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Tenant Screening

by Lisa Castanet

Every property management company should offer tenant screening services for the owners of the properties they manage.  When we list a property for rent on an annual rental term we also inform potential tenants that there is a rental application and application fee associated with renting the property.

The information requested is for any adult tenant who will be responsible for the rental payments. Individual information, previous rental history, credit history, background check, eviction history and employment verification are some of the items reviewed in the tenant screening process.  We use a third party entity who specializes in this type of tenant screening for rental properties.  The rental application fee paid by the tenant is $40.00 per person and goes toward the cost of the screening process. The actual time frame for compiling data and verifications can take a few minutes to a few days to process and receive back the written report.

Once we receive the reports we review with the tenant and with the property owner.  If an application is approved, then the lease documents can be written and signed by both parties.  We find that property owners really appreciate the professional tenant screening process and it helps to make informed decisions regarding their rental investment property.  For more information on property management services, please feel free to call our office at 863-647-1679 and speak to one of our agents.

Tenant vs. Landlord Maintenance Items

by Lisa Castanet

We get many questions about tenant vs. landlord maintenance items regarding rental properties.  We try to make sure to cover most common items in our Tenant Handbook which explains preventative care and emergency situations.  A copy of our tenant handbook can be found on our Rental Long Term listings page which we have linked to here.

One very common question is “Who is responsible for a problem with the garbage disposal?” and I would suggest it really depends on what the problem is and what may have caused the problem.  Disposals are designed to grind up organic items only.  Exceptions to this include:  coffee grounds, banana peels, artichoke leaves, celery stalks, flower stems, bones or any item that is particularly tough.  Plastic, glass, aluminum foil, utensils or grease should never be put into the disposal.  If usage is the source of the problem, then a tenant would be responsible.  If the disposal has been properly used and the issue has to do with the appliance itself then the landlord would be responsible for repair.

Some other items that would be a tenant’s responsibility include changing burnt out light bulbs, changing the air conditioning filters on a monthly basis and interior pest control spraying.  The lease agreement between the two parties; tenant and landlord should outline clearly what is each party’s responsibility to maintain.  It is always a good idea to ask questions when in doubt over tenant vs. landlord maintenance items because good communication will make sure that all parties have an enjoyable experience during the lease term.

Florida Foreclosure Report

by Lisa Castanet

Florida Association of Realtors recently sent us the data on the January 2013 Florida foreclosure report from RealtyTrac which stated that Florida is, again, ranked number one in the country for foreclosure filings.  Foreclosure filings include bank repossessions, default notices and scheduled auctions. This is the fifth straight month Florida ranked number one and January was up 12% over December 2012 and 20% from a year ago. This is more than twice the national average.

The foreclosure rate is calculated based on the number of foreclosure filings compared to the number of total mortgages. The January report hits a new milestone in that it marks the first month where it also had the highest total number of mortgages in the foreclosure process. A spot held by California since 2007.

The Florida foreclosure report also includes six out of the top ten spots regarding cities with the most number of foreclosure filings.  You might think these six cities would likely include the biggest metro areas in Florida but Lakeland ranks number 10 with one in 332 housing units in the foreclosure process.

While top economists believe this will not halt the housing recovery overall, it is sobering news.  Our current market has experienced stabilization over the past 1.5 years but I believe this has more do to with decreasing inventory levels than improved economic conditions.  Polk County's unemployment rate still remains higher than national average at approximately 9%  according to various labor reporting agencies. It will be interesting to see what lies ahead in 2013 and future Florida foreclosure reports. I think we will continue to experience a market driven by both short sales and bank owned homes with majority of buyers being individual local investors or large entity investment firms that have recently entered into our area and are buying up inventory at a quick pace.

Lease Agreements and Early Termination

by Lisa Castanet

We often get questions from owners and tenants alike about lease agreements and early termination. What happens if they have to break their lease or terminate the lease early?   A lease is signed between two parties, in this case, a property owner who is the landlord and a tenant.  It states the lease period which, in Florida is typically for a one year period.  It can be renewed annually if both parties agree and are in good standing.

On long term rentals the lease specifically states that a total sum is due from tenant to landlord and is paid in 12 equal installments.  Each installment is paid on a monthly basis.  For example, if the rental rate agreed upon is $1,000.00 then the lease would state the tenant owes a total sum of $12,000.00 for the year term and the tenant will pay that total sum in 12 equal installments of $1,000.00 each month. 

In mid 2010, the Early Termination Fee/Liquidated Damages Addendum became available for use from our Florida Association of Realtors.  Known as RLHD-3 it was approved for use under rule 10-2.1(a) of The Rules Regulating the Florida Bar.  This is a wonderful addition to the Residential Lease for Single Family Home or Duplex and the Residential Lease for Apartment or Unit  in Multi-Family Rental Housing (other than a Duplex) Including a Mobil Home, Condominium, or Cooperative.

This addendum clearly states that both landlord and tenant agree should the lease be terminated early by the tenant for any reason that both parties agree to one of two options.  The first option available is to agree the tenant would pay the landlord an early termination fee not to exceed and amount equal to two month's rent as liquidated damages.   The second option available is to agree that no fee would be paid by tenant to landlord as liquidated damages or early termination fee, and that the landlord may seek damages as provided by law. This means the landlord could file in court against the tenant for any monies or damages they think are owed to them by the tenant.  We use these forms as part of our lease agreements between tenants and our property owners and find them to be very helpful. 

There is also another scenario which tenants ask us about on occasion and that has to do with an owner selling the property during the lease term.  Obviously, situations can change for either party during a twelve month period. The tenant, in this scenario has a legal document and can request that the property owner make any potential buyer aware of the current written lease agreement so the tenant can remain for the entirety of the lease term.  This way the owner can list and sell their property should they need to or choose to sell it and the tenant can feel confident that their lease term can remain in effect.  The key to a successful landlord tenant relationship is good, open communication.  Native Palm Properties helps manage the relationship between property owners as landlords and their tenants.  For more information on property management, please call our office at 863-647-1679.

Central Florida Short Sales

by Lisa Castanet

Native Palm Properties' team has successfully listed and sold short sales for owners throughout Central Florida.  We have worked with home owners that owned homes in Lakeland, Mulberry, Lutz, Auburndale, Plant City, Winter Haven and Sebring on short sale transactions.  If you need a knowledgeable team to help answer your questions about how to sell your home and if you may qualify for an approved short sale we are here to help guide you through the process. The first place to start is to find out the current market value of your home. Please visit our Lakeland Home Values website for a confidential, no obligation market analysis or call our office to schedule a confidential appointment at 863-647-1679.

Preparing for Tax Season

by Lisa Castanet

Awe yes, it is that time of year again.  We just finished completing and sending our property owners their annual IRS 1099-misc forms. We send the 1099- misc form along with the annual report which breaks down their monthly income and expenses for their rental property.  This annual report is a summary of the monthly reports which we send along with the owner's check each month.  The owner needs this to complete their income taxes correctly.  The deadline for mailing these forms to owners is the end of  January every year. Some of our property owners live outside the United States although the rental property is located here in Central Florida.  In this case, we must send an IRS 1042-S form instead of the form 1099-misc. and the deadline for this filing is March 2013. 

In any case, the beginning of a new year is full of activity in property management.  We are happy to serve our owners and take care of their rental properties so they can rest easy.

Short Sale or Not?

by Lisa Castanet

Recently, we had a client that wanted to sell an investment property as a "Short Sale" due to a financial hardship and significant loss of income.  This is a very common scenario in our Central Florida market.  They had several properties throughout the region and were familiar with the process and documentation required.  

In this case, we listed the property for sale after determining the current market value.  We studied the comparable active listings and the comparable sales that have closed in the past six months.  We listed the property and received an offer from an interested buyer at full listing price.  This buyer was an investor, the offer was for cash and the closing date was reasonable.  "Wow; a perfect situation.  Right?????"  

Well, not so fast.  The seller provided the necessary documents as requested when the short sale was initiated with the seller's mortgage holder.   This "hardship package" typically includes a letter explaining the seller's hardship, the past 30 days most recent bank statements, the past 30 days pay stubs, IRS form 4506T-EZ  (or 4506T for self employed borrowers or borrowers with rental income), and a breakdown of their monthly income and expenses.   However, Fannie Mae backed mortgages require a Uniform Borrower Assistance Form.  The individual mortgage holder may use their own proprietary forms.  This form replaces the Home Affordable Request for Modification and Affidavit and the Fannie Mae Form 1020 (Borrower's Financial Form).

 I use this client example to demonstrate that in order to have a successful short sale transaction the seller must be absolutely positive and comfortable with the process and the results.  We encourage sellers to discuss their particular financial situation with their accountant or tax preparer and attorney.  Sellers need to understand how a short sale will affect their credit report and tax implications when compared to the other options available such as foreclosure and deed in lieu.  That way both sellers and buyers can move forward with confidence.  

We believe a short sale is a very good option and less damaging to credit scores.  If you are considering selling your home then one of the first steps is determining your home value.  The next step is to prepare your home for sale.

Short Sale and Foreclosure Resource

by Lisa Castanet

Lisa Castanet and Deane Hart have earned the nationally recognized Short Sales and Foreclosure Resource certification. The National Association of REALTORS® offers the SFR certification to REALTORS® who want to help both buyers and sellers navigate these complicated transactions, as demand for professional expertise with distressed sales continue to be a major part of our real estate markets in Lakeland, Mulberry, Auburndale, Bartow, Winter Haven and central Florida in general.

Within Polk County, FL short sales and REO or distressed property sales continue to be over 50% of the market. For many real estate professionals, short sales and foreclosures are the new “traditional” transaction.  REALTORS® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities.

“As leading advocates for homeownership, REALTORS® believe that any family that loses its home to foreclosure is one family too many, but unfortunately, there are situations in which people just cannot afford to keep their homes, and a foreclosure or a short sale results,” said former NAR President Charles McMillan. “Foreclosures and short sales can offer opportunities for home buyers and benefit the larger community, as well, but it’s extremely important to have the help of a real estate professional like a REALTOR® who has earned the SFR certification for these kinds of purchases.”

The certification program includes training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, and limit risk, and provides resources to help REALTORS® stay current on national and state-specific information as the market for these distressed properties evolves.

Home sellers that would like to investigate whether or nor they qualify for a short sale, please contact us directly at 863-647-1679 for a confidential analysis.  You can also investigate your home’s current market value at LakelandHomeValue.com 

Certified Distressed Property Expert.

by Lisa Castanet

 

A CDPE® is a real estate professional with specific understanding of the complex issues confronting the real estate industry, and the foreclosure avoidance options available to homeowners. Through comprehensive training and experience, CDPEs are able to provide solutions for homeowners facing hardships in today’s market, specifically short sales. CDPEs are also able to better help homebuyers navigate the short sale process and take advantage of the Lakeland, Mulberry, Auburndale, Bartow and Winter Haven short sale home market.

The prospect of foreclosure can be financially and emotionally devastating, and often homeowners proceed without guidance of any kind. The developers of the CDPE Designation believe that the best course of action for a homeowner in distress is to speak with a well-informed, licensed real estate professional. They have the tools needed to help homeowners find the best solution for their situation.

When other options have been exhausted, CDPEs can help homeowners avoid foreclosure through the efficient execution of a short sale. For sellers, knowing what your current home value is compared to the balance on your mortgage is valuable information to determine if you are a candidate for a short sale transaction.

You may ask yourself  "What Is A Short Sale?". This video may help explain.

While enduring financial difficulties is challenging for any family, the process of finding a qualified real estate professional should not be. For more information, contact Native Palm Properties at 863-647-1679. 

Displaying blog entries 1-9 of 9

Contact Information

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Native Palm Team
Native Palm Properties
5925 Imperial Pkwy, Suite #111
Mulberry FL 33860
(863)647-1679
863-838-1318
Fax: (863)701-8309