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Aaron Novello


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Not Living In Your Second Home Much? Now Is A Great Time to Cash Out!

by Aaron Novello

How much time a year do you spend on average in your second home?

For many owners, the answer will probably be "not as much time as we would like" as the pressures of work and other calls on schedules prevent them from using the property to its fullest extent.

In the case of owners who only live in the home for a very limited time in a calendar year, say less than three months, there may be more merit in cashing out and choosing to rent rather than own a property.

With properties in great demand in this area and inventory of available homes for sale remaining on the low side, now would be a very good time to sell.

We are confidently expecting a very successful winter selling season this year, as it is simply a great time for buyer sentiment right now. The continuing near historic low cost of home loan borrowing makes property investment really attractive. Factor in the increases we have seen in property prices recently and you have a recipe for an ideal moment for you to pause and consider whether you are getting true value from keeping your home or taking the profits and reinvesting them in other ways that don't require the ongoing maintenance costs and property tax burdens etc. that are part and parcel of a bricks and mortar asset.

Yes, it's a great time to sit back and watch that asset appreciate, but if your personal circumstances are dictating that you cannot spend much time actually enjoying the property, there's an ideal opportunity at present for you to successfully repurpose your asset base into other activities that will potentially add more value to your life. And if you still want to have your, albeit limited, annual dose of Florida sunshine, there are plenty of stunning homes for you to rent.

If this sounds like you, why not contact us today and explore the possibilities. We can offer you tremendous insight into market trends and how best to exploit them to your benefit.

Kind regards
Aaron Novello

Five Reasons You Shouldn't List Your Home "For Sale by Owner"

by Aaron Novello-The Novello Group

Some homeowners consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). 

Financial expert Mark Lamkin from Lamkin Wealth Management says there are several reasons this might not be a good idea for the vast majority of sellers.  If you're selling to a family member or a neighbor, for example, selling your home yourself is a great way to do this.  But the vast majority of sales do not happen this way.  

Here's the Five reasons Mark Lamkin believes you need a realtor:

1. There Are Too Many People to Negotiate With- Negotiations

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

The buyer who wants the best deal possible
The buyer's agent who solely represents the best interest of the buyer
The buyer's attorney (in some parts of the country)
The home inspection companies which work for the buyer and will almost always find some problems with the house.
The appraiser if there is a question of value keeping the sale in tact for the time between the accepted of and managing the phone calls to all parties is consuming 

As you can see, the list of the players in the negotiations can go on and on and I didn't list them all.  Many people LOVE to negotiate and haggle, but far too many people don't enjoy this aspect of buying or selling anything--let lone the hundreds of thousands of dollars that are on the line in this deal.  Professional negotiators (Realtors often are) can make you tens of thousands in this manner, so don't discount this simple fact alone.

2. Exposure to Prospective Purchasers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you? Realtors use the MLS- Multiple Listing Service.  The MLS is a local or regional service that compiles available real estate for sale by member brokers along with detailed information brokers can access online.  Also, with the MLS system, realtors can search certain parameters to match certain buyers with a number of houses.  Obviously, if you are selling your home yourself, industry stats say you are passing up almost 9 out of 10 buyers.  While that doesn't mean you can't sell your home yourself, Lamkin's opinion is that it's significantly harder to do so. And of course, there's the time value of money aspect of this as well.

Where do buyers find the home they actually purchased?  

43% on the internet
9% from a yard sign
1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial

3. Safety

Many people selling a home have full time careers.  That leaves a spouse or child home alone or in vulnerable spots.  Do you really want strangers in your home with your family, when they come to see your home?  This really is a huge safety concern. Lamkin says he wouldn't want his wife and kids in this spot, and he knows most of you wouldn't either.  Second, If you're a single person or a family that tells a person when you're at work (to schedule the appointment), you're showing or telling someone when is the best time to come back and help themselves.  Or if you're a single female, you could also be putting yourself at risk.

4. FSBOing has Become More and More Difficult- Legal Risks

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.  The big issue I have with this:  You can Be Sued!  Think about how litigious our society has become.  If you fail to disclose something, even in an innocent manner, you can be sued- and most likely you will lose!  A realtor knows the questions to ask and what is mandated by law to be disclosed.  This also can cost you thousands!

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent's commission. The seller and buyer can't both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $175,000 while the typical house sold by an agent sells for $215,000. This doesn't mean that an agent can get $40,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line? Before you decide to take on the challenges of selling your house on your own, call Aaron Novello of The Novello Group today to discuss your options.

Buying Still Beats Renting, Despite Higher Home Prices

by Aaron Novello-The Novello Group

According to a recent report by RealtyTrac (featured in the Sun Sentinel), it's still more affordable to buy a home than rent one in South Florida, though higher prices in recent years make buying less of a deal.

The gap is not as wide in Palm Beach County. Consumers need to spend just less than 37 percent of the county's $52,595 median household income to buy and just more than 37 percent to rent.

In 2012, when home prices bottomed after the six-year downturn, buyers in both counties devoted only about a quarter of their incomes to housing, while renting took up roughly 40 percent of their budgets, RealtyTrac said.

While South Florida's rental market also has become increasingly pricey in recent years, rents aren't climbing as quickly as home values, RealtyTrac said.

Whether they rent or buy, many consumers are spending more than the traditional norm for a roof over their heads. Industry analysts and counselors say buyers and renters should spend no more than 28 percent to 30 percent of their incomes on housing.

Many analysts say young professionals increasingly will turn to roommates to deal with the housing-cost burden. They also may decide to live with parents on a long-term basis.

For its report, RealtyTrac analyzed counties in the United States with a population of 100,000 or more. Mortgage payment amounts include principal, interest, taxes and insurance and assume a 10 percent down payment on a 30-year, fixed-rate loan with an average interest rate from Freddie Mac.

The company said it determined rent affordability by dividing the annual fair market rent for a three-bedroom home in each county by the estimated median household income for that county. To calculate buying affordability, RealtyTrac divided the annual house payment for an average-priced, three-bedroom home by the estimated median household income.

For more information on buying or renting in South Florida, call Aaron Novello today!

Solar Panels to Become More Affordable to Middle and Lower Income Families

by Aaron Novello-The Novello Group

According to MoneyBox, a blog about business and economics, the White House announced new efforts to put more solar panels in subsidized housing.

The New York Times reports that the administration “intends to triple the capacity of solar and other renewable energy systems it installs in federally subsidized housing by 2020, make it easier for homeowners to borrow money for solar improvements and start a nationwide program to help renters gain access to solar energy.” The White House also secured pledges of more than $520 million to fund other community solar farms and energy-efficient measures. Even though solar panel installation is growing quickly, solar power currently accounts for just 1 percent of the United States' electricity. 

The White House plan won't make a massive dent in that imbalance, but it could lighten some lower-income residents' utility bills. Cummings pointed to his constituents’ concerns about electricity costs: “The difference in a monthly bill of $10 or $15 means a lot to the people who live on my block.” 

Until relatively recently, solar panels were considered an impossible expense for most families. As Slate’s Daniel Gross explains, while solar panels end up being cost-effective, they are slow to pay off and are an investment not too many can make. But in recent years as prices have dropped, more middle-income families are seeing panels as an affordable option.

The White House's announcement marks the latest move by the Obama administration to boost efficient and renewable energy. There have been recent moves by agencies, such as the Defense Department, to green its own facilities, and so far in 2015, his administration has announced 40 environmental measures.

Aaron Novello of The Novello Group completely backs any measures to use more renewable energy in Florida. At the moment, it is against the law to live off the grid in Florida and the use of solar panels is not yet very cost effective or easy. If you would like to learn more about energy laws or green home building in South Florida, contact Aaron Novello of The Novello Group today!

Five Mistakes People Make When Selling Property

by Aaron Novello-The Novello Group

According to a recent article by USA Today, eighty-three percent of people view their home as a good financial investment. Not only is their home the biggest single asset most people own, but it's also filled with memories — the average seller has lived in his house for a decade, according to the NAR. So it's no wonder that when it comes time to sell property, people can get a little emotional.

Yet if people actually want to get a return on their investment in their home, they need to be smart about how they approach selling it. Letting emotions, not logic, drive decisions means you're more likely to make mistakes that can make it difficult to find a buyer or force you into accepting a lower offer than you would like.

The good news for sellers is that the market is tight. That's pushing home prices higher across the country, and the number of homes being sold is also up. The typical seller receives 97% of his final asking price, and his home was on the market for about a month, says the NAR.

But those numbers don't mean that every homeowner sells his property quickly or gets the price he wants. You can increase your chances of a successful real estate transaction if you avoid these five mistakes when listing your home.

1. Not being realistic about your home's value

What you think your home is worth and the price you can actually sell it for are often two very different numbers. "Nobody cares what you paid for it," one frustrated home seller told the Wall Street Journal. He'd bought a home for $325,000 and spent another $150,000 on renovations, but the property eventually sold for $83,000 less than he originally paid for it.

Even in markets where inventory is tight, sellers need to be careful not to get too greedy when picking a listing price. Properties that are overpriced at the outset tend to eventually sell at a lower price than they would have if they'd been appropriately priced in the first place. Choose a reasonable price based on factors like how much comparable properties are selling for and the home's appraised value. If you're not getting any interest, adjust your strategy. "No offers within a 30-day period means the price is too high," real estate agent Djana Morris wrote in The Washington Post.

2. Not making your home look its best

By now, we've all watched enough HGTV shows to know that good staging and curb appeal help to sell homes. "At a minimum, homeowners should conduct a thorough cleaning, haul out clutter, make sure the home is well-lit and fix any major aesthetic issues," said Chris Polychron, president of the NAR, in a statement about the value of home staging. More elaborate staging, such as repainting with neutral colors, sprucing up landscaping, or purchasing new furniture can also help. Overall, professionally staged homes can sell five to seven times faster than non-staged homes, according to the Real Estate Staging Association.

3. Refusing to negotiate

You should start by setting a fair and reasonable price for your home, but you also need to build in some wiggle room, especially if you need to sell quickly. Many buyers will start with an offer well below your asking price, particularly if they think it's a buyer's market. Naturally, their goal is to pay as little as possible for the home they want. Plus, many people want to feel like they've snagged a deal on what may be the biggest purchase of their lives.

You can make your buyers happy while also getting the price you need by being willing to accept slightly less than asking price for your home. Alternatively, you might agree to concessions like paying the closing costs, throwing in appliances, or making certain repairs to the property in order to sweeten the deal. Working with an experienced agent can help you negotiate the tricky dance of getting the price you want without scaring off a buyer.

4. Hiding the truth about your home

Sellers who want to be rid of their property quickly may be tempted to try to hide problems with the home from prospective buyers. But trying to cover up serious flaws, like foundation problems, leaky roofs, or mold, could come back to haunt you later. If you aren't up front about your home's issues, the buyer may well discover them during the home inspection. At that point, they'll probably either back out of the deal or ask you to cover the costs of fixing the problem. If the issues are serious and are discovered after the sale goes through, you could end up caught in a messy, protracted legal battle.

Real estate site Zillow recommends being upfront with both your listing agent and your buyer about potential issues with the home. Price your home appropriately given its condition and document the problems you're aware of and have your buyer sign off on them. Full disclosure is the best way to avoid a lawsuit.

5. Not having a backup plan

In a perfect world, you're able to smoothly navigate the transition between selling your current home and buying a new one. In reality, things rarely go as planned. Savvy sellers have contingency plans in place to avoid either getting stuck with two mortgages at once or not having a place to live, or to protect them if a deal falls through.

Some people insert clauses into their contracts that make it clear that they won't move forward with the sale unless they are able to purchase a new home. You may also want to be prepared to find temporary housing, like a rental or staying with family, in case your home sells quickly. If you must move before your home sells, make sure you've budgeted to afford the carrying costs of the old home. Finally, if there are multiple people interested in your home, you may be able to accept backup offers, which involve agreeing to sell to a second buyer if the first one backs out.

If you are thinking of selling your home or have any questions about the process, please call Aaron Novello of The Novello Group today!

The Salary You Need to Buy a Home in 27 US Cities

by Aaron Novello-The Novello Group


According to the Washington Post, a buyer who puts 20 percent down would need to earn a salary of $48,604 to afford the median-priced home in America. But that total varies a lot from city to city. South Florida ranks in the middle with a salary of $58,431 in Miami.

Real Estate blogger Ana Swanson writes, "The site's calculations assume that a buyer spends 28 percent of gross monthly income on housing, including principal, interest, taxes and insurance, (in line with industry guidelines for standard "front-end" debt ratios) and makes a 20 percent down payment on a house. To calculate the cost of buying the median-priced house in a given urban area, combines its own average interest rate for 30-year, fixed-rate mortgages in the fourth quarter; the National Association of Realtors’ data on median-home prices in the fourth quarter; average metropolitan property tax data from the Tax Foundation, a Washington-based think tank; and statewide average homeowner insurance premium costs from the Insurance Information Institute, an industry organization.

The data is, of course, an estimate — for one, property taxes and insurance costs will vary depending on the property — but it gives you a good idea of how housing costs varied around the country in the fourth quarter."

For more information on housing prices and affordability in South Florida, please contact Aaron Novello of The Novello Group today!

You can read more about the methodology and see the site's data here.

Zillow's "Zestimates" are off by about 20% in some Florida Counties

by Aaron Novello-The Novello Group

According to a recent LA Times article by Kenneth R. Harney, when "CBS This Morning" co-host Norah O'Donnell asked the chief executive of Zillow recently about the accuracy of the website's automated property value estimates — known as Zestimates — she touched on one of the most sensitive perception gaps in American real estate.

Zillow is the most popular online real estate information site, with 73 million unique visitors in December. Along with active listings of properties for sale, it also provides information on houses that are not on the market. You can enter the address or general location in a database of millions of homes and probably pull up key information — square footage, lot size, number of bedrooms and baths, photos, taxes — plus a Zestimate.

Shoppers, sellers and buyers routinely quote Zestimates to realty agents — and to one another — as gauges of market value. If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers' list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000 when Zillow has it at $685,000.

Back to the question posed by O'Donnell: Are Zestimates accurate? And if they're off the mark, how far off? Zillow CEO Spencer Rascoff answered that they're "a good starting point" but that nationwide Zestimates have a "median error rate" of about 8%.

Whoa. That sounds high. On a $500,000 house, that would be a $40,000 disparity — a lot of money on the table — and could create problems. But here's something Rascoff was not asked about: Localized median error rates on Zestimates sometimes far exceed the national median, which raises the odds that sellers and buyers will have conflicts over pricing. Though it's not prominently featured on the website, at the bottom of Zillow's home page in small type is the word "Zestimates." This section provides helpful background information along with valuation error rates by state and county — some of which are stunners.

Want to know the stats in Florida counties? Click here.

So what do you do now that you've got the scoop on Zestimate accuracy? Most important, look at them as no more than starting points in pricing discussions with the real authorities on local real estate values — experienced agents and appraisers. Zestimates are hardly gospel — often far from it.

For a more accurate estimation of your property's value, please contact Aaron Novello of The Novello Group today or click here.

Aaron Novello's Article as Featured in SELLING Magazine

by Aaron Novello-The Novello Group

South Florida Housing Market Entering Stability

by Aaron Novello-The Novello Group

According to a recent article by Paul Owers in the Sun-Sentinal, the South Florida's housing market is steadily improving and closing in on a benchmark stable range.

A score of at least 80 is favorable. A perfect score is 100.

South Florida's gains are mostly the result of on-time mortgage payments and a brighter employment forecast, according to Freddie Mac.

While the index still considers the South Florida market weak, industry observers say the region has shown significant progress in the past two years. Robust demand from foreign buyers and a lack of inventory helped drive up prices, though the increases are starting to level off.

The last time the tri-county region's index score hit 80 was August 2008, when the market was heading down amid the housing collapse.

Meanwhile, the rental market also has soared in recent years. In fact, consistent rent growth turned Broward into one of the nation's least affordable rental markets, according to RealtyTrac Inc. of Irvine Calif.

Broward residents making the median household income of $50,432 would need to spend 43 percent of their monthly gross salaries on fair market rent, RealtyTrac said. Only Miami-Dade County (46 percent), Kings County, N.Y. (47), Philadelphia (47), Baltimore (50) and the Bronx, N.Y. (53) were more expensive for renters.

Palm Beach County residents making the median household income of $52,152 have to devote 37 percent of their pay to fair market rent, RealtyTrac said. Financial counselors say families should spend no more than 28 to 30 percent of their gross pay on housing costs.

For more information on buying, selling or renting property in South Florida, please call Aaron Novello of The Novello Group today!

How Can Winter be Beneficial for Buyers?

by Aaron Novello

According to a article by Dini Harris, there are some great advantages to buying a home in the winter. If you don’t mind a smaller pool of homes for sale or moving around the holidays, winter might be a good time for you to house shop.

Less Competition, More Leverage
Since spring and summer are the most active real estate seasons, many home sellers wait until then to list their homes. That means there are fewer homes for sale in the winter, but the sellers often have strong reasons to sell their homes soon, such as job relocation. These motivated sellers can be a boon to the home buyer.

While there are fewer homes to choose among, the smaller selection can save you a lot of time. Do you really want to traipse through 50 houses? It may be simpler to view the handful of homes for sale in the winter and choose the one that best suits your needs.

Just as there are fewer homes for sale during the winter, there are fewer buyers, too. That means less competition and sellers who are more willing to accommodate potential buyers. Use this knowledge to your advantage. Offer a relatively low (but not insultingly low) bid for the home you’ve selected, or ask for perks such as the living room furniture or the chandelier that you admire. The low number of potential buyers also means you have more time to make your decision. In the spring, you often need to choose a home and act quickly, but in winter you may be able to take your time.

Assessing a Home’s Winter Fitness
Viewing homes in the winter lets you see how it holds up to the weather. Did you feel cold while looking through the house? Is there a functioning heating system and hot water? Are the windows letting in drafts?

Availability of Agents and Others
Another advantage of buying a home in the off-season is the greater availability of industry professionals. Real estate agents will have fewer clients and more time to focus on your home search. Lenders will be more accessible for questions and assistance. Some lenders even waive fees during the off-season to encourage borrowers to use their services. Likewise, movers tend to lower their costs during the winter months.

Gray Gardens or Winter Wonderland?
Home buyers can be turned off by the bleak look of prospective homes in winter. Bare trees and lawns covered in gray snow aren’t the most picturesque. However, you’ll be able to see how well neighbors tend driveways and sidewalks, whether the town plows or salts icy streets, and whether kids come out to play in the snow. Around the holidays, you might even see the neighborhood decorated in its winter finest.

Call Aaron Novello of The Novello Group today to take advantage of this time of year!

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Contact Information

Photo of Aaron Novello -The Novello Group Real Estate
Aaron Novello -The Novello Group
Keller Williams Realty
Fax: 954-809-3003