The Bosshardt Blog

Top 10 Real Estate Stories of the Year- #6 Property Insurance

Posted by guest author Brian Scarborough, CIC, REBC, 12/31/08

For some reason, Aaron thought it would be interesting for me to submit a post about the property insurance market in our area.  With that said, may the Good Lord help any of you who would read such an article on New Year's Eve. 

I guess if there was a silver lining in the real estate arena for 2008 it was that once again our area was spared any major storm activity.  For the second year in a row, more property insurers were willing to write commercial and personal property insurance policies and premiums dropped as well, especially for those with newer properties.

It remains challenging to place older properties and wood/metal frame buildings in particular still have trouble finding coverage for pre-2005 premium amounts.  For those older homes (defined as older than 20 years), the most significant area that prospective insurers look at are building updates.  Before 2006 I'd never heard of a 4-point inspection or wind mitigation credits, now they're part of the everyday vocabulary in the insurance world.  Those looking to sell their house now have to consider replacing roofs that aren't leaking just so the next owner will be able to get insurance and therefore close on their mortgage.  I've seen similar instances regarding electrical panels and wiring types.

And while the number of carriers and pricing have improved, the old line insurance companies (READ: Those with money in the bank) still are not writing because of the exposure to the Hurricane Catastrophe Fund assessments/bonding.  Our Governor (Whose motto is Don't Worry Be Happy) and the State's Department of Insurance Regulation, still refuse to allow for any rate increases which means those truly solvent carriers remain on the sidelines.  Your initial reaction is probably that its good that insurance companies can't raise rates and I completely understand.  With that said, I'd argue that it would be equally important that the companies providing insurance actually be capable of paying claims in the event of the inevitable large hurricane event.  Currently, that just is not the case.

So, to put a bow on this little post, the good news is that your premiums are down and you have more options in terms of carriers.  The bad news is that your State will very likely be bankrupt when the wind does invariably blow and the insurers they've allowed to replace the USAA/Allstate/Nationwide/State Farm's of the world admit that they're not properly capitalized to pay the claims.  Again, the good news is that the State will step in to pay those insolvent carriers' claims. The bad news is that the "State" is us.

Guest author Brian Scarborough, CIC, REBC, is a senior insurance consultant at Scaborough Insurance company. For more information on Brian or SCI see www.scarins.com . Brian's also an accomplished blogger and his webblog about gator football is second to none. Check it out at www.thegatorreport.com

Top 10 Real Estate Stories of 2008: #7 - Appraisal Troubles

Posted by Aaron Bosshardt, COO, Bosshardt Realty, 12/31/08

In 2008, we saw a meltdown in the appraisal industry. Oftentimes in the past, a buyer or seller might use an appraisal to get out of a deal, but, in 2008, lenders were using appraisals to get out of deals, oftentimes rejecting the appraisal the day before or day of closing. Our local market was classified as a declining market, and appraisers were often hard pressed to find comps that were reflective of the rapidly deteriorating conditions. When properties did appraise, oftentimes the underwriters at the banks were suspicious and would seek second opinions, which would delay closings and give already nervous buyers the jitters.

Top Ten Real Estate Stories of 2008: #8 - Property Taxes

Posted by Aaron Bosshardt, COO, Bosshardt Realty, 12/29/08 

Property taxes are paid in arrears, and subsequently you pay them based on the value of the property assessed as of the previous January 1. That shocked a lot of property owners in our area. After the state had passed - with much fanfare - portability and caps, most owners were expecting their taxes to go down. When the notices came in, however, we were shocked to find our taxes for the most part had gone up!

The primary reason is that in Gainesville, prices still managed to appreciate from their 2006 highs another 2.5 percent, so the values used on January 1, 2008, hadn't yet reflected the decline in our real estate market.  There are a lot of reasons why that number may not be accurate, including increased incentives, cash back, and paid closing costs on every deal, but there is no way to track those numbers, and thus many of us were in sticker shock.

Never fear: come January 1, 2009, values will be down about 25% for the area, perhaps even 30 percent. Now for you landlords, don't get too excited, because the citizens of this county passed an additional school tax, so you will pay an extra $1 for every $1000 in assessed value. Don't forget to file for portability of your Save our Homes exemption if you moved your homestead property in the past two years!!!

By the way, it's not a bad time to ask your REALTOR for a CMA (that's short for REALTOR's Appraisal) if you believe that you will be appealing your assessment in August. Just get ready for some bad news

After dealing with many of the guys and gals down at the property appraiser's office, I believe they really do embody knowledge, commitment, teamwork, and customer focus. They have a job to do, and I think they do it rather well, even though it involves collecting taxes.

Amazing Realtor does it again! Just call him Coach Of The Year....Again.

For the third time in his career, Perry McDonald was named the 2008 1A-3A Volleyball Coach Of The Year by the Gainesville Sun today. Is it any small coincidence that he has also been named the People's Champion at Bosshardt Realty for the past three years, given to the person who receives the most and best performance reviews from his or her past customers? When I reached him by phone, I congratulated him and asked what he thought the tie-in is between his success in coaching and his success in real estate.  "I think personality traits and understanding personality traits," said McDonald. He also mentioned something I thought was extremely insightful, "In both you have to earn trust and loyalty to produce optimal results." Words to live by it seems. Congratulations to Perry McDonald, Coach/Realtor extraordinaire!

Also named to the 4A-6A first team was Gabby Jones, whose father is Alarion Bank's Senior Mortgage Consultant, Mike Jones. Congratulations to the Jones family.

The full article can be viewed here.

December 2008 Market Outlook

Here's this month's Market Outlook released to our associates.  The bottom line: the market remains weak, but there are strong signs that we've reached the bottom.  The question, of course, is how long we stay there.  Investors and savvy buyers should take advantage now.