Real Estate Tips

WHEN THE PROSPECT ARRIVES?

When one of our agents and prospective buyers arrive to inspect your home, here are a few points to remember:

Greet them courteously, then disappear. If you can, leave the house. Don't tag along. Your presence will inhibit free discussion, making it difficult for the agent to ferret out the buyer's likes and dislikes.

Avoid having too many people in the house. This can make the buyer feel like an intruder. Children and pets should be housed elsewhere during the showing.

Do not try to interest the buyer in purchasing furnishings before signing the sales contract. This can ruin a transaction. After the sale is made, there will be plenty of time for such discussions.

Do not discuss the terms of the sale, occupancy, or related matters with the buyer.

Refer these questions to our agent. The answers given may make or break the sale.

The Right Selling Price Affects Your Bottom Line

When you're selling your home, the price you set is a critical factor in the return you'll receive. That's why you need a professional evaluation from an experienced Realtor®. This person can provide you with an honest assessment of your home, based on several factors, including:

Market conditions
Condition of your home
Repairs or improvements
Selling timeframe

In real estate terms, market value is the price at which a particular house, in its current condition, should sell within 30 to 90 days.
If the price of your home is too high, this could cause several things:

Limits buyers. Potential buyers may not view your home because it appears to be out of their buying range.
Limits showings. Other salespeople may be more reluctant to view your home.
Used as leverage. Other Realtors® may use this home to drive the sale of other homes that are better-priced.
Extended stay on the market. When a home is on the market too long, it may be perceived as defective. Buyers may wonder, what's wrong, or why hasn't this sold?
Lower price. An overpriced home, still on the market beyond the average selling time, could lead to a lower selling price. To sell it, you will have to reduce the price sometimes several times. In the end, you'll probably get less than if it had been properly priced in the first place.
Wasted time and energy. A bank appraisal is most often required to finance a home.

Realtors® have known it for years well-kept homes that are properly priced in the beginning always get you the fastest sale for the best price! And that's why you need a professional to assist you in the selling of your home.

Often, in a seller's market, homes that are priced slightly below market value initially will sell for more, simply because of the extra interest they incite. This can be a risk, however, and when it comes to such a decision, an experienced, trusted Realtor® is your best ally.

New Legislation for Rental Properties

IMPORTANT NOTICE TO OWNERS/OPERATORS OF RENTAL HOMES IN THE COMMONWEALTH OF THE BAHAMAS

EFFECTS OF AMENDMENTS TO THE HOTELS ACT, THE REAL PROPERTY TAX ACT AND THE INTERNATIONAL PERSONS LANDHOLDING ACT

Recent amendments to the Hotels Act, Ch. 288, effective July 13, 2009 and August 5, 2009, have introduced the new definition of "owner-occupied rental home" and, along with recent amendments to the Real Property Tax Act, Ch. 375 and the International Persons Landholding Act, Ch. 140, owners are being afforded a number of benefits and incentives.

Under the Hotels Act and Real Property Tax Act and International Persons Landholding Act, respectively, owner-occupied rental home and owner-occupied property are defined as "property occupied by a person who being the owner in fee simple or a mortgagor in possession, occupies and resides in such property exclusively as a dwelling house on a permanent or seasonal basis".

Owners wishing to benefit from these amendments must apply for a licence to operate their premises by completing an Application for Licence to Operate under the provisions of the Hotels Act.

BENEFITS OF THESE AMENDMENTS
(i) Real Property Taxes on licensed owner-occupied rental homes will be calculated as follows:
(a) the first $250,000 of the market value of the property shall be exempt;
(b) properties exceeding $250,000 but are not in excess of $500,000 will be taxed at a rate of 3/4% per annum of the market value, as compared to the commercial rate of 1%
(c) properties exceeding $500,000 but are not in excess of $5 million will be taxed at a rate of 1% per annum of the market value, as compared to the commercial rate of 2%
(d) properties exceeding $5 million will be taxed at a rate of 1/4% per annum of the market value, as compared to the commercial rate of 2%

(ii) The Real Property Tax Act amendment also provides for the waiver of surcharges under certain circumstances in relation to licensed owner-occupied property:
(a) any surcharge which has accumulated with respect to owner-occupied property of [value] up to $250,000 shall be waived
(b) the surcharge shall be waived in relation to owner-occupied property which exceeds $250,000 [in value], if the outstanding real property tax is paid on or before December 31, 2009.

Revival of Surcharge

The amendment provides for the revival of surcharge and, if after December 31, 2009 any real property tax remains outstanding in respect
of:

(a) owner -occupied property with a market value of up to $250,000
(b) owner-occupied property which excess of $250,000
(c) other property,

then the owner of such property, shall be liable to pay a new surcharge of 5% of such tax per annum.

REQUIREMENTS TO ACCESS THESE BENEFITS

1. Owners of owner-occupied rental homes wishing to take advantage of the reduced real property taxes must provide the Chief Valuation Officer, Business Licence/Valuation Unit, Ministry of Finance, P. 0.
Box N-13, Frederick Street, Nassau, Bahamas, tel: 242-325-1171; fax:
242-328-8003; e-mail: busrptadministration@bahamas.gov.bs with the Assessment Number of their property on or before October 15, 2009.
Where the property is owned by a company, in order to be re-classified as residential, the beneficial owner shall submit to the Chief Valuation Officer an affirmation stating that such property is occupied by the beneficial owner exclusively as a dwelling house on a permanent or seasonal basis, which can be downloaded on-line at www.tourismtoday. com/prelim/oorh. Real property tax billings issued in October 2009 will reflect any change in the status of owner-occupied rental homes provided the information is submitted on or before October 15, 2009 to the Valuation Department.

2. In addition, owner-occupied rental homes must operate under a licence obtained from the Chief Licensing Officer, Hotels Licensing Department, Ministry of Tourism, Nassau, P. O. Box N-3701, Nassau, Bahamas, tel: 242-356-5216; fax:
242-356-5904; e-mail: mmosshepburn@bahamas.com or, in the case of Grand Bahama Island and the Out/Family Islands, the Local Government Administrator's Office in the relevant District.

Application forms, along with the Form 1C, may be downloaded on-line at www.tourismtoday.com/prelim/oorh, or collected from the Hotel Licensing Department, Ministry of Tourism, Nassau, or the relevant Local Government Administrator's Office.

3. All licensed operators/owners of owner-occupied rental homes shall collect a hotel guest tax of six percent 6% of the total room rate for the period during which each guest is provided with sleeping accommodation at such owner-occupied home of one or more bedrooms.

Such tax shall take immediate effect and shall, by law, be paid by the
15 th of each month thereafter.

4. The hotel guest tax so collected by the operator (or designated property manager/ management company/caretaker) must be paid to the Chief Licensing Officer, Hotels Licensing Department, P. O. Box N-3701, Nassau Court, Nassau, Bahamas, or relevant Administrator's Office on Grand Bahama or the Out/Family Islands, along with a completed Monthly Return of Motel Guest Tax form (Form X), which may be downloaded on-line at www.tourismtoday.corn /preiim/oorh, no later than the fifteenth of the month next following the month to which the return relates. Payments are to be made payable to the Bahamas Public Treasury.

Additionally, amendments to The International Persons Landholding Act

i) require that fees payable under the provisions of the Act by non-Bahamians, instead of being paid to the Secretary to the Board, be paid directly to the Public Treasury and the Secretary to the Board be provided evidence that payment was made to the Treasury.

ii) has replaced "single family dwelling" with "owner-occupied property".

When Your Selling Price is too High, Beware!

So you've decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller, you schedule appointments with three local listing agents who've been hanging stuff on your front doorknob for years. Each Realtor comes prepared with a "Competitive Market Analysis" on fancy paper and they each recommend a specific sales price.

Amazingly, a couple of the Realtors have come up with prices that are lower than you expected. Although they back up their recommendations with recent sales data of similar homes, you remain convinced your house is worth more. When you interview the third agent's figures, they are much more in line with your own anticipated value, or maybe even higher. Suddenly, you are a happy and excited home seller, already counting the money.

But which Realtor do you choose?
If you're like many people, you pick Realtor number three. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that is willing to start out at your price and if you need to drop the price later, you can do that easily, right? After all, everyone else does it!

The truth is that you may have just met an agent engaging in a questionable sales practice called "buying a listing." He "bought" the listing by suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, he is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price.

Why do agents "buy" listings?
There are basically two reasons. A well-meaning and hard working agent can feel pressure from a homeowner who has an inflated perception of his home's value. On the other hand, there are some agents who engage in this sales practice routinely.
Whichever the case, if you start out with too high a price on your home, you may have just added to your stress level, and selling a home is stressful enough. There will be a lot of "behind the scenes" action taking place that you don't know about.
Contrary to popular opinion, the listing agent does not usually attempt to sell your home to a homebuyer. That isn't very efficient. Listing agents market and promote your home to the hordes of other local agents who do work with homebuyers, dramatically increasing your personal sales force. During the first couple of weeks your home should be a flurry of activity with buyer's agents coming to preview your home so they can sell it to their clients.

If the price is right.

If you and your agent have overpriced, fewer agents will preview your home. After all, they are Realtors, and it is their job to know local market conditions and home values. If your house is dramatically above market, why waste time? Their time is better spent previewing homes that are priced realistically.
Later, when you drop your price, your house is "old news." You will never be able to recapture that flurry of initial activity you would have had with a realistic price. Your house could take longer to sell.

Even if you do successfully sell at an above market price, your buyer will need a mortgage. The mortgage lender requires an appraisal. If comparable sales for the last six months and current market conditions do not support your sales price, the house won't appraise. You deal falls apart. Of course, you can always attempt to renegotiate the price, but only if the buyer is willing to listen. Your house could go "back on the market."

Once your home has fallen out of escrow or sits on the market awhile, it is harder to get a good offer. Potential buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.

Plus, remember those two conscientious agents who got aced out of the listing? If your listing agent routinely engages in "buying" listings, he has probably aced out scores of other agents in the same way. Being human, Realtors talk to each other. If they don't like your listing agent, not as many of them will be showing your home.
In short, you may have ended up with an agent who was good at selling you, but not good at selling your house. And you're going to pay them a commission for it.
It is human nature for you to want the highest price for your home. However, when you choose the agent who promises what you want to hear, it often leads to stress and frustration. Most of the time, it will take you longer to sell your home. Possibly, you will end up selling at a lower price instead.

Or maybe as a result of reading this article, you will choose one of the "good" Realtors in the first place. They are out there, you know.

copyright 2000 by Terry Light and RealEstate ABC