Strickland Scoop #4: Flood Insurance
Our experts Jim DiMartino and Niel Allen from Strickland Property Group discuss flood insurance with Betty and Shawn with Wright Flood Insurance. A typical question regarding flood insurance is can flood policies be transferred?
“Yes, they can. Your buyer and seller would need to contact the current agent on the policy. It’s called an assumption. It has to have all paperwork signed at or before closing and then submitted to the carrier that is currently carrying the policy and they will make the name changes at that time. One thing that they need to remember is that with the insurance agent, it’s key about that signature before the closing.” Shawn said.
The city of St. Petersburg has changed its elevation requirements for new construction. The FEMA base elevation remains the same, but for new construction, all properties are required to be built two feet above that FEMA base elevation.
“There is what is called free boarding, and typically most communities want to encourage new construction to be a minimum of a one foot, but they have the right to go into two feet. In a high hazard flood zone, such as an A or AE zone, the higher you are above the established base flood, it’s the lower rate per hundred, so it actually reflects in the premium that the insurance is going to pay.” Shawn said.
Biggert-Waters was revealed a few years ago. According to Shawn, we are in reauthorization at this time, which means that as of September 30th, which is the end of the fiscal year for the Federal Government, our program is expiring. So to keep from expiring and continue on, the company’s’ insurance agent associations have been working closely with Senate and Congress to make sure that they try to address some of the things that were not addressed originally in the homeowners flood insurance affordability act about bigger waters. They’ve also heard feedback from things they implemented with the what they call the HFIA legislation and they’re going to address it. So they’re looking towards rate increases, maybe some fee changes, so there’s some different. Right now we have two bills out there. We have the house bill and we have a senate bill. They will have to work out everything and then it will have to be voted on. The goal is to have it done and completed before actual expiration of burn so there is no lapse or short term reauthorizations that have happened in the past.
-Shawn one of the questions we’re asked a lot, what’s going to happen to the rates in terms of year over year basis, and also can you explain the difference between rates on a primary residence verses to rates that may be income producing or a secondary residence?
One of the questions we’re asked frequently is what’s going to happen to the rates in terms of year over year basis and the difference between rates on a primary residence versus income-producing or secondary residences. Shawn explains.
“In Pinellas County, we have a large amount of what we call pre firm properties, properties built prior to January 1st of 1975. In the program, a primary home means you or your spouse live there 51 percent or more of the time. And if it is your primary home, then you are subject to a lower fee and lower rates. If it is a non primary structure and it is pre firm, you have a higher fee for your HFIA legislation fee and you also have higher rates. Now the difference is that when that occurs, they both have rate increases, but one has 15 percent of the primary and the non primary has the 25 percent. Once a home is post firm, after that January 1st, 1975 date, it’s what we call post firm, and again, it doesn’t have the rate increases that a non primary pre firm has, so there’s always going to be a rate increase but those non primary homes that are pre firm are going to be quite large.”
Strickland Scoop#3: Zillow Zestimate Accuracy
A lot of people are inquiring about the accuracy of Zillow Zestimates. Our managing broker Oscar Marti shares his thoughts.
“Consumers go to Zillow to rely on valuation of a home. Here’s a little background on Zillow. Zillow is not a real estate brokerage company; they’re an online media company that was founded about ten or twelve years ago by two former engineers from Microsoft, so they have no real estate experience, nor did they rely on the local brokers to get the valuations. So when people go online to take a look at what the valuation of a home is, either to buy or to sell, they realistically should step into a real estate company and ask the local realtor what do you think my home is worth, but what do you think this home is worth in order for me to buy this home today.”
Additionally, Jim DiMartino adds that as a real estate broker, he never refers to a Zillow Zestimate to value a property. A recent quote by Zillow CEO Spencer Rascoff says “We call it a Zestimate, not a zappraisal and not a zprice. It’s meant to be a starting point. To determine a more accurate opinion of a home’s value, you should hire a real estate agent.”
Lauren Krawczyk of Strickland Property Group explains her experience with Zillow.
“That’s a very good point as well. Just as an appraiser has to physically walk through the house to comp it, we do, as well, and we all know that zillow does not. According to Fortune magazine, Zillow has zestimated the value 57 percent of the current housing stock and only sixty five percent of that could be considered accurate by its description. That’s why it’s so important to contact the Strickland Property Group in order for us to help you buy or sell your perfect home.”
Strickland Scoop #2: Prepping a Home for Best ROI
Sellers often ask for suggestions on improvements before listing their home. They often wonder where those dollars are best spent for the highest return on investment. Our expert Lauren Krawczyk explains.
“Curb appeal is extremely important when selling your home. People do judge a book by it’s cover. In fact, sixty-three percent of people statistically that like a home online will drive by it. Some items of curb appeal that you should pay attention for is paint. We had a home that was painted recently, and we received a contract in a week and a half. Other items could be pressure washing, any cleaning of the exterior, also landscape, so adding pops of color to your yard will give a really good impression and a lot of freshness to the home.”
Additionally, staging is very important. It can be the difference between a house sitting or selling. Stats show that homes that are staged prior to listing sell about seventy three percent faster than those that wait until after they’re on the market to actually do the staging. From an overall ROI investment, it’s one to three percent of the actual asking price of a home, so the biggest bang for your buck if you will or the biggest ROI would be to invest in staging.
Lisa Gilmore with Lisa Gilmore Interior Designs shared her opinion on the best investments to make.
“People who are living in their homes and they want to update them maybe sell three to five years but they’re wanting to do it now, which I think is really great because it’s important to love where you live now with in minds of what you plan to do in the future. We are seeing people wanting to update kitchens and bathrooms which is of course a really important part of the home. Tile, lighting, countertops, cabinetry, all of those things really add up to make a great space for a seller. Another area that is really becoming popular are outdoor living spaces. We are finding that people really just want to extend their living quarters to the outdoors in Florida. Why wouldn’t you, you know? So, we recently just finished a project and we were able to incorporate some beautiful glass tile, some new countertops, really update the space, beautiful dining chandeliers. The husband had one of those famous Green Eggs so we were able to incorporate those into the space with a custom hood. I really make it a space that they can enjoy now for their lifestyles and sell their home but be able to sell it in the future without any worries.”
People often wonder if the housing market is in another bubble.
“That’s a question that I’m asked almost on a daily basis. I do not think we’re in a bubble, nothing like we were in 2005 and 2006, simply because the appraisal and loan process is so much more stringent than it’s ever been, just try to refinance your home and you’ll know exactly what i’m talking about.” Jim DiMartino said.
“I agree exactly with what Jim said. The lending standards are still being maintained at a higher level than they were back in 2005 and 2006 when we saw the bubble. The other thing that I’m not seeing is, I’m not seeing the speculation in the market that we saw at that point, which gives us much more sustainable levels of growth year over year as far as price increases and we’re not seeing the type of volume we saw back at that time as well.” Niel Allen said.
“I agree, Neil, this was definitely a seller’s market but buyers are noticing that the interest rates are going to be rising sooner than later, plus with the vibrancy of downtown St. Petersburg, St. Pete has really become the place to live in the area.” Lauren Krawczyk said.