary residence.

Usually, when I see people buying a second home or investment property, they use the second home as collateral, where the interest rates are a bit higher.

Now, I don’t know all the details and didn’t ask, but I thought this was a brilliant stroke of genius on the part of the mortgage broker that helped him with the loan process.

In the end, they understood that, yes, it was their primary residence that they were taking the HELOC (Home Equity Line of Credit) out on and using as collateral for the loan.

Since it was a cash-out refinance, they were getting the funds wired into their account and could then use it to do whatever they wanted to with it.

Obviously, I’m no lawyer, so I don’t all the legalities behind this. Nor am I a financial advisor or mortgage broker, so I can’t recommend you do the same.

But it’s definitely an idea worth talking about with your mortgage broker or loan officer if you’re looking to buy a home in this crazy market.

Especially, if you have a lot of equity in your current home.

3 Steps To Buying A Second Home With Your Primary Residence

Let’s break this down as simply as possible…and then talk about what you can do with two homes.

Step 1: Cash Out The Equity In Your Primary Residence

Get a cash-out refinance or HELOC (Home Equity Line of Credit) to get the benefits of using your primary residence

Step 2: Buy The Second Home With The Liquid Equity From Your Original Home

Use the cash out to buy a second home or make a large down payment

Step 3: Congratulations Because You Now Own Two Homes

Enjoy the benefits of owning 2 homes, and take advantage of writing off the tax breaks you get from an investment property.

I guess that was really only two steps since enjoying your new homes wouldn’t actually be considered a step.

But it would sound too easy if I said this was only a 2-step process for buying a second home with the equity from your primary residence.

So, what can you do with two properties?

I don’t knooooow…

Idea #1: Use one of them as a weekend home or temporary getaway.

Idea #2: Rent one of them out as a short-term rental (like AirB&B) when you’re not using it. That way you can just block out the time you actually want to use it. Use the extra income to pay off the mortgage.

Idea #3: Or move permanently into the second home. If you like it better than the first, go ahead sell your old home.

Since you don’t have to worry about moving, you won’t be under any rush or pressure to sell it.

Bonus Idea: Here’s a bonus idea for you…

Later down the line, once you’ve paid off some of the loan and built equity back up, you can use the second home in a 1031 exchange to buy a third (even bigger and better house) without having to worry about capital gain taxes.

The possibilities are endless.

Let me know what you thought of this strategy in the comments below.