Paying off bond

[Bleudeturquoise]

Is paying off bond a good investment when it comes time to sell your home?

[CWGUY]

Is paying off bond a good investment when it comes time to sell your home?

Good question, but someone beat you to it last month and several dozen times before that.

Here last months thread: https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/bond-payoff-233470/?highlight=bond. ;)

[Boomer]

Is paying off bond a good investment when it comes time to sell your home?



Hi Bleu,

There are varying reasons why individuals choose to pay off the bond. But, in my opinion, paying it off and expecting to recoup the amount if you sell is not realistic. Therefore, I do not see it as a good investment--from the standpoint of Return on Investment.

While a paid-off bond might tip the scales for a buyer who has found more than one house to consider, the fact remains that the comps are the comps. It is what the market will bear and sellers need to compete in several ways.

(Buyers who insist upon looking only at houses with paid bonds are limiting themselves tremendously by eliminating a whole bunch of homes that could be just right for them.)

In Post #2 here in this thread, CWGUY provided a link to a recent thread on this topic. That thread was one of the better discussions we have had around here lately. But I see that thread has been closed. You might want to take the time to open CWGUY's link and read through it for more information, and opinions from different angles.

[Rango]

No.

[Challenger]

The fact is that an outstanding bond balance must be added to the purchase price of a house in order to determine the full consideration. The appraisal is a commentary on value -not price

$250,000 purchase price with no existing bond= $250,000 total compensation to be paid
$250,000 " " with $10,000 bond = $260,000 total compensation paid

[biker1]

It is impossible to answer that question without additional information. You should do your own analysis. If you know how long you will be in the house, you can start to put together some numbers. For example, in my case, the bond was $23,483. After 10 years, I will have made payments of $16,160 in interest (non tax deductible), principle, and managements fees and have a bond balance of $19,042. In other words, I will have only paid $4441 towards the principle. The bond fee including management charge is $1616 per year. You can make some assumptions about the future value of the money you would use to pay off the bond. You can also compute the future value of taking the money you would save each year by paying off the bond ($1616) and investing that. If you can itemize your deductions, you can also take out a home equity loan and pay off the bond (at probably a lower interest rate) and the interest will be tax deductible. Nobody can really tell you what makes sense because there are a lot of variables. If you do pay off the bond and then go to sell your house, hopefully the sales agents can explain that the higher price you are asking is compensated for by the lower annual cost since a bond payment won't need to be made. Spreadsheets are useful for running some scenarios.

Is paying off bond a good investment when it comes time to sell your home?

[retiredguy123]

Is paying off bond a good investment when it comes time to sell your home?
Definitely not. If you don't pay off the bond, the buyer has two options: pay off the bond or keep it. If you do pay off the bond, the buyer only has one option: no bond. In terms of making a sale, this is a no brainer.

[Sandtrap328]

If a prospective buyer has two identical homes to choose from selling at the same price and one has a $15,000 bond on it and the other has no bond - which will the buyer choose?

I purchased a resale with no bond 8 years ago. Perfect home on a golf course. Several friends purchased new homes at the same time with $23,000 bonds. They had to buy items already in a resale like more landscaping, gutters and downspouts, and had less desirable lots.

Resales are the way to go.

Maybe the guy who thinks he lost another amenity will sell his? :shrug:

[VillagerNut]

Your logic is good as far as what is right for you to do financially. But your logic is flawed when it comes time to sell the house. You cannot ask more money just because the bond is paid if there are other equal homes to yours on the market. Bond paid on a house will help it sell faster, but not for a higher price!

[RickeyD]

If a prospective buyer has two identical homes to choose from selling at the same price and one has a $15,000 bond on it and the other has no bond - which will the buyer choose?



I purchased a resale with no bond 8 years ago. Perfect home on a golf course. Several friends purchased new homes at the same time with $23,000 bonds. They had to buy items already in a resale like more landscaping, gutters and downspouts, and had less desirable lots.



Resales are the way to go.



Maybe the guy who thinks he lost another amenity will sell his? :shrug:



If and only if both houses are virtually identical in a virtually identical neighborhood located in a virtually identical location. If I liked the house with a bond more, I'd buy it.

[rustyp]

How much value do you put on having an entirely debt free retirement ?- No mortgage, no car payment, no bond, etc. For me the money I make by freeing up the bond even at the expense of loosing some at sale time (but I'm not selling) plus no debt is a wonderful I can sleep at night feeling. Priceless !

[MAITAIMIKE]

Is paying off bond a good investment when it comes time to sell your home?
I do not think it is wise if you are planning to resell.Potential buyers seem to ignore the fact that the bond has been paid.

[manaboutown]

I do not think it is wise if you are planning to resell.Potential buyers seem to ignore the fact that the bond has been paid.

:agree:

[Boomer]

If you want to spend some money on a house you probably will sell, you might think about spending it on adding popular upgrades and/or updates that you can enjoy while you live there. (Yeah, I know enjoying a paid off bond is the top choice for some owners but when it comes to selling, what a buyer sees usually takes top priority.)

And on the more practical side, a new roof can go further for a buyer than a paid bond. With something like a new roof, the seller has gone through the hassle and the noise so the buyer does not have to.

I think there are many people in TV who could pay off the bond if they so chose but they don't want to--for all those various reasons previously stated in every bond thread ever here on TOTV.

[Harry Gilbert]

If you are going to keep the bond at least check with a tax professional and see if converting it to a home equity loan would work in your favor.

[Chi-Town]

I do not think it is wise if you are planning to resell.Potential buyers seem to ignore the fact that the bond has been paid.
That is so true. There were no bonds where I came from; the costs were figured in the sell price. So when I noticed a one line blurb in the sales sheet that said no bond I thought that's nice, and that was it. The Villages sales rep never mentioned it.

Sent from my VS995 using Tapatalk

[Boomer]

That is so true. There were no bonds where I came from; the costs were figured in the sell price. So when I noticed a one line blurb in the sales sheet that said no bond I thought that's nice, and that was it. The Villages sales rep never mentioned it.

Sent from my VS995 using Tapatalk

And not only that but when we see the annual cost on the Sumter bill with the property taxes, annual bond payment, etc. it is so much less expensive, in total, than the taxes only, where most of us came from, that it does not get much attention because it can be all so relative.

We pay a little over 1300 bucks on the annual bond bill which reflects a 4.25 interest rate for our district. The amortization is almost, but not quite, to the point where more will go to the principal than to interest. I think the bond pay off would be around the mid-teens of thousands. I think that would be a lot to try to add to a listing price and still remain competitive.

Buyers do need to be well aware though, especially on new builds and also with the variation in interest rate from district to district. A buyer should ask about not only the total amount of the bond but also about the total annual amount due on the tax bill if it includes the unpaid bond amount. There can be a very big difference on what needs to be budgeted annually if a bond is unpaid. A new build in a certain area might have a much bigger annual bond bill than our pre-owned home in the middle section of TV.

(I started a thread here a few weeks ago with directions on how to look up the bond rate and amortization on specific properties. I would link that thread here but I am on my iPad and I keep forgetting to learn how to link on the iPad.)

[kstew43]

also don't forget every neighborhood has a maintence fee as well....I have seen them $350 all the way to $850 a year.....shows on your taxes as well.

[Challenger]

I do not think it is wise if you are planning to resell.Potential buyers seem to ignore the fact that the bond has been paid.

How can anyone prudently ignore a lien against their property ranging from $X up to more than $30,000?

If you bought a $50, 000 car that required you to pay another $5000 over the next three years would you take that deal if the dealer next door was selling the same car for $50,000 with no further payment.

I have a bridge to sell !!!

[RickeyD]

How can anyone prudently ignore a lien against their property ranging from $X up to more than $30,000?



If you bought a $50, 000 car that required you to pay another $5000 over the next three years would you take that deal if the dealer next door was selling the same car for $50,000 with no further payment.



I have a bridge to sell !!!



If you like your bond, you can keep your bond. That's a promise !

[Boomer]

I don't want to buy any bridges. And I don't want to buy just any house only because the bond is paid. And neither do most other people. That's just the way it is. Obviously there are numbers to be crunched in any home-buying decision, but a paid bond will not be of primary influence.

The OP asked if a paid bond is a good investment if you are going to sell the house. No. No. No......Well, rarely, if not never.

[rustyp]

Sleep tight - oh what a beautiful feeling

[redwitch]

Bonds are pretty much a way of life in Northern California. The rule of thumb for most of was: planning to stay in that house for more than ten years? Pay off as much of the bond as possible. Planning to sell in the near future (starter house, investment property, job transfer in the future? Just make the monthly payment. Might be forever home but not really sure? Pay at least double the monthly amount due but don't pay it off all it once. You won't recoup this large cash outlay by selling the house.

[Bogie Shooter]

There are so many ways to say the same thing.
These 3 threads have 201 posts.................
If you can't find it here, you can't find it anywhere.

https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/bond-payoff-233470/?highlight=paying+bond

https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/bond-bond-interest-deductiblitiy-216727/?highlight=paying+bond

https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/when-pay-off-home-bond-201443/?highlight=paying+bond

[784caroline]

Is paying the Bond off a wise decision...probably not financially but there are may other factors one should consider.

-- If you have $15-25K sitting around earning .01% interest and plan to stay in your house for more than 5-8 years and you are in decent health, no immediate financial obligations, ..pay it off.

-- You most likely will not get the money back when or if you sell BUT it will make you house more appealing to a potential buyer not having to pay a bond.

-- What is the value of peace of mind not have a debt owed to someone?

[autumnspring]

If and only if both houses are virtually identical in a virtually identical neighborhood located in a virtually identical location. If I liked the house with a bond more, I'd buy it.

We THINK, that you buy a home with your mind. It is in reality, your mind and your heart.

For most homes, OUTSIDE THE VILLAGES, the bond, which pays for the roads etc, is in the price you pay for the home-the lot and the house.

Someone mentioned a bond of 23,000. The heart forgets or does not fully see that if a house is 300,000 and has a 23,000 bond THE REAL PRICE is 323,000. Actually, it is a little more than that as if you do not pay off the bond, while few people here ask or know, the interest on the bond is far higher than mortgage rates.

Interestng-these bonds were resold on the open market as TAX FREE BONDS.
There have been law suits-the bonds have been called-result-I DON'T KNOW.

[ColdNoMore]

The bottom line is, that there is no right/wrong...on whether to pay off a bond.


It simply boils down to a persons preference...and individual situation.


Those who argue adamantly otherwise...probably have other agendas. :shrug:

[RickeyD]

Is paying the Bond off a wise decision...probably not financially but there are may other factors one should consider.

-- If you have $15-25K sitting around earning .01% interest and plan to stay in your house for more than 5-8 years and you are in decent health, no immediate financial obligations, ..pay it off.

-- You most likely will not get the money back when or if you sell BUT it will make you house more appealing to a potential buyer not having to pay a bond.

-- What is the value of peace of mind not have a debt owed to someone?

Capital One 360 & other online FDIC banks are paying greater than 2.3% on 5 year CD's. Chase, BOA and others of that ilk pay virtually nothing to keep your money.

[784caroline]

My point was if your receiving less in interest than what you are paying on the bond (probably between 4-5%) it may be wise to pay it off. Who knows where interest rates on CDs next month never mind 5 years out..

[biker1]

If you stay in the house for 15 years, the payments you made will have been enough to pay off the bond but you will still have a substantial balance remaining. If you can estimate how long you will stay in the house, the future value of the money you will have used to pay off the bond, and the future value of investing the annual savings (from paying off the bond), you can at least start to collect numbers to make a rational decision.


My point was if your receiving less in interest than what you are paying on the bond (probably between 4-5%) it may be wise to pay it off. Who knows where interest rates on CDs next month never mind 5 years out..

[RickeyD]

My point was if your receiving less in interest than what you are paying on the bond (probably between 4-5%) it may be wise to pay it off. Who knows where interest rates on CDs next month never mind 5 years out..



Problem comes with human nature. If I have a bulk amount of let's say 25K, I'll either want to buy a new car OR sock it away in a safe investment. Conversely, if I'm saving let's say $1,200 a year because I payed off my bond that's a hundred bucks a month I'm probably gonna **** away every month on whatever. I'd rather pay the hundred bucks a month for the bond and look at a bank statement of $25,000 in my name.
Bottom line, all the real estate experts say DON'T pay off the bond. Another expert says "life happens".

[rustyp]

My gut tells me there is some percentage of not paying off the bond proponents that can't afford to do it. Thus comfort in thinking they are smart not poor. This is akin to people telling me it makes sense to take out a mortgage. Justification - low rates/write offs. Yes but where are you making money at higher rates. Then the mother of all question that gets the blank stare - how much does the required life insurance on that mortgage cost at your age ? So what is the real effective mortgage rate ?

[RickeyD]

My gut tells me there is some percentage of not paying off the bond proponents that can't afford to do it. Thus comfort in thinking they are smart not poor. This is akin to people telling me it makes sense to take out a mortgage. Justification - low rates/write offs. Yes but where are you making money at higher rates. Then the mother of all question that gets the blank stare - how much does the required life insurance on that mortgage cost at your age ? So what is the real effective mortgage rate ?



Not a good example. If you pay off the bond then move, your money is gone forever. Not so with the mortgage. Your house equity pays it down.

[Challenger]

Problem comes with human nature. If I have a bulk amount of let's say 25K, I'll either want to buy a new car OR sock it away in a safe investment. Conversely, if I'm saving let's say $1,200 a year because I payed off my bond that's a hundred bucks a month I'm probably gonna **** away every month on whatever. I'd rather pay the hundred bucks a month for the bond and look at a bank statement of $25,000 in my name.
Bottom line, all the real estate experts say DON'T pay off the bond. Another expert says "life happens".

Can you name a "Real Estate Expert" that says don't pay off the bond? Not a self described expert, please.

[Boomer]

Problem comes with human nature. If I have a bulk amount of let's say 25K, I'll either want to buy a new car OR sock it away in a safe investment. Conversely, if I'm saving let's say $1,200 a year because I payed off my bond that's a hundred bucks a month I'm probably gonna **** away every month on whatever. I'd rather pay the hundred bucks a month for the bond and look at a bank statement of $25,000 in my name.
Bottom line, all the real estate experts say DON'T pay off the bond. Another expert says "life happens".


Aw, RickeyD, it is so sweet of you to call me a real estate expert. Thanks. :)

(I don't know why some of those who choose to pay off the bond get so offended by those who choose to view ROI differently and/or figure they will probably sell and will need to list competitively. Geez.)

[Challenger]

Aw, RickeyD, it is so sweet of you to call me a real estate expert. Thanks. :)

(I don't know why some of those who choose to pay off the bond get so offended by those who choose to view ROI differently and/or figure they will probably sell and will need to list competitively. Geez.)

"list competitively" sounds like a term to disguise the real financial impact of the bond.

I applaud the use of the Bond mechanism by the developer as a financing method. What I object to mainly is the lack of knowledge that real estate sales people have of the financial meaning for buyers and thier obvious attempt to obscure the real costs to buyers. I believe in many cases their obfuscations border on fraud.
To not fully disclose that an existing bond balance "must " be added to the final sales price in determining the real price of the home is avoiding full disclosure.

[Bay Kid]

To me a bond is like having credit card debt.

[Challenger]

To me a bond is like having credit card debt.

Even more , it is a superior lien on your home

[Boomer]

"list competitively" sounds like a term to disguise the real financial impact of the bond.

I applaud the use of the Bond mechanism by the developer as a financing method. What I object to mainly is the lack of knowledge that real estate sales people have of the financial meaning for buyers and thier obvious attempt to obscure the real costs to buyers. I believe in many cases their obfuscations border on fraud.
To not fully disclose that an existing bond balance "must " be added to the final sales price in determining the real price of the home is avoiding full disclosure.

Actually, Challenger, I also believe there is a lack of understanding of the bond among a significant percentage of buyers, coupled with a significant percentage of agents with an unwillingness to educate. Buyers must know what questions to ask. I think it is a good idea to look up the bond information for a property by specifics. I started a thread a few weeks ago with instructions on how to do that. (I wish I would not keep forgetting to learn how to link on my iPad or I would link my own old thread here. ) I take financial decisions very seriously. Oh my! I just looked at this post in "preview." Please forgive the bold type. I am not yelling at you. :)

[Bogie Shooter]

Actually, Challenger, I also believe there is a lack of understanding of the bond among a significant percentage of buyers, coupled with a significant percentage of agents with an unwillingness to educate. Buyers must know what questions to ask. I think it is a good idea to look up the bond information for a property by specifics. I started a thread a few weeks ago with instructions on how to do that. (I wish I would not keep forgetting to learn how to link on my iPad or I would link my own old thread here. ) I take financial decisions very seriously. Oh my! I just looked at this post in "preview." Please forgive the bold type. I am not yelling at you. :)

Here it is.
https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/bond-bond-how-find-numbers-235561/

[RickeyD]

Can you name a "Real Estate Expert" that says don't pay off the bond? Not a self described expert, please.



Ok, anyone with the financial aptitude and/or professional designation in real property transactions will tell you that a house with a prematurely payed off bond will not sell for more than a similar house with the bond intact. A real estate appraisal looks at location, type of construction and square footage to determine value, only. There is no input line on an appraisal form for a bond.
Anyone who pays off the bond is stuck with that hot potato forever, the action can not be passed on.

[Boomer]

Here it is.
https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/bond-bond-how-find-numbers-235561/

Thank you, Bogie. You are a gentleman and a scholar. :)

(I must give warning that I might be going on and on in this thread for a while because today I am confined to quarters, with my iPad and my Kindle. Right now, the iPad is winning my attention.)

[Challenger]

Ok, anyone with the financial aptitude and/or professional designation in real property transactions will tell you that a house with a prematurely payed off bond will not sell for more than a similar house with the bond intact. A real estate appraisal looks at location, type of construction and square footage to determine value, only. There is no input line on an appraisal form for a bond.
Anyone who pays off the bond is stuck with that hot potato forever, the action can not be passed on.

Data instead of local lore would be more believable. Sales people reap the advantage of being able to quote a lower price when the bond is intact. They have no incentive to explain fully what he buyer is really paying.

[Boomer]

"list competitively" sounds like a term to disguise the real financial impact of the bond.............
.................



Hi Challenger, I'm back. I already responded to the last part of your post, thus the dotted line to indicate I cut it out for this time.

Anyway, I was not trying to "disguise" anything. If I may repeat myself....self....self (that's an echo) I am addressing only the ROI of a paid off bond when selling.

When listing a home for sale, a seller has to be able to compete and not overprice the market. Sitting self-righteously on a paid off bond while insisting it must be added into the list price, could make 'sitting' the operative word there. Time is money, too.

The market is the market, whether we like it or not.

[RVRoadie]

There is no doubt that convincing a future buyer that your house is worth more because the bond is paid is a hard sell. It is just human nature to lump an unpaid bond in with future property taxes, which is where it is collected.

For me, the biggest advantage to paying off a bond, is that it is a disincentive to be looking at new houses. How many residents have gone out to "look" at open homes and ended up buying. If you are happy with your house and you have the money, why not pay it off. Let your heirs worry about it.

[Greg Nelson]

As we're going to be looking to buy having the bond paid has its attraction. Cost of operation is affected by taxes (bond) too

[Love2Swim]

The way the Villages sales agent explained it to us, is if someone is looking at two similiar pre-ownedhomes for sale, one has the bond paid off, and the other doesn't, which home do you think the person is going to buy? Obviously having the bond paid off makes it more attractive. But I agree, you can't automatically add the cost of the paid bond into your asking price. People are funny about selling their homes. They have a certain idea in their mind as to what its worth and they don't want to face reality sometime. I've seen people hang on to a house for two years trying to sell it at a price that is too high. When you add in the carrying costs for that amount of time - taxes, insurance, etc., they would have been better off dropping their price in the first place.

If you know you're only going to be in the home a few years, then yes, I probably wouldn't pay off the bond. If you're not sure, it can be surprising how time flies. We paid off our bond, thinking maybe we'd move in six or seven years. Its been over ten years now. If we had kept on making bond payments, we'd end up paying for the bond twice. I'm glad we made the smart decision (for our situation) and didn't end up paying all that extra interest. We paid off our home up north in 15 years to avoid paying additional interest, and I've paid for my automobiles without taking a car loan. I personally hate paying out the interest. But everyone is different.

[Greg Nelson]

I /we wouldn't buy a villa that was overpriced with a bond pay off

[RickeyD]

I wouldn't pay extra for any house with the bond payed off[emoji383]. I see no value in that, negotiations start where we subtract from the asking price the bond payoff at that moment in time. If the seller doesn't like it, I'll walk.
Any savvy buyer would do the same.

[Putt4Dough]

I wouldn't pay extra for any house with the bond payed off[emoji383]. I see no value in that, negotiations start where we subtract from the asking price the bond payoff at that moment in time. If the seller doesn't like it, I'll walk.
Any savvy buyer would do the same.

You have just contradicted yourself. You just stated paid bond has no value, which is a joke, and then stated that you negotiate by deducting unpaid bond price from seller's asking price. So if bond is paid, you are going to pay more for the home.

Your earlier statements saying that no experienced accountant or real estate person would advocate paying of the bond is also ridiculous. No CPA is going to tell you to pay 4-7% interest on a tax, which is how CDDs or bonds are collected. Who wants to pay double for a non asset that does not appreciate.

[Boomer]

There is no doubt that convincing a future buyer that your house is worth more because the bond is paid is a hard sell. It is just human nature to lump an unpaid bond in with future property taxes, which is where it is collected.

For me, the biggest advantage to paying off a bond, is that it is a disincentive to be looking at new houses. How many residents have gone out to "look" at open homes and ended up buying. If you are happy with your house and you have the money, why not pay it off. Let your heirs worry about it.


So you are using a paid off bond as a behavioral modification technique. I must say, you sure do think outside the box. :thumbup:

[Challenger]

I wouldn't pay extra for any house with the bond payed off[emoji383]. I see no value in that, negotiations start where we subtract from the asking price the bond payoff at that moment in time. If the seller doesn't like it, I'll walk.
Any savvy buyer would do the same.

You statement here just validates everything I have said. Hmnnn!!!

[Boomer]

I wouldn't pay extra for any house with the bond payed off[emoji383]. I see no value in that, negotiations start where we subtract from the asking price the bond payoff at that moment in time. If the seller doesn't like it, I'll walk.
Any savvy buyer would do the same.



You statement here just validates everything I have said. Hmnnn!!!


I say, "Hmm," too.......

I think what actually happened is that Rickey misplaced a prepositional phrase. If "at that moment in time" (actually there are two prepositions and objects in that one) is moved to after the word 'start' it then becomes an adverbial prepositional phrase because in that position it would modify the verb 'start'.

BUT "at that moment in time" in its current placement in the sentence is acting as an adjective phrase, modifying the noun 'payoff' and making it look like "payoff" means zero. I don't think he means he is subtracting zero. It just looks that way because there is a misplaced modifier.

I am deriving my conclusion from context clues throughout this thread.

I don't know if I will get "validated" but my money is on a misplaced prepositional phrase.

You're welcome.

[RickeyD]

You have just contradicted yourself. You just stated paid bond has no value, which is a joke, and then stated that you negotiate by deducting unpaid bond price from seller's asking price. So if bond is paid, you are going to pay more for the home.



Your earlier statements saying that no experienced accountant or real estate person would advocate paying of the bond is also ridiculous. No CPA is going to tell you to pay 4-7% interest on a tax, which is how CDDs or bonds are collected. Who wants to pay double for a non asset that does not appreciate.



You misunderstand. The bond has no value yet the seller is adding his bond payoff to the price of his house thinking it adds value to his house. I would subtract from his asking price what he added and then negotiate down from there. I'm not in the habit of contradicting myself nor am I in the habit of thinking Irrationally when it comes to money.

[twoplanekid]

The appraised value on a house in the Villages does not include the residue bond balance.

[RickeyD]

The appraised value on a house in the Villages does not include the residue bond balance.



Nor does it anywhere the Kings English is spoken. Payed off future debt has no value to anyone other than the guy who payed it off.

[RickeyD]

I say, "Hmm," too.......

I think what actually happened is that Rickey misplaced a prepositional phrase. If "at that moment in time" (actually there are two prepositions and objects in that one) is moved to after the word 'start' it then becomes an adverbial prepositional phrase because in that position it would modify the verb 'start'.

BUT "at that moment in time" in its current placement in the sentence is acting as an adjective phrase, modifying the noun 'payoff' and making it look like "payoff" means zero. I don't think he means he is subtracting zero. It just looks that way because there is a misplaced modifier.

I am deriving my conclusion from context clues throughout this thread.

I don't know if I will get "validated" but my money is on a misplaced prepositional phrase.

You're welcome.



I hated English class then. I still hate it.

[dbussone]

Nor does it anywhere the Kings English is spoken. Payed off future debt has no value to anyone other than the guy who payed it off.



I think we are currently using the Queen's English. All y'all come back now. Ya hear!


Sent from my iPad using Tapatalk Pro

[RickeyD]

I say, "Hmm," too.......

I think what actually happened is that Rickey misplaced a prepositional phrase. If "at that moment in time" (actually there are two prepositions and objects in that one) is moved to after the word 'start' it then becomes an adverbial prepositional phrase because in that position it would modify the verb 'start'.

BUT "at that moment in time" in its current placement in the sentence is acting as an adjective phrase, modifying the noun 'payoff' and making it look like "payoff" means zero. I don't think he means he is subtracting zero. It just looks that way because there is a misplaced modifier.

I am deriving my conclusion from context clues throughout this thread.

I don't know if I will get "validated" but my money is on a misplaced prepositional phrase.

You're welcome.



"At that moment in time" refers to the bond payoff as a moving target. Year after year the payoff amount is decreased until its satisfied. If a seller pays down his bond in year one at 25K then decides to sell 4 years later, that 25K has devalued itself by 3K. The seller doesn't see that so he attempts to price his house at 25K above its appraised value so as to recoup. False logic from its inception that only this seller can truly appreciate and the savvy mock. Bottom line, bond is future debt and debt has NO value.

[Boomer]

OK Rickey, but I knew you had been misunderstood. And, hey, even though I am not being validated, at least I got to write a tedious post about prepositional phrases.

twoplane makes a good point about appraisal value.

All in all, this thread has been a good one for anybody who wants to learn more about the bond and where they fit in the scheme of things. (Maybe 'scheme' is the operative word there.)

Anyway, like somebody said earlier somewhere, whether or not to pay off the bond quite simply depends..........

[Putt4Dough]

You misunderstand. The bond has no value yet the seller is adding his bond payoff to the price of his house thinking it adds value to his house. I would subtract from his asking price what he added and then negotiate down from there. I'm not in the habit of contradicting myself nor am I in the habit of thinking Irrationally when it comes to money.

You are totally clueless. First of all someone offering financial advice should know the correct term is paid, not "payed"

Go to any bank or mortgage broker and ask them if a paid off bond has any "value" in their calculations for a loan. If an unpaid bond exists they will need to see your ability to pay it whether in cash or over time. One of the top three questions from any prospective buyer in Florida is "Does it have a CDD or bond, what is the amount?" They then add this to the purchase price.

Thinking a home with an unpaid bond has the same value or price as a home with a paid bond (no extra tax debt) is completely false.

[Challenger]

You are totally clueless. First of all someone offering financial advice should know the correct term is paid, not "payed"

Go to any bank or mortgage broker and ask them if a paid off bond has any "value" in their calculations for a loan. If an unpaid bond exists they will need to see your ability to pay it whether in cash or over time. One of the top three questions from any prospective buyer in Florida is "Does it have a CDD or bond, what is the amount?" They then add this to the purchase price.

Thinking a home with an unpaid bond has the same value or price as a home with a paid bond (no extra tax debt) is completely false.
Yep

[kstew43]

went to an open house today and the sales agent told us the bond is tax deductable IF you have the right tax accountant. I told him he was mistaken and the only way to make the bond deductable is to refiance the bond.

once again, in front of other people looking at the home as well..... sales agent said I was mistaken...........

Village Sales Specialist.....sure you are.....

[RickeyD]

You are totally clueless. First of all someone offering financial advice should know the correct term is paid, not "payed"

Go to any bank or mortgage broker and ask them if a paid off bond has any "value" in their calculations for a loan. If an unpaid bond exists they will need to see your ability to pay it whether in cash or over time. One of the top three questions from any prospective buyer in Florida is "Does it have a CDD or bond, what is the amount?" They then add this to the purchase price.

Thinking a home with an unpaid bond has the same value or price as a home with a paid bond (no extra tax debt) is completely false.

Thanks for the spellcheck. Let me get this straight since I'm totally clueless. A prospective buyer adds the cost of the bond to the purchase price ? Yes, if and only if it is a new house. A resale house in which it's bond is paid off is worth exactly what it's APPRAISED VALUE is, AND you do not pay one cent above it's appraised value because the owner prepaid the bond off and he wants to recoup his mistake. The bond at that point has no value because it doesn't exist, except in the mind of the owner that paid it off by decreased his net worth. Paying off the bond is not the same as partially prepaying his mortgage in which the seller can recoup upon the house sale due to the accelerated amortization.

[Putt4Dough]

Thanks for the spellcheck. Let me get this straight since I'm totally clueless. A prospective buyer adds the cost of the bond to the purchase price ? Yes, if and only if it is a new house. A resale house in which it's bond is paid off is worth exactly what it's APPRAISED VALUE is, AND you do not pay one cent above it's appraised value because the owner prepaid the bond off and he wants to recoup his mistake. The bond at that point has no value because it doesn't exist, except in the mind of the owner that paid it off by decreased his net worth. Paying off the bond is not the same as partially prepaying his mortgage in which the seller can recoup upon the house sale due to the accelerated amortization.

So you think an unpaid bond is cost classified differently by an accountant, banker, mortgage broker, or prospective buyer depending on if home is new or a resale? Yikes!!

House A is 3br 2ba 1700 sq ft with appraised value of $250,000
House B is 3br 2ba 1700 sq ft right next door with same view appraised value of $250,000 plus unpaid bond of $20,000, cost of bond if paid with interest is $40,000. You think you can buy both these homes for same price? Heheh

[twoplanekid]

Yep

Not in my experience!

I had my new house in The Villages apprised by a Florida appraiser in order to secure a loan on the house. The appraiser didn’t include the bond amount into the appraised value of the house. The bond amount has no effect on the appraised value of the house for a mortgage. I am not talking about what value a buyer or seller may place on the house by their feelings about the bond.

[Challenger]

Thanks for the spellcheck. Let me get this straight since I'm totally clueless. A prospective buyer adds the cost of the bond to the purchase price ? Yes, if and only if it is a new house. A resale house in which it's bond is paid off is worth exactly what it's APPRAISED VALUE is, AND you do not pay one cent above it's appraised value because the owner prepaid the bond off and he wants to recoup his mistake. The bond at that point has no value because it doesn't exist, except in the mind of the owner that paid it off by decreased his net worth. Paying off the bond is not the same as partially prepaying his mortgage in which the seller can recoup upon the house sale due to the accelerated amortization.

The Bond only has value to the bond owner. It has no value to the home owner (new or previously occupied).
A CDD Bond is a lien running with the property and is no part of the appraisal . If one buys a house at the appraised value with an existing bond of $ 10,000 He?She has ,in effect, paid $10,000 in excess of the appraised value.
A rational buyer , understanding the real costs of the remaining bond would not normally pay above appraised value.
Buyers usually only would knowingly pay above appraised value when there was some factor other than market value driving their choice, ie emotional attachment to some facet of the property.

[Sandtrap328]

So you think an unpaid bond is cost classified differently by an accountant, banker, mortgage broker, or prospective buyer depending on if home is new or a resale? Yikes!!

House A is 3br 2ba 1700 sq ft with appraised value of $250,000
House B is 3br 2ba 1700 sq ft right next door with same view appraised value of $250,000 plus unpaid bond of $20,000, cost of bond if paid with interest is $40,000. You think you can buy both these homes for same price? Heheh

Which of those two houses would sell the quickest at $250,000? If they are exactly alike, why would the buyer take on an additional $20,000 burden?

[Dailey]

We paid off our bond up front as we did not want to incur the 6% interest. Will remain to be seen if this was a good move.

[RickeyD]

The Bond only has value to the bond owner. It has no value to the home owner (new or previously occupied).

A CDD Bond is a lien running with the property and is no part of the appraisal . If one buys a house at the appraised value with an existing bond of $ 10,000 He?She has ,in effect, paid $10,000 in excess of the appraised value.

A rational buyer , understanding the real costs of the remaining bond would not normally pay above appraised value.

Buyers usually only would knowingly pay above appraised value when there was some factor other than market value driving their choice, ie emotional attachment to some facet of the property.



Yep

[RickeyD]

We paid off our bond up front as we did not want to incur the 6% interest. Will remain to be seen if this was a good move.



It's a roll of the dice, but you knew that going in.

[RickeyD]

So you think an unpaid bond is cost classified differently by an accountant, banker, mortgage broker, or prospective buyer depending on if home is new or a resale? Yikes!!



House A is 3br 2ba 1700 sq ft with appraised value of $250,000

House B is 3br 2ba 1700 sq ft right next door with same view appraised value of $250,000 plus unpaid bond of $20,000, cost of bond if paid with interest is $40,000. You think you can buy both these homes for same price? Heheh



Clueless as to reality. I would tell the owner of the house with the prepaid bond to go suck an egg if he wanted me to make the same stupid mistake he did. Mr. bond payoff was gambling he'd stay in his house till they carried him out. He lost his own bet.

[rustyp]

Clueless as to reality. I would tell the owner of the house with the prepaid bond to go suck an egg if he wanted me to make the same stupid mistake he did. Mr. bond payoff was gambling he'd stay in his house till they carried him out. He lost his own bet.

I would shake the hand of the owner of the unpaid bond house for giving me the privilege of paying $120 / month for 360 months. That prepaid bond homeowner was very selfish not to consider the fact I like debt.

[Putt4Dough]

I would shake the hand of the owner of the unpaid bond house for giving me the privilege of paying $120 / month for 360 months. That prepaid bond homeowner was very selfish not to consider the fact I like debt.

LOL Next the financial geniuses here will tell us to pay property taxes using high interest cash advances from credit cards.

Anyway, for those reading along, here are some numbers to consider (this from another poster in 2013 thread)

If you stay in your house 10-12 years you will have paid out enough $$ to have paid off the entire bond up front. You would save the remaining 18-20 yearly payments.

Even if you stay 7 years you will have paid out over 60% of what if would have taken to pay off the bond initially and you will still owe 91% of the original bond or 23 more yearly payments which you must try to pass on to the next buyer

Since you haven't saved anything and have paid the same $$ out towards the bond now, your 7-8 year old house will have a hugh bond still to be paid while the other home will be a bond paid home. Now which house do we think will sell faster? Both owners paid out almost the same $$ for the bond even if you only stay 7-8 years.

[RickeyD]

LOL Next the financial geniuses here will tell us to pay property taxes using high interest cash advances from credit cards.



Anyway, for those reading along, here are some numbers to consider (this from another poster in 2013 thread)



If you stay in your house 10-12 years you will have paid out enough $$ to have paid off the entire bond up front. You would save the remaining 18-20 yearly payments.



Even if you stay 7 years you will have paid out over 60% of what if would have taken to pay off the bond initially and you will still owe 91% of the original bond or 23 more yearly payments which you must try to pass on to the next buyer



Since you haven't saved anything and have paid the same $$ out towards the bond now, your 7-8 year old house will have a hugh bond still to be paid while the other home will be a bond paid home. Now which house do we think will sell faster? Both owners paid out almost the same $$ for the bond even if you only stay 7-8 years.





I understand you're attempting to justify your decision, I applaud that. But, I did notice you're back pedaling now saying the bond off house may sell quicker, maybe but not for more money. Although, if the house is a ****hole nothing will help, bond or no bond.

[rustyp]

Deep sleep again tonight. So will all you other financial geniuses. The market was up 200+ today thus bragging rights will abound. I'm getting bored of sleeping well every night including all of 2008 and 2009. Talk to me when the DOW is back at 18000.

[New York Transplant]

Since you pay interest on the bond we chose to pay it off...

[ColdNoMore]

It looks like there are a few of us here that sleep like babies...with our choice.

Kewl. :cool:

[Putt4Dough]

I understand you're attempting to justify your decision, I applaud that. But, I did notice you're back pedaling now saying the bond off house may sell quicker, maybe but not for more money. Although, if the house is a ****hole nothing will help, bond or no bond.

I paid cash for a home that the bond was already paid on. :wave:

[rustyp]

LOL Next the financial geniuses here will tell us to pay property taxes using high interest cash advances from credit cards.

Anyway, for those reading along, here are some numbers to consider (this from another poster in 2013 thread)

If you stay in your house 10-12 years you will have paid out enough $$ to have paid off the entire bond up front. You would save the remaining 18-20 yearly payments.

Even if you stay 7 years you will have paid out over 60% of what if would have taken to pay off the bond initially and you will still owe 91% of the original bond or 23 more yearly payments which you must try to pass on to the next buyer

Since you haven't saved anything and have paid the same $$ out towards the bond now, your 7-8 year old house will have a hugh bond still to be paid while the other home will be a bond paid home. Now which house do we think will sell faster? Both owners paid out almost the same $$ for the bond even if you only stay 7-8 years.


An excellent post. I wonder if the do not pay off proponents really digested your post.