Retirement Resources, Tips & Reading
This section of our web site provides information for you about retirement issues, retirement links and recommended reading. For more handy tips like our Thrifty Retirement Tips visit our Cheap Places to Retire blog.Cape Coral is one Florida city hit hard by the housing market collapse and foreclosures. We wondered what happened to the market there to cause the foreclosure crisis to be so severe, so we visited Cape Coral to find out why. Our report is on our blog: Cape Coral, Florida and the Foreclosure Crisis
Be sure to read articles that follow and learn how to be a careful retirement home buyer.
Cautions for Buying a Retirement Home
By Linda Manley
Another common reason to sell is to move to a different geographic area. You might want to be nearer to family members who live elsewhere, whether your children or your siblings. You might be looking for a different climate, usually a warmer one. Perhaps you just want a different neighborhood. Neighborhoods change: friends move away, more children move in (whom you now consider noisy), local stores move or go out of business.
Regardless of why you decide to move, you need to be more careful than ever when you buy a retirement home (see the following article). The trappings of the stagnant housing market have created desperate developers, brokers, and sellers who are tempted to make their properties look desirable at any cost, including misleading potential buyers. Simple fudging is common in areas such as average utility costs, homes association dues, and property taxes. The size of the lot and the square footage of the home are other common areas of misleading figures, both of which could affect appraisals and financing.
Inconvenient fibbing involves assurances that the neighborhood is quiet and that no one nearby has crowing roosters, barking dogs, or other noisy pets. Sellers also forget to mention the freeway noise, the main bus route at the end of the block, or the garage band next door.
More serious misrepresentation involves issues such as lack of disclosure of previous flooding, sewer backups, or pest infestation such as termites, rodents, or even bats. Mold inside walls is a growing problem, and buyers should know whether radon gas is an issue in the house. Leaking roofs and plumbing or electrical systems that are out of date can present major headaches, as well. Essentially, you must look out for your own interests. Although a buyer's agent is helpful, you should be prepared to do a good deal of the legwork on your own. A few tips will help start you on your way, although this list is by no means comprehensive.
- Drive through the neighborhood at several different hours of the day and night. During late afternoon or early evening visits, you will see more family activity, including people coming home from work, children playing outdoors, and so on. Talk with neighbors who aren't selling to get a better feel for the neighborhood.
- Talk to police, if you are concerned about crime in the area.
- Check with the community or homes association if there is one. Find out if major expenses or improvements that would increase your dues are on the schedule. If the area is new and the seller has promised coming amenities, ask how soon those are likely to materialize. Ask if specific percs, such as assigned parking spaces, pool passes, and fitness club memberships are included in the sale.
- Hire an independent home inspector, rather than one recommended by the seller. Be sure to check the credentials and references of the inspector before you hire him or her.
- Contact the office of the tax assessor to find out the amount of taxes. Try to determine if any new improvements you saw in the home, such as a new deck or room addition, have been recorded on the property. If not, your taxes could be higher.
- Contact professionals for a complete and thorough history of property damage. This is called a comprehensive loss underwriting exchange report and it contains reports from insurers about claims for the past five years. It does not contain any personal or confidential information about the current homeowner. Also called a home seller's disclosure report, this will reveal loss or damage from wind, hail, or fire. Although the homeowner can obtain the report for free, the report will cost the potential buyer about $20. The report can be obtained from http://www.choicetrust.com or from the Insurance Services Office, Inc. at 800-627-3487, where it's called the A+PLUS report.
We all know that a move at this time of life, just after you have retired, is a major decision. As you look, and continue to look, for just the right new retirement home, it's easy to become overwhelmed, exhausted, or just complacent as you visit home after home after home. But when you find a home you love, going the extra mile and completing your own due diligence can save you thousands of dollars down the road, and can prevent you from buying a nightmare instead of a dream home. Make your retirement move a happy one by doing all your homework.
Homes Association Perils for Buyers
By Linda Manley
In such unusual cases, most of the properties are unoccupied. Sometimes the properties were never sold, as the market crashed before the developers were able to sell all the units. Sometimes the units were now worth only half of what the buyers paid, and they just walked away from the money pit. In other cases, owners lost their jobs, went bankrupt, and, with nothing to lose, stopped paying dues. Others sub-let or rented their units, but didn't forward any of the rent money for association dues.
As reported in the St. Petersburg Times, one development group dumped the responsibility for the upkeep onto the board of the association, none of whom had any background in the legal responsibilities of a condo board or the maintenance required by the complex. When the board examined the budget, they found just $162 in reserves, with expected expenses for the year of over $182,000.
Only 12 of the 96 owners were still paying dues and maintenance fees. The major overall insurance policy was in arrears and there was no money for upkeep such as painting, roofing, pool repair or upkeep, and similar needs. The board planned a special assessment to cover emergency costs. In other associations, cable, water, garbage pickup, and other services are covered by the association. Delinquent dues can immediately affect such basic services.
Recent court decisions in specific counties in Florida will provide some assistance to HOAs there. The decisions allow for blanket receivership in the event of massive foreclosures in an association. The Palm Beach Post reported another decision allows independent companies to collect the rent for subleased units from the tenants, ensuring payment of the association dues before monies are released to the unit owner.
Although some homeowners owe nearly three years in back dues, Florida state law requires foreclosing institutions to pay only six months worth of overdue fees. That leaves associations on the hook for thousands of dollars worth of delinquent dues. The Herald Tribune of Sarasota reports proposals are pending in the state legislature that would require lenders to pay more of the fees, but passage is uncertain and will take months, if not years, to go into effect.
Although Florida is likely the state hit hardest by such devastating circumstances, more than ever, those who wish to move to a warmer climate must perform due diligence before purchasing a home or condo unit with an HOA. Talk to neighbors and see if you can find out who is on the association board. Then, talk to board members. Yes, that takes a long time and it might be a lot of hassle. However, it's much less painful than finding out two months into your new home that the homes association is broke.