"No Bond" is promoted in home sales. But what's the real savings?

[CoupleNCA]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

[Topspinmo]

So do you like giving away 10, 20, 30 ,40 thousand? If bond not paid you have to pay it if you buy the property.

[4$ALE]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

:)Residential Bond Assessment Information (https://www.districtgov.org/departments/finance/bond_info.aspx) - for Bond Amortization Schedules. The District web site is full of information too. -https://www.districtgov.org/

Bonds are different for different houses and in different Districts. Everyone pays $125 for Fire in Sumter Co.

Look up resales on the County Web Sites:
Welcome to The Property Appraiser's Office for Lake County, Florida (https://www.lakecopropappr.com/)
Home - Sumter County Property Appraiser (https://www.sumterpa.com/)
MCPA Home (https://www.pa.marion.fl.us/)

:ho:

[Altavia]

Check the comp's for comparable homes with and without bonds.

When we bought, there was no difference in purchase price.

[margaretmattson]

Check the comp's for comparable homes with and without bonds.

When we bought, there was no difference in purchase price.From what I heard, the bonds on the newer homes are reaching $50,000. But, that doesn't mean EVERY new home has that amount of bond. The bond payments are NOT included in the purchase price. The payments are amortized over 30 yrs and you pay interest.

Instead of just using a villages rep, get in contact with an MLS realtor. They work for agencies outside of the Villages. They sell preowned homes not listed with the Villages. You should work with BOTH agents. If you can't get answers from the Villages rep, the MLS rep will fill you in.

Bond payments are added to your tax bill annually. Ask what your taxes, including the bond payment, will be before purchasing. Each county has different tax rates. With a bond, your tax bill can be 7- 10 thousand dollars per year.
Good Luck!

[retiredguy123]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.
Note that you don't have to work with an "assigned" agent. You can fire the agent and select whatever agent you want to work with. Do a little research and find an experienced agent who you like and ask them to show you some houses.

Chris Hallmark is one of the most experienced and best agents who works for The Villages. If you call him, I am sure that he will show you any of The Villages houses and answer any questions you have.

[jebartle]

No bond in Lady lake

[Bill14564]

It may not be possible to give an overall average savings. There are too many different bond amounts and too many homes to calculate it. Still, your person could do a better job of answering your question.

For just a general ballpark use an annual payment of $1,800 with 15 years left for a total amount of $27,000.

NOTE: the amount will be less in the north and far more in the south.

It is easy to determine an exact amount for any home:

- Use the address of the home to find the most recent tax bill
- Look for the bond line in the lower section. If it is not $0 then you can challenge the statement that it has been paid off
- The tax bill will show the Section number for the home
- Use the Section number to find the bond amortization schedule on districtgov.org
- If the bond is not paid off then you have the choice of paying the current balance or the remaining annual payments. THAT is the savings on a home with the bond already paid.

[frayedends]

I think our maintenance fee is about 700/year. So you pay that regardless of bond being paid off.

My guess is the value of the house will be related to bond paid or not. So a re-sale probably adjusts price up if bond is paid. Most likely it's a wash, but at least one less thing to deal with if it's paid.

[JRcorvette]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

Buying a home where the bond is paid of is a big savings. The average interest on a Bond is around 6% and probably higher on new homes. That can be more than $1600 -$2000 a year on your tax bill.

[frayedends]

Buying a home where the bond is paid of is a big savings. The average interest on a Bond is around 6% and probably higher on new homes. That can be more than $1600 -$2000 a year on your tax bill.

That's true so if the buyer is paying cash it's definitely a benefit to have it paid. But if they pay cash and pay off the bond too I still think it's a wash. If you have 2 models exact same model and lot in the same location and one is 400K with no bond and the other has a 25K bond they probably will be listing for 375K.

That's really just my opinion but I'm sure people take into account bond value when setting a list price.

[Brwne]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

From what I've seen over the last 4 years, the market value of a preowned home does not seem to increase by the bond payoff amount. "No Bond" seems to be a tie-breaker, when evaluating a home purchase. It does, however, save real $$ annually. If a home buyer plans to stay in their house "forever", then paying off the bond makes sense. However, I've heard that the average buyer in The Villages buys/moves to a new home 3 times (validity unknown). My wife, however, informs me that we are "one and done"!

You can change Villages agents any time you choose. Andrew Mitchell (352-615-7485) has handled 24 buy and/or sell transactions for my friends and family - I highly recommend him.

[melpetezrinski]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

"Simple question What is the average real-world saving"
Simple answer - $30,000

[Marathon Man]

You question is simple, but the answer is not. Bond amounts vary because the age of homes vary. I'm not sure an average answer is the best thing to have. It would be better to look at each house that you are interested in individually.

Now, should it be a priority? It was not for us. We bought the house we wanted in the area that we wanted to live. If we paid a little more, so be it. For us it is worth it.

[petsetc]

I think of the bond as an assumable second mortgage that is attached to the house and is not included in the sale price. So as I see it, the actual price of the house is the sales price PLUS the remaining bond balance. Or to put it another way, you must pay the sales price in full PLUS the remaining bond balance in full to claim your house is free and clear.

I do not believe you can recoup the bond pay-off in a resale unless the bond is at the end of its term. I have chosen to think of it as "just one more thing" not to think about except at tax time.

In my limited ownership of 8 years, I do not remember anyone fretting about the bond, one way or the other.

JMHO

[Challenger]

In fact, there was a difference in price. If comparable houses with and without bonds were sold at the same price, the actual consideration for the "Bond" house was higher by the amount of the bond.

A statement that the price is the same is a sales agency subterfuge. A house with a bond in essence has a lien superior to a mortgage and is a preferential claim on your equity.

Pose the question to a CPA, a Certified RE Appraiser, and then to a RE sales agent.

[Chi-Town]

When buying my house one of the features was no bond. I thought" that's nice" but it made no difference in my negotiations as I didn't know about bonds here.

[BrianL99]

I think of the bond as an assumable second mortgage that is attached to the house and is not included in the sale price. So as I see it, the actual price of the house is the sales price PLUS the remaining bond balance. Or to put it another way, you must pay the sales price in full PLUS the remaining bond balance in full to claim your house is free and clear.

I do not believe you can recoup the bond pay-off in a resale unless the bond is at the end of its term. I have chosen to think of it as "just one more thing" not to think about except at tax time.

In my limited ownership of 8 years, I do not remember anyone fretting about the bond, one way or the other.

JMHO


That's exactly what it is. Essentially, an assumable 2nd Mortgage (that's in a 1st position, like taxes). It's good to see someone post a clear, concise and accurate answer to the OP's question.

[villagetinker]

Also, as far as I know, the bond payments and interest are NOT deductible on income taxes. A few years ago, the bond interest rate was higher than our income interest rate, we made the decision to pay off the bond, today it would be the opposite. My point there are several things to consider. IMHO, figure out your planned monthly budget, and see if the additional bond expense is a deal breaker.

[BrianL99]

Also, as far as I know, the bond payments and interest are NOT deductible on income taxes. .

That is correct from what my CPA told me.

Many people simply deduct them, because it appears as "Taxes" on the payment to the County and unless there's an Audit, the IRS may not catch it. Not that anyone in TV would cheat on their taxes.

I assume (but don't know), that they can be capitalized as part of the home's purchase price? Surely they can be, on Investment property.

Are CDD Fees Tax Deductible? A New Homeowner's Guide (https://www.teachmepersonalfinance.com/are-cdd-fees-tax-deductible/)

Are CDD Fees Tax-Deductible? (https://forst.tax/tax-guides/are-cdd-fees-tax-deductible/)

[kkingston57]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

Forget about the bond price and look at the bottom line. New house + Bond = Full Cost of house. No bond house is the full contracted price of house.

[charlieo1126@gmail.com]

I’ve sold 5 homes here in villages I did not pay the bond off on any of them .there are people who will try to offer you the price for the home after they deduct the bond those bids are quickly shot down . I’m not sure but I think the longest it took to sell one of my homes was about a month . it’s nice if you find a house with no bond but.I don’t think it’ll be much difference in price from one with the bond ,

[pauld315]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

Bonds are meant to hide the true cost of a house from appraisers. Most likely, if the cost of infrastructure was rolled into the price for a home, no bank would be able to justify giving you a mortgage. But, when you go for a loan and 40 or 50K is in another bill, your house will appraise correctly for a mortgage

[retiredguy123]

That's exactly what it is. Essentially, an assumable 2nd Mortgage (that's in a 1st position, like taxes). It's good to see someone post a clear, concise and accurate answer to the OP's question.
The difference between a mortgage and a bond is that a mortgage is a personal debt against the property owner. But, a bond is a debt against the property itself, not the owner. So, the owner can be sued for non-payment of a mortgage, but they cannot be sued for non-payment of the bond.

Also, I don't think an appraiser or a bank considers the bond when calculating the collateral or loan value of the property.

[tophcfa]

It’s not rocket science. Add the principal amount of the bond to the price of the house. It’s money the homebuyer is obligated to pay, unless they sell the home and pass on the remaining unpaid obligation to the next buyer. If two identical homes are priced the same but only one has a bond, it’s a no brainer, the one without the bond is a better value.

[retiredguy123]

It’s not rocket science. Add the principal amount of the bond to the price of the house. It’s money the homebuyer is obligated to pay, unless they sell the home and pass on the remaining unpaid obligation to the next buyer. If two identical homes are priced the same but only one has a bond, it’s a no brainer, the one without the bond is a better value.
True, but, in most cases, the buyer is not willing to pay the bond principal.

[GoRedSox!]

I think most folks no longer itemize deductions after the Tax Cuts and Jobs Act of 2017, and if they do, State and Local Taxes (SALT) has a $10,000 cap on the deduction. That being said, most of the provisions in that tax cut were temporary. It was passed under Reconciliation in the Senate which avoided the filibuster, and because the law added to the national debt, the provisions were made temporary and most are set to expire after 2025. It will be interesting to see if Congress acts to extend them or if they will revert to the pre-2017 tax code. If it does, the standard deduction will go back down and many more folks may go back to itemizing and the deductibility of the bond may be more of an issue. It may not be mortgage interest, but is it a tax?

We chose not to pay off our bond because the interest rate on the bond is lower than the current interest rates for savings. That equation could change going forward and we will keep our eye on that. The bonds in the new sections in the South are more expensive not only because the bonds are higher, but so is the interest rate. A bond of $40,000 with an interest rate of 5.47% carries an annual payment of a little over $2,900.

[Topspinmo]

That is correct from what my CPA told me.

Many people simply deduct them, because it appears as "Taxes" on the payment to the County and unless there's an Audit, the IRS may not catch it. Not that anyone in TV would cheat on their taxes.

I assume (but don't know), that they can be capitalized as part of the home's purchase price? Surely they can be, on Investment property.

Are CDD Fees Tax Deductible? A New Homeowner's Guide (https://www.teachmepersonalfinance.com/are-cdd-fees-tax-deductible/)

Are CDD Fees Tax-Deductible? (https://forst.tax/tax-guides/are-cdd-fees-tax-deductible/)


IMO Everybody tries cheats on taxes why they have so many exemptions. Why federal will never go to flat tax? Lawyers make rules so lawyers can get paid long with down steam associations like IRS, CPRs, tax negotiators services, and tax prepare services. IMO flat tax ONLY fair way, no deductions you make this you pay this, I don’t care have many kids you have, how many charities, or foundations you have. But, that will never happen cause
rich will never pay their share. Yes I can have opinion.

[retiredguy123]

I think most folks no longer itemize deductions after the Tax Cuts and Jobs Act of 2017, and if they do, State and Local Taxes (SALT) has a $10,000 cap on the deduction. That being said, most of the provisions in that tax cut were temporary. It was passed under Reconciliation in the Senate which avoided the filibuster, and because the law added to the national debt, the provisions were made temporary and most are set to expire after 2025. It will be interesting to see if Congress acts to extend them or if they will revert to the pre-2017 tax code. If it does, the standard deduction will go back down and many more folks may go back to itemizing and the deductibility of the bond may be more of an issue. It may not be mortgage interest, but is it a tax?

We chose not to pay off our bond because the interest rate on the bond is lower than the current interest rates for savings. That equation could change going forward and we will keep our eye on that. The bonds in the new sections in the South are more expensive not only because the bonds are higher, but so is the interest rate. A bond of $40,000 with an interest rate of 5.47% carries an annual payment of a little over $2,900.
The bond is not a tax. The interest on the bond is not tax deductible because, unlike a mortgage, the bond amount is not based on the value of the house. The bond interest is listed in the non-ad valorem section of the tax bill because it is not a tax and it is not "based on value" which is what "ad valorem" means. You cannot deduct anything in the non-ad valorem section unless the house is rental property. Some people deduct the bond interest on their income tax return because they either don't understand that it is not deductible or because they are cheating. Actually, you can deduct anything you want on your tax return as long as the IRS doesn't catch it.

[Topspinmo]

The difference between a mortgage and a bond is that a mortgage is a personal debt against the property owner. But, a bond is a debt against the property itself, not the owner. So, the owner can be sued for non-payment of a mortgage, but they cannot be sued for non-payment of the bond.

Also, I don't think an appraiser or a bank considers the bond when calculating the collateral or loan value of the property.

Cause it separate loan.

[VApeople]

We chose not to pay off our bond because the interest rate on the bond is lower than the current interest rates for savings.

Our case was the opposite.

We bought our new house in 2016 and the interest rate on our bond was 6%, which was much higher than our interest rate on our savings. Therefore we paid off our bond.

[Babubhat]

The newer the home, the more you save. Cash in your pocket, no future principal, interest or administrative fee. Every property can be looked up on village’s amortization site.

Treat it as a reduction of the purchase price. The realtor should be highlighting this in advertising

[petsetc]

Also a thought on Non-Ad Valorem assessments.....
I do believe you could make a strong case to deduct both the Fire Assessment and the Maintenance portions.

[Djean1981]

The bond payment is included on your annual county tax bill. For our house, it's about $1,400 a year. But, it's different for each house/area. The bond payment tables are available on the district website.

[Papa_lecki]

As you can see from the replies, the decision to pay it off is a personal decision, based on your financial situation and personal comfort of carrying the obligation.

The bond set up is brilliant, 1) you pay it once a year, 2) the amount is relatively reasonable, and 3) the debt is attached to the house, not the owner. BUT
The bond is a financial obligation; it carries interest and an administrative fee.

Given 2 similar homes, a bond balance is ONE item a buyer will consider at purchase (we all know no 2 homes are identical). Every buyer has a list of 3 or 4 non negotiable in a house they want to buy. A bond may/may not be important.

[retiredguy123]

Also a thought on Non-Ad Valorem assessments.....
I do believe you could make a strong case to deduct both the Fire Assessment and the Maintenance portions.
How about my lawn service, electric bill, water bill, cable TV, cell phone, homeowner's insurance, etc?

[BrianL99]

IMO Everybody tries cheats on taxes why they have so many exemptions. Why federal will never go to flat tax? Lawyers make rules so lawyers can get paid long with down steam associations like IRS, CPRs, tax negotiators services, and tax prepare services. IMO flat tax ONLY fair way, no deductions you make this you pay this, I don’t care have many kids you have, how many charities, or foundations you have. But, that will never happen cause
rich will never pay their share. Yes I can have opinion.


& in my opinion, it's not opinion, it's merely the facts.

That crazy guy from Texas 30 years ago, had it right. A Flat Tax allows us to do away with 90% of the IRS & Collection Costs, is a much fairer system and revenue neutral.

[BrianL99]

Bonds are meant to hide the true cost of a house from appraisers.

I'm always amazed at the number of otherwise reasonably savvy folks, who own homes in TV and don't understand the genesis or implications of the CDD Bonds ... & it has nothing to do with "appraisers".

[collie1228]

If you use price per square foot as a basis for comparing prices, then you had better include the bond balance in the price if you want to compare apples with apples. It's part of the price you pay.

[petsetc]

How about my lawn service, electric bill, water bill, cable TV, cell phone, homeowner's insurance, etc?

I see the difference as...if you don't pay those bills, they will discontinue service.

I would argue the the Fire Assessment is clearly deductible since it pays for a County provided service and in most other states is just rolled into the RE taxes. Also, if you don't pay it, the County can lien and foreclose to collect.

From a Turbotax forum;
Real property taxes can be deductible, even if not ad valorem, if they provide a general community benefit and not a property-specific or "local" benefit. For example, a $50 charge per house for community ambulance service is a deductible property tax, while $50 for streetlights (that is only charged on streets with street lights) is a property-specific benefit and is not deductible.

Revised - the Maintenance fee does not fit this definition.

[Bilyclub]

No bond is costing you less money. Having a bond is an extra thousand or two a year.

[BrianL99]

From a Turbotax forum;
Real property taxes can be deductible, even if not ad valorem, if they provide a general community benefit and not a property-specific or "local" benefit. For example, a $50 charge per house for community ambulance service is a deductible property tax, while $50 for streetlights (that is only charged on streets with street lights) is a property-specific benefit and is not deductible.

IMHO, the Maintenance fee also fits this definition.

As the maintenance fee also maintains golf courses, clubhouses and pools, I doubt the IRS would agree with you. That said, I might try it next year. I'll let you know the results if I get audited.

[charlieo1126@gmail.com]

True, but, in most cases, the buyer is not willing to pay the bond principal.that is not not what happens ,like I said before, you may have someone bid subtracting the bond but you don’t accept it , most buyers who want your home will pay the price with the bond. The longest I lived in any of the 5 homes I sold in villages was about 4 years so I owed most of the bond . The last home I sold was about 2 1/2 years ago so the market has changed somewhat , I’mi in my first preowned home in villages now , the house had no bond , but it sold for the same price as comparable models ,so the sellers gained nothing by paying it off and I would have bought this home with a bond anyway

[petsetc]

As the maintenance fee also maintains golf courses, clubhouses and pools, I doubt the IRS would agree with you. That said, I might try it next year. I'll let you know the results if I get audited.

I agree, not the maintenance fee but definitely the fire tax. I'm going to remove that part of my post.

On a lighter note, I know several people who just pick the whole bill as a deduction aand I suspect the aggregate numbers will still be outside the IRS thresholds.:icon_wink:

[Altavia]

If you or you heirs decide to rent the house a later date, do you lose the opportunity to deduct that expense if you pay it off?

Or can you depreciate the bond cost for a rental property?

[retiredguy123]

that is not not what happens ,like I said before, you may have someone bid subtracting the bond but you don’t accept it , most buyers who want your home will pay the price with the bond. The longest I lived in any of the 5 homes I sold in villages was about 4 years so I owed most of the bond . The last home I sold was about 2 1/2 years ago so the market has changed somewhat , I’mi in my first preowned home in villages now , the house had no bond , but it sold for the same price as comparable models ,so the sellers gained nothing by paying it off and I would have bought this home with a bond anyway
I guess it depends on the market. You may not accept an offer with a deducted bond, but other sellers will. Having a bond gives the buyer more options. If they don't want a bond, they can just pay it off. If they want a bond, they can keep it. But, once the bond is paid off, it cannot be reinstated. In some cases, a paid off bond can prevent a sale because the buyer cannot get a mortgage high enough to cover the paid off bond amount that the seller has included in the sale price.

[retiredguy123]

I agree, not the maintenance fee but definitely the fire tax. I'm going to remove that part of my post.

On a lighter note, I know several people who just pick the whole bill as a deduction aand I suspect the aggregate numbers will still be outside the IRS thresholds.:icon_wink:
Interesting. The IRS differentiates a tax from a fee. For example, some states charge a car tax, based on the value of your car. I believe this is a tax deductible expense. But other states charge an annual registration fee to register your car. The IRS calls this a fee, not a tax, and it is not deductible. But, both charges are basically used for the same purpose. I think they would call the fire department charges a fee, not a tax.

[BrianL99]

On a lighter note, I know several people who just pick the whole bill as a deduction aand I suspect the aggregate numbers will still be outside the IRS thresholds.:icon_wink:

I can assure you, that's the case. Had I thought of it, I would have been right on it! I just emailed my tax accountant to remind her for next year :a20:

[retiredguy123]

I can assure you, that's the case. Had I thought of it, I would have been right on it! I just emailed my tax accountant to remind her for next year :a20:
As I said before, you can deduct anything you want as long as the IRS doesn't audit you. Good luck.

[Topspinmo]

I guess it depends on the market. You may not accept an offer with a deducted bond, but other sellers will. Having a bond gives the buyer more options. If they don't want a bond, they can just pay it off. If they want a bond, they can keep it. But, once the bond is paid off, it cannot be reinstated. In some cases, a paid off bond can prevent a sale because the buyer cannot get a mortgage high enough to cover the paid off bond amount that the seller has included in the sale price.


Isn’t all homes in villages over stated? All things being the same including price who buy one with bond? One who likes to give money away. :p

[Topspinmo]

As the maintenance fee also maintains golf courses, clubhouses and pools, I doubt the IRS would agree with you. That said, I might try it next year. I'll let you know the results if I get audited.

And by time you get audited you will own thousands in penalties.

[BrianL99]

As the maintenance fee also maintains golf courses, clubhouses and pools, I doubt the IRS would agree with you. That said, I might try it next year. I'll let you know the results if I get audited.

And by time you get audited you will own thousands in penalties.

The general IRS penalty for inaccuracy (claiming a deduction that's disallowed), is 20% of the portion of the under-payment. If someone was to inaccurately deduct all or a portion of their Maintenance/Amenity Fee, at a 22% Tax Rate, the Penalty would be around $100 (although there may be a "minimum penalty of $435?).

$225/month = $2700. $2700 * 22% = $594. $594 * 20% = $118.

Not giving tax advice, only math assistance.

[Bill14564]

The general IRS penalty for inaccuracy (claiming a deduction that's disallowed), is 20% of the portion of the under-payment. If someone was to inaccurately deduct all or a portion of their Maintenance/Amenity Fee, at a 22% Tax Rate, the Penalty would be around $100 (although there may be a "minimum penalty of $435?).

$225/month = $2700. $2700 * 22% = $594. $594 * 20% = $118.

Not giving tax advice, only math assistance.

The annual maintenance fee is not the same as the monthly amenity fee. Different amounts and used for different purposes.

[BrianL99]

The annual maintenance fee is not the same as the monthly amenity fee. Different amounts and used for different purposes.

Apples & Oranges. The IRS has already said that CDD Bond Payments are not deductible.

If there's been an IRS decision if some portion of the monthly fee is deductible, I don't have a clue. I was only speaking of that fee ... which I suspect has no chance of being a legitimate deduction.

[Bill14564]

Apples & Oranges. The IRS has already said that CDD Bond Payments are not deductible.

If there's been an IRS decision if some portion of the monthly fee is deductible, I don't have a clue. I was only speaking of that fee ... which I suspect has no chance of being a legitimate deduction.

Yes, apples and oranges and kumquats. You mentioned the maintenance/amenity fee but those are two different things. The annual maintenance fee and the bond are also two different things.

Monthly: amenity fee
Yearly: maintenance fee
One time: bond (though that is amortized over 30 years)

[CoachKandSportsguy]

Executive summary:
As a buyer of a property in the Villages:
your financial situation, cash or mortgage,
your urgency to move to the Villages,
the particular properties and the sale prices while you are looking,
the bond status and
your negotiation skills
will all factor into your decision of which house to buy.

I guess it depends on the market. You may not accept an offer with a deducted bond, but other sellers will. Having a bond gives the buyer more options. If they don't want a bond, they can just pay it off. If they want a bond, they can keep it. But, once the bond is paid off, it cannot be reinstated.

Correct! as always.

In some cases, a paid off bond can prevent a sale because the buyer cannot get a mortgage high enough to cover the paid off bond amount that the seller has included in the sale price.

Because the bond is not part of the appraised value of the home by the bank, and the bank will own the house, not you. You are renting the property from the bank, or renting the money, which ever way you want to look at the rental. The market price is determined by the buyer and seller accepting an assumed fair price for the property, whether or not it is fair is the judgement of the observer.

Two same size models on the same street, with the same acreage,
Both houses will be appraised for about the same price by the bank.

House A has no bond and the price is set at $500,000
House B has the bond payment and the price is set at $500,000

For the buyer, house A is the cheaper house
For the seller, house B is the better return on cash / capital spent.

House C has no bond and the price is set at $530,000, including recouping the bond
House D has the bond payment and the price is set at $500,000, with a $30,000 bond remaining.

House C appears to be more expensive, and would most likely be the second choice,
House C would not appraise well for the mortgage, but House C may get an all cash sale offer,
(no mortgage) or House C may get a negotiated reduction, may be equal to or better than the house D.

part of the final agreed price are factors hidden/unknown by the final sales price:
the time frame the seller has to sell the house, willingness to take a discount
the buyer's interest in that particular house, based upon intangibles of the location, view, tree, color, and the direction of the market prices in the recent past, as a real estate buy is an emotional based transaction.

But if you read all the comments, many to most people will not consider the bond balance nor payment in the agreed upon sale price of the house, because they want the house for whatever reason. And House C seller may turn down everything but the full sale price.

So as a buyer of a property in the Villages, your financial situation, your urgency to move to the Villages, the particular property and the sale price, the bond status and your negotiation skills will all factor into your decision.

so there really is no one correct answer. .

good luck!

retired finance guy

[BrianL99]

Yes, apples and oranges and kumquats. You mentioned the maintenance/amenity fee but those are two different things. The annual maintenance fee and the bond are also two different things.

Monthly: amenity fee
Yearly: maintenance fee
One time: bond (though that is amortized over 30 years)

You're correct and your wording is much more precise than what I used. In which case, the questions (regarding the deductibility for tax purposes), are:

The Bond Payment (& associated interest) is clearly not deductible. Common sense would suggest that's it's simply a capital cost when buying your home. In a more traditional arrangement (non CDD), the Developer would have paid for the infrastructure and that cost would be reflected in the price of the house. In the case of TV, the cost of the home is separated into (2) parts ... the home itself and the infrastructure. No reason it should be deductible.

Maintenance costs for the CDD, which under a more typical scenario (again, non-CDD community), that amount would generally be included in the Ad Valorem tax bill? Which would make it Tax Deductible.

The Amenity Fee is a horse of a different color. Things like maintaining "walking paths", dog parks, etc., would normally be carried in a town's budget, included in taxes and be deductible. I'm guessing (& admittedly, I don't have a clue) in TV, they're carried in the Amenity Fee and not in the Maintenance Fee? It seems they should be deductible for CDD residents, as they would be for residents of a traditional government authority. I can understand why the portion of the Amenity Fee that provides for maintenance of the clubhouses & Executive Golf courses may not be deductible, although that's a rather fine distinction. If a town has a "community house with a swimming pool" and included the expense in it's general budget, it would become part of one's annual tax bill and be deductible.

[Normal]

Watch out for city taxes south of 44, especially in new construction areas too. Some can run almost as much as a bond payment annually. New construction areas were snagged up by Leesburg and Wildwood so they could fatten their pockets for pet projects that have nothing to do with the Villages. A huge swath of the Villages north of 44 don’t pay a dime because they are unincorporated.

Hint, you keep paying these for life, even if your bond was paid off tomorrow.

The bond is a sweet deal for the developer, they don’t pay impact fees which average 25,000 per lot throughout the state of Florida. Instead your bond amount is double what most are.

[JoeM1]

The short honest answer is avoid a bond. There are PLENTY of great homes in the villages with no or little bond remaining. If you insist on a new build, then you’ll get a bond. No one likes stroking a check for something they can’t “touch” or an effusive indirect service.

[Normal]

This house just sold a couple days ago and no realtors were involved.

4160 Deskin Ln, The Villages, FL 32163 - MLS G5075727 - Coldwell Banker (https://www.coldwellbankerhomes.com/fl/the-villages/4160-deskin-ln/pid_56631203/)

Bond was paid off. Check all avenues, You save 10s of thousands if sales commissions aren’t involved. The prices are often inflated by sellers who have to pay for sales agents. Check Zillow, Redfin etc. There are some real bargains. Home prices have been dropping.

[villageuser]

In my limited ownership of 8 years, I do not remember anyone fretting about the bond, one way or the other.

JMHO
Regarding your last statement, as a REALTOR®, most of my customers looking at resale in the Villages request houses that do not have bonds, or very little bond attached (less than $10,000 is usually the number). Homes without bonds are usually a little older, but for those that are looking for little or no bond, that is a trade-off that they’re comfortable with.

[Franee621]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

A house without a bond is much cheaper. Say a $400,000 home without a bond is $400,000 a house with a say $40,000 bond is $440,000. Even though you don’t have to pay it off and if you sell your house it goes with the house. However there is interest you are paying on the bond. Two exact houses to buy. One has a $40,000 bond one doesn’t. Which would you buy?

[PersonOfInterest]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.


Your question makes it obvious that you do not fully understand the concept of the Bond. The answer to your question would be found in Comparing the Tax Bills of a house with "NO BOND" and a comparable house that currently has a Bond payment which is included on The Property Tax Bill (Yearly).

Secondly, Get another Real Estate Agent and make sure he can explain the Bond situation.

[jerseyclone]

When I looked into the bond a few years ago the interest was 7% plus an annual service fee. Paid it off asap. The bond is another way for the Villages to make money. Cheap houses and high bonds.

[Laker14]

when I was house hunting, I looked at the existing bond as part of the price.
House A: asking price: 350K, Bond 10K, total cost to buy= 360K

House B: Asking price: 350, Bond-0K, total cost to buy= 350.

My agent told me not to consider the price of the bond. Said it didn't matter. I asked him if he would like to pay it for me then since "it doesn't matter"...he declined to do so, which made me think "maybe it matters"...

[sdeikenberry]

I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

Can anybody please answer this question honestly? My assigned realtor can't or won't.[/QUOTE]

Several good answers already...but...IMHO homes with bonds paid off are a better investment for several reasons. (1) You don't owe more on your annual taxes. (2) Those homes are generally a little older and previous owners made sometimes significant improvements that you obtain for less that the cost of the improvement. (3) The landscaping is probably better in a home and in the area with the bond paid because it is more mature. (4) Generally, homes with paid bonds will have better shopping closer because those homes are in a more mature area, generally. (5) If you are a golfer, you'll appreciate the proximity of more courses around homes that have bonds paid because they are likely north of 466a.
This all adds up to value that sometimes can't have a dollar value but still is valuable to some buyers.

[Altavia]

Regarding your last statement, as a REALTOR®, most of my customers looking at resale in the Villages request houses that do not have bonds, or very little bond attached (less than $10,000 is usually the number). Homes without bonds are usually a little older, but for those that are looking for little or no bond, that is a trade-off that they’re comfortable with.

Needing a roof replaced to get insurance and higher insurance costs due to a an older home not meeting wind current mitigation standards can more than eat up bond cost. And this will not get better over time.

[john352]

From what I heard, the bonds on the newer homes are reaching $50,000. But, that doesn't mean EVERY new home has that amount of bond. The bond payments are NOT included in the purchase price. The payments are amortized over 30 yrs and you pay interest.

Instead of just using a villages rep, get in contact with an MLS realtor. They work for agencies outside of the Villages. They sell preowned homes not listed with the Villages. You should work with BOTH agents. If you can't get answers from the Villages rep, the MLS rep will fill you in.

Bond payments are added to your tax bill annually. Ask what your taxes, including the bond payment, will be before purchasing. Each county has different tax rates. With a bond, your tax bill can be 7- 10 thousand dollars per year.
Good Luck!
I purchased a new home in The Villages in 2004. My plan for financing included a mortgage on the new home. I asked The Villages salesperson what the interest rate on the bond. The bond interest rate was significantly higher than the interest rate on the new mortgage. Therefore, I increased the principal on the home mortgage by the bond principal amount and paid off the bond at closing.

[PjLyness1965]

A house without a bond is much cheaper. Say a $400,000 home without a bond is $400,000 a house with a say $40,000 bond is $440,000. Even though you don’t have to pay it off and if you sell your house it goes with the house. However there is interest you are paying on the bond. Two exact houses to buy. One has a $40,000 bond one doesn’t. Which would you buy?

This is incorrect. It’s actually the opposite. A house with a paid off bond, or no bond for the future buyer, is going to be more expensive because the seller will try to recoup the bond payments. A house with an existing bond is not going to be more expensive because the bond hasn’t been paid off. The only savings a future buyer will see on a house with a paid bond is when they pay their annual taxes because they won’t have an annual bond payment.

[GizmoWhiskers]

I think of the bond as an assumable second mortgage that is attached to the house and is not included in the sale price. So as I see it, the actual price of the house is the sales price PLUS the remaining bond balance. Or to put it another way, you must pay the sales price in full PLUS the remaining bond balance in full to claim your house is free and clear.

I do not believe you can recoup the bond pay-off in a resale unless the bond is at the end of its term. I have chosen to think of it as "just one more thing" not to think about except at tax time.

In my limited ownership of 8 years, I do not remember anyone fretting about the bond, one way or the other.

JMHO
Right. To bond or not to bond is the choice of the buyer in picking a house. If money is no object the buyer doesn't have to blink twice. If every dollar counts each year at tax season, don't buy a house with a bond. It takes about 12 years to have your yearly payment (added to your tax bill) actually go toward principle payment instead of the majority of bond payment going toward interest.

To bond or not to bond is poportionate to your fixed or non-fixed income and a paid off bond can be a benefit. I don't see where it does a lot for sales price in my experience in selling a home in T V.

Where you don't have a bond anymore, the age of a house can mean other costs in bringing a pre-owned home up to date ie: new floors, kitchen, bathrooms, etc. So then it's a wash. However, updates lower the price over all in negotiating price.

Lots to consider so lol circle back it comes back to how much do you want added to your tax bill each year for 30 yrs w interest?

[Wilson02852]

Wrong

It depends on the age of the house. If house is say 15 years old, using your methodology, a $30k bond would only be $15k.

How many plan on living in TV for 30 years? Even if you do and pay it off the true savings is just interest. Most buyers will not pay a premium for paid bond. Like someone said earlier it's only a tie breaker. Style and location mean so much more.

[crash]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

The bond is about $1000 per year but people who paid it off are probably upping the price by the total of the bond that they paid. In Brownwood area that was around $29,000 sorry of 44 much more. Look at a similar home to see how much they are increasing the cost to recover their bond. In reality the house should be the same cost but sell a little faster if the bond is paid.

[TheWarriors]

As more bonds are paid off in the Villages, buyers are likely to become much more savvy in understanding the true cost of a home. Either way you pay and anyone that doesn’t understand that isn’t financially aware.

[PVR]

Check the comp's for comparable homes with and without bonds.

When we bought, there was no difference in purchase price.

The purchase price can be the same but 1 house may still have a bond to pay so the bond is. An additional charge on that house that carries over to the new owners.
Bond paid means no additional charge.
So on a $300,000 house purchase with a $25,000 bond is actually 335,000. The one without the bond is just $300,000.
The bond have be paid upfront though. It can be paid yearly with your taxes

[MCJEFE]

Ditch that agent if they're not answering your questions.

Robbie Audette is one of the best to work with. Give him a call.
352 360-5535

[Desiderata]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

As you can see by all of the replies, there is no simple answer to your question. I suspect that your agent is trying to explain this to you.
I suggest looking at all home that meet your criteria, regardless if there is a bond, then base your offer on what you are comfortable paying for it. Tax records will show the bond balance and how much it costs each year.

[EddieUA]

A bond is a lien against the house imposed by land improvements. In the Enclave the bonds are $72,000 @ 5.47% with principle and interest payments between $5,000 and $6000. With Lake county taxes you would be looking at $15,000 taxes verses $6,000 in taxes for a similar house north of 466 for a premier home. Location location location....

[Laker14]

I’ve sold 5 homes here in villages I did not pay the bond off on any of them .there are people who will try to offer you the price for the home after they deduct the bond those bids are quickly shot down . I’m not sure but I think the longest it took to sell one of my homes was about a month . it’s nice if you find a house with no bond but.I don’t think it’ll be much difference in price from one with the bond ,

From a seller's perspective, the seller has set a target for how many dollars they want or expect to realize from the sale of their home. In that case the presence or absence of a bond is immaterial.
From a buyer's perspective, the presence or absence of a bond just becomes one of the many pros or cons one considers when deciding if the home meets their criteria for purchase.
Very much like the counter tops, or the carpeting, or any other feature. If the house has counter tops that I know I will be changing, then I have to do the math and decide at what price I'd buy this house. The seller may or may not agree to lower the price because I don't like the counter tops. It all depends on how eager the seller is to sell, and how the seller evaluates the other chances of selling at a better price.
All of those logical steps we take when evaluating a potential home to buy apply to the existence, or lack thereof, of a bond.

[Larchap49]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

If it's new construction the only way it is no bond is if it's in the section where Village employees buy. The disadvantage to that is you do not have use of the amenities. From what I hear the bonds on pre construction lots now run from 40,000 to over 100,000 and are paid over a 30 year period with interest.

[LucyP]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

No Bond means it’s Been paid off you don’t have to fork out extra $20k 30k …or whatever the Bond is on the property you are looking at.

[Sandy and Ed]

Bond is attached to property. You, or subsequent owners, pay the bond off monthly IN ADDITION to whatever mortgage you may have along with other monthly costs. BOND FREE or BOND PAID means you don’t pay that.

If you are buying a property of course look for those that have the bond already paid ( or prepaid by previous owner).

Do sellers of properties where they prepaid the bond ask for more? Probably. But when the property is listed it is shown along side those listed for less that do not have bonds paid.

As a buyer which one would catch your attention? As a realtor agent what part of the REAL cost would you downplay?

Obvious for me. Buy BOND PAID for lowest asking price in newer areas for the model you want. I would look for turnkey with zero carpeting and a fresh coat of paint as well.

[Wondering]

You must be talking about resale homes. If the original buyer (new construction) paid the bond, they could tell you what was paid and your savings. My first house, 2005 had a bond of $11,000. My second house 2009, had a bond of $16,000. I have heard new construction bonds could be $25,00 to $35,000.

[Normal]

Homes south of 44 have bonds (between 10-20 percent do not). The trade off is, do you want an older roof, less efficient AC, poor efficiency windows, popcorn ceilings, old appliances, dated sliding doors, old carpet, and many holes in your drywall?

Ask yourself what you want for your retirement home.

[Dusty_Star]

A house without a bond is much cheaper. Say a $400,000 home without a bond is $400,000 a house with a say $40,000 bond is $440,000. Even though you don’t have to pay it off and if you sell your house it goes with the house. However there is interest you are paying on the bond. Two exact houses to buy. One has a $40,000 bond one doesn’t. Which would you buy?

If money is the ONLY concern, then the one without the bond. Since money is usually one of the considerations, then the house I would buy would be the one I preferred. Usually, it is difficult to fine EXACT houses, presuming the age, model & condition are the same then: Perhaps the location, whether there is a neighboring lanai right behind the house, the orientation of the house, view, interior finishes, & so on. There are many considerations when buying a house.

[Bay Kid]

A bond is bad debt. You cannot write off the interest.

[polaris]

If it's new construction the only way it is no bond is if it's in the section where Village employees buy. The disadvantage to that is you do not have use of the amenities. From what I hear the bonds on pre construction lots now run from 40,000 to over 100,000 and are paid over a 30 year period with interest.

There are bonds attached to the properties in Middleton which is the new family section that is open to anyone - not just employees. You are right though that they will not have access to “our” amenities.

[Dusty_Star]

Even if you do and pay it off the true savings is just interest.

The savings is the interest & the administrative fee.

[Birdrm]

That is not really true that the bonds are less in the north and more in the south. I bought a new courtyard villa in Hammock at Fenney and the bond was only 17k. If you are referring to the new construction on the other side of the turnpike in Lake County then yes the bonds there are much higher!

[BlueStarAirlines]

That is correct from what my CPA told me.

Many people simply deduct them, because it appears as "Taxes" on the payment to the County and unless there's an Audit, the IRS may not catch it. Not that anyone in TV would cheat on their taxes.



For many folks that have a mortgage, the taxes are reported on IRS form 1098. Whatever is in that box is what goes in the 1040. Since escrow is collected and paid by the mortgage company, folks just go off of the documentation provided.

I agree that for folks with no mortgage its on them to ensure the correct amount of taxes is reported....

[BlueStarAirlines]

This house just sold a couple days ago and no realtors were involved.

4160 Deskin Ln, The Villages, FL 32163 - MLS G5075727 - Coldwell Banker (https://www.coldwellbankerhomes.com/fl/the-villages/4160-deskin-ln/pid_56631203/)

Bond was paid off. Check all avenues, You save 10s of thousands if sales commissions aren’t involved. The prices are often inflated by sellers who have to pay for sales agents. Check Zillow, Redfin etc. There are some real bargains. Home prices have been dropping.

Not sure how you can say home prices are dropping. For the home you cited, it was sold in 2018 for $473k and was listed in 2023 for $679k. Where is the price drop?

[splashes]

Call Beth Pope Realtor 352-552-1511 Excellent and can and will answer all of your questions

[nn0wheremann]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.
Look up the tax bill on any property you are interested in, and if there is a bond payment required it will be displayed there.
The bonds were amortized over different periods so to get the total remaining bond obligation look up the amortization on the district government website. A fie year old house with a 30 year bond would have twenty five years left.

The further north you go, generally speaking, the lower the bond and the shorter the amortization. Bonds in Marion County, CDD4, where propert lines include the streets, were most likely in the $5000 to $10000 range, and many are paid off already.

[JMintzer]

Not sure how you can say home prices are dropping. For the home you cited, it was sold in 2018 for $473k and was listed in 2023 for $679k. Where is the price drop?

That house would have easily sold for $100-$125K more a year ago...

[Pat2015]

I’ve sold 5 homes here in villages I did not pay the bond off on any of them .there are people who will try to offer you the price for the home after they deduct the bond those bids are quickly shot down . I’m not sure but I think the longest it took to sell one of my homes was about a month . it’s nice if you find a house with no bond but.I don’t think it’ll be much difference in price from one with the bond ,
I’ve bought 5, and sold 4 houses in TV and I’ve never paid off the bond. Paying off the bond does not increase the appraised value of the house. All things being equal if there were 2 houses that I had interest in I might opt for the one with no bond, but there’s not many of them out there unless you want to be far north, and I prefer the Brownwood area.

[retiredguy123]

Call Beth Pope Realtor 352-552-1511 Excellent and can and will answer all of your questions
She is a licensed real estate agent, but not a Realtor.

[Pat2015]

A bond is a lien against the house imposed by land improvements. In the Enclave the bonds are $72,000 @ 5.47% with principle and interest payments between $5,000 and $6000. With Lake county taxes you would be looking at $15,000 taxes verses $6,000 in taxes for a similar house north of 466 for a premier home. Location location location....
That’s a lot for sure, but it’s a new house in a supposed premier area. Also, a lot of new and younger people moving to TV don’t want to live in an older house north of 466 which is why new homes sell faster than preowned, and more new homes than preowned homes were sold in TV in the past 2 quarters.

[Jhrath7@gmail.com]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.
Our bond was $18,000 but understand some are over $50,000

[retiredguy123]

That’s a lot for sure, but it’s a new house in a supposed premier area. Also, a lot of new and younger people moving to TV don’t want to live in an older house north of 466 which is why new homes sell faster than preowned, and more new homes than preowned homes were sold in TV in the past 2 quarters.
In my opinion, new houses are a better deal than pre-owned houses, bond or no bond.

[Normal]

Not sure how you can say home prices are dropping. For the home you cited, it was sold in 2018 for $473k and was listed in 2023 for $679k. Where is the price drop?

Annually the prices have decreased. Of course the Villages has also decreased many of their new construction prices and Redfin has stated prices are down 10.23 percent off of last year. The area in the southern villages is looking at 255 dollars a square foot. 32163 Housing Market: House Prices & Trends | Redfin (https://www.redfin.com/zipcode/32163/housing-market)

Don’t forget the house cited is a newer 2361 square foot custom home with a3 full baths, 3 bedrooms extended lanai with kitchen, pool and the bond paid off for 670 k or 280 a square.

4160 Deskin Ln, The Villages, FL 32163 - MLS G5075727 - Coldwell Banker (https://www.coldwellbankerhomes.com/fl/the-villages/4160-deskin-ln/pid_56631203/)

People should be shooting for 250 a square foot if the house has quartz countertops and standard upgrades in the newer areas. 220-225 for Formica and the basics in models

[BlueStarAirlines]

That house would have easily sold for $100-$125K more a year ago...

Totally agree, but the OP "gave proof" of a price drop where there was no proof. Maybe I'm nitpicking, but instead of saying price drop I would have said slowed appreciation. Now, if the closing price is less than the listed price that would be a price drop....

[LonnyP]

Just an average Joe here but if you do not get an answer that satisfies you, send me a private message and I will give you my number. I would be happy to give you my perspective.

[tophcfa]

when I was house hunting, I looked at the existing bond as part of the price.
House A: asking price: 350K, Bond 10K, total cost to buy= 360K

House B: Asking price: 350, Bond-0K, total cost to buy= 350.

My agent told me not to consider the price of the bond. Said it didn't matter. I asked him if he would like to pay it for me then since "it doesn't matter"...he declined to do so, which made me think "maybe it matters"...

Good post, you nailed it. It amazes me that some buyers don’t consider the bond as part of the homes price. That mentality creates a market inefficiency that can benefit the well researched and astute home buyer.

[Pat2015]

Homes south of 44 have bonds (between 10-20 percent do not). The trade off is, do you want an older roof, less efficient AC, poor efficiency windows, popcorn ceilings, old appliances, dated sliding doors, old carpet, and many holes in your drywall?

Ask yourself what you want for your retirement home.

Most new buyers do not want that which is why there’s been more new homes sold vs preowned homes sold in the past few quarters.

[Topspinmo]

that is not not what happens ,like I said before, you may have someone bid subtracting the bond but you don’t accept it , most buyers who want your home will pay the price with the bond. The longest I lived in any of the 5 homes I sold in villages was about 4 years so I owed most of the bond . The last home I sold was about 2 1/2 years ago so the market has changed somewhat , I’mi in my first preowned home in villages now , the house had no bond , but it sold for the same price as comparable models ,so the sellers gained nothing by paying it off and I would have bought this home with a bond anyway


But, you did, cause you don’t have to pay off bond. That’s bottom line regardless if house has bond or no bond.

[frayedends]

She is a licensed real estate agent, but not a Realtor.

The term realtor is used by the general public to describe any real estate agent. While I do know that it has a specific meaning (Realtor is trademarked by the National Association of Realtors) I don't think splashes was trying to mislead.

[retiredguy123]

The term realtor is used by the general public to describe any real estate agent. While I do know that it has a specific meaning (Realtor is trademarked by the National Association of Realtors) I don't think splashes was trying to mislead.
I don't either. The poster is just misinformed. I'm sure the NAR doesn't consider all real estate agents as Realtors. They charge a lot of money to use the "Realtor" title. I am part of the general public but I don't refer to all real estate agents as Realtors.

[Topspinmo]

Most new buyers do not want that which is why there’s been more new homes sold vs preowned homes sold in the past few quarters.

Popcorn ceilings been out for at least 40 years.
I would guess only district 1 and maybe 2 has pop corn ceilings? 50 to 100 grand savings lot money for some and for some it’s not. You always pay full price buying new not so much for pre-owned anything.

[manaboutown]

The term Realtor is a registered trademark. Since its use is not adequately policed by NAR many members of the general public commonly use realtor when referring to any licensed real estate agent. Using realtor when meaning real estate agent is akin to referring to jeans as Levis, soft drinks as cokes, sewing machines as Singers, vacuum cleaners as Hoovers, paper tissue as Kleenex and so on.

[BrianL99]

For many folks that have a mortgage, the taxes are reported on IRS form 1098. Whatever is in that box is what goes in the 1040. Since escrow is collected and paid by the mortgage company, folks just go off of the documentation provided.

I agree that for folks with no mortgage its on them to ensure the correct amount of taxes is reported....


That's an interesting (no pun intended) point. I don't have any mortgages and I just pulled out an old 1099 from a mortgage I had a few years ago. I suspect you're right, if the bank was collecting Escrow, the amount paid would show up as one lump some and I doubt the IRS would challenge that, even though it would be incorrect.

All this nonsense about bonds, baffle me. The Bond is nothing more than an additional cost when you buy a home in TV, new or pre-owned. It's not a "pay as you go" expense, unless you elect to do it that way ... in which case, you get an exorbitant interest rate and any associated fees. Along with the fact that it's legally not tax deductible.

WTH? If I home is $500,000 + $30,000 Bond, the true selling price is $530,000. It's not complicated.

Granted, not all pre-owned homes are identical, but if one has a $20,000 outstanding Bond, you're paying $20,000 more than the sale price.

Geez, it's 4th grade math.

[Normal]

The term Realtor is a registered trademark. Since its use is not adequately policed by NAR many members of the general public commonly use realtor when referring to any licensed real estate agent. Using realtor when meaning estate agent is akin to referring to jeans as Levis, sewing machines as Singers, vacuum cleaners as Hoovers, paper tissue as Kleenex and so on.

I definitely would skip a realtor if at all possible, For sure many are selling on their own now. It is a waste to pay commissions if you can possibly avoid it. A surcharge on the sales price to pay for the middle man (real estate agent) is a waste of resources that could be better spent elsewhere.

[retiredguy123]

Popcorn ceilings been out for at least 40 years.
I would guess only district 1 and maybe 2 has pop corn ceilings? 50 to 100 grand savings lot money for some and for some it’s not. You always pay full price buying new not so much for pre-owned anything.
The problem is that many of the pre-owned houses are not priced lower than the new houses. In many cases, you get a lower price for a new house. A house recently sold on my street for a higher price than the new houses being built in Newell, even though the new houses had more square footage, and a 2.5 car garage as compared with a 1.5 car garage.

[Normal]

I’ve seen popcorn in Mallory and in a few houses in the same village none. I would guess going south just after 466 the change on popcorn was phased out? Perhaps during construction of that Village? Of course a home owner might just want it removed if it was there.

[retiredguy123]

I definitely would skip a realtor if at all possible, For sure many are selling on their own now. It is a waste to pay commissions if you can possibly avoid it. A surcharge on the sales price to pay for the middle man (real estate agent) is a waste of resources that could be better spent elsewhere.
Are you suggesting buying a FSBO? I won't even look at FSBOs because every time I have, the house is overpriced because the owner has a biased and unrealistic opinion of the actual value. Some FSBO sellers think that the buyer should pay 100 percent of the cost for upgrades and that they should share in the real estate commission that they think they are saving by not hiring a broker.

[Normal]

Are you suggesting buying a FSBO? I won't even look at FSBOs because every time I have, the house is overpriced because the owner has a biased and unrealistic opinion of the actual value. Some FSBO sellers think that the buyer should pay 100 percent of the cost for upgrades and that they should share in the real estate commission that they think they are saving by not hiring a broker.

For Sale By Owner FSBO has really come along with the introduction of Zillow and Redfin. I would look at those sites before offering 5% more for a home. It’s simple, just choose the filters you want and view the pics on line. If you are afraid of overpaying, just do the square footage price calculation. Check others being sold and decide for yourself.

Step 1 Go to Zillow and look
Step 2 Check homes selling that are similar Price divided by square feet
Step 3 Make an offer

It’s that simple

Home selling is almost as easy

Step 1 Take pictures of your house
Step 2 Log onto Zillow and upload your pics
Step 3 Accept an offer
Step 4 Choose a title company to do all the paperwork

Easiest Option…go with a flat rate seller in The Villages. Additional costs of up to 5k can be expected though.

[Maker]

Lots to consider about bonds, but please be aware there is a yearly administrative fee on the bond. That added amount is roughly 5% to 10% of the bond payment due. People often neglect that extra cost, but it can be significant when building the multi-year model of costs.
I pulled up a 30 year bond schedule at random. Totals:
Principle 22450 Int @4.3% 17300 Admin 2800 (about $95/yr) Total 42550 (admin fee added = 7.04% of prin + int)
Bond interest rates are much higher for new builds, but closer to this for recent builds.

A few other monthly costs you should consider for your budget.
The amenity fee pays for the rec facilities. It gets raised to the current highest amount upon purchase, I think around $204/month now. This is not the yearly maintenance fee (infrastructure maintenance) that comes in the tax bill.
Other monthly costs are water, sewer, and trash. Water here is a lot more $ than other states. Plan around $100 to $175 a month for these 3 things.

If you buy where there is natural gas plan about $35/month.

Electricity will depend upon things you run all the time (lights, alexa devices, tv boxes, computers, music, chargers) and things on demand (a/c, TV, cooking, vacuums, etc). Could be $100/month to $300/month. More in mid summer than spring or fall (a/c).

Lastly, search for threads about home owner's insurance costs.

[frayedends]

The term Realtor is a registered trademark. Since its use is not adequately policed by NAR many members of the general public commonly use realtor when referring to any licensed real estate agent. Using realtor when meaning estate agent is akin to referring to jeans as Levis, soft drinks as cokes, sewing machines as Singers, vacuum cleaners as Hoovers, paper tissue as Kleenex and so on.

Yup. I didn’t know the difference until I married a Realtor. I always said realtor for any real estate agent.

[Altavia]

That's an interesting (no pun intended) point. I don't have any mortgages and I just pulled out an old 1099 from a mortgage I had a few years ago. I suspect you're right, if the band was collecting Escrow, the amount paid would show up as one lump some and I doubt the IRS would challenge that, even though it would in correct.

All this nonsense about bonds, baffle me. The Bond is nothing more than an additional cost when you buy a home in TV, new or pre-owned. It's not a "pay as you go" expense, unless you elect to do it that way ... in which case, you get an exorbitant interest rate and any associated fees. Along with the fact, that it's legally not tax deductible.

WTH? If I home is $500,000 + $30,000 Bond, the true selling price is $530,000. It's not complicated.

Granted, not all pre-owned homes are identical, but if one has a $20,000 outstanding Bond, you're paying $20,000 more than the sale price.

Geez, it's 4th grade math.

Really?

A buyer who sells the home three years later passing the bond on does not pay $20K.

There are bonds from just a few years ago near 4%, you can easily earn more than that in investments or even CD's now days.

What if interest rates go back to +10%, would it have been smart to pay off the bond?

[manaboutown]

Yup. I didn’t know the difference until I married a Realtor. I always said realtor for any real estate agent.

"When a registered trademark owner fails to police and enforce the unauthorized use of their trademark, the trademark owner risks losing the mark through a form of abandonment known as genericide. Genericide is when a protected mark becomes a generic term for the item it is associated with over time. A trademark suffers genericide when the trademark or tradename becomes so commonly used by the general public that the trademark becomes synonymous with the product, and if the entity that owns the trademark does not fight to keep the trademark protected, the trademark or tradename can become a generic term, i.e., it can lose its legally protectable distinctness."

from: Trademark Genericide: How To Protect Your Brand - Revision Legal (https://revisionlegal.com/trademark/trademark-attorney/trademark-genericide/)

[retiredguy123]

"When a registered trademark owner fails to police and enforce the unauthorized use of their trademark, the trademark owner risks losing the mark through a form of abandonment known as genericide. Genericide is when a protected mark becomes a generic term for the item it is associated with over time. A trademark suffers genericide when the trademark or tradename becomes so commonly used by the general public that the trademark becomes synonymous with the product, and if the entity that owns the trademark does not fight to keep the trademark protected, the trademark or tradename can become a generic term, i.e., it can lose its legally protectable distinctness."

from: Trademark Genericide: How To Protect Your Brand - Revision Legal (https://revisionlegal.com/trademark/trademark-attorney/trademark-genericide/)
I think the problem is that licensed real estate agents don't use the term "Realtor" on their business cards and letterhead unless they are actual Realtors. But, how do you prevent the general public from misusing the name? Personally, I think the NAR should replace the Realtor name with a new name that is more unique than the current name.

[frayedends]

"When a registered trademark owner fails to police and enforce the unauthorized use of their trademark, the trademark owner risks losing the mark through a form of abandonment known as genericide. Genericide is when a protected mark becomes a generic term for the item it is associated with over time. A trademark suffers genericide when the trademark or tradename becomes so commonly used by the general public that the trademark becomes synonymous with the product, and if the entity that owns the trademark does not fight to keep the trademark protected, the trademark or tradename can become a generic term, i.e., it can lose its legally protectable distinctness."

from: Trademark Genericide: How To Protect Your Brand - Revision Legal (https://revisionlegal.com/trademark/trademark-attorney/trademark-genericide/)


I doubt there'd be any trademark issues for a person saying, "Hey I know a realtor you can call." It has nothing to do with trademark infringement.

Apart from that, and a total guess, but I would not be surprised if prior to 1950 when NAR trademarked it, everyone used the term realtor. After all, their name is National Association of Realtors. There have been other instances of companies or people trademarking terms in common use.

None of this really matters. I was just saying that we shouldn't get our panties in a bunch if someone refers to a VLS agent as a realtor.

[retiredguy123]

For Sale By Owner FSBO has really come along with the introduction of Zillow and Redfin. I would look at those sites before offering 5% more for a home. It’s simple, just choose the filters you want and view the pics on line. If you are afraid of overpaying, just do the square footage price calculation. Check others being sold and decide for yourself.

Step 1 Go to Zillow and look
Step 2 Check homes selling that are similar Price divided by square feet
Step 3 Make an offer

It’s that simple

Home selling is almost as easy

Step 1 Take pictures of your house
Step 2 Log onto Zillow and upload your pics
Step 3 Accept an offer
Step 4 Choose a title company to do all the paperwork

Easiest Option…go with a flat rate seller in The Villages. Additional costs of up to 5k can be expected though.
Did you see the FSBO currently being advertised on TOTV? Price "reduced" to $349K. But, Zillow says it's only worth $321K, and it sold 2.5 years ago for $222K. The house is 24 years old.

[BrianL99]

All this nonsense about bonds, baffle me. The Bond is nothing more than an additional cost when you buy a home in TV, new or pre-owned. It's not a "pay as you go" expense, unless you elect to do it that way ... in which case, you get an exorbitant interest rate and any associated fees. Along with the fact that it's legally not tax deductible.

WTH? If I home is $500,000 + $30,000 Bond, the true selling price is $530,000. It's not complicated.

Granted, not all pre-owned homes are identical, but if one has a $20,000 outstanding Bond, you're paying $20,000 more than the sale price.

Geez, it's 4th grade math.

Really?

A buyer who sells the home three years later passing the bond on does not pay $20K.

There are bonds from just a few years ago near 4%, you can easily earn more than that in investments or even CD's now days.

What if interest rates go back to +10%, would it have been smart to pay off the bond?

Where did I say it was smart or not smart to pay off a bond?

& if someone sells a home in 3 years, you're right ... he didn't pay $20,000 ... he/she paid the interests & costs and borrowed the money. Those "near 4% Bonds" you mentioned, were a great deal when you could borrow money at 3%, huh?

A bond is just another type of mortgage. You borrow the money and pay it back over time. The exact same considerations someone would make with a mortgage, is exactly what you'd do with a Bond. Weigh the interest rates and do what you think is prudent. It's just a mortgage that's secured differently. As someone else pointed out, it's not backed with a personal guaranty, but backed by it's priority lien, so it's not a "personal debt".

The one and only time I can think of, when a Bond is different than a mortgage from a Buyer's perspective, is when the financing ratio is tight. A Primary Lender who's selling mortgages on the secondary market, has Loan to Value ratios to worry about. A CDD Bond is a slightly different circumstance from that viewpoint. That said, it sort of washes itself out, as it affects income to expense ratios.

[Normal]

Did you see the FSBO currently being advertised on TOTV? Price "reduced" to $349K. But, Zillow says it's only worth $321K, and it sold 2.5 years ago for $222K. The house is 24 years old.

Hey, there are plenty overpriced homes out there. Some are by realtor, some by The Villages, some BO. I get it. Most homes are coming off that 2022 wish list though lol. A realtor certainly doesn’t guarantee the lowest price.

Buyers do need to do their Homework. Prices are downward against last month’s comps.

Check out this clown show

Homefinder - The Villages(R) Homes and Villas for Sale (https://www.thevillages.com/homefinder/S58V.43?new&preowned&homesites&status&lng=-81.95806888827964&lat=28.788517923605564&lvl=7)


It was purchased in 21 for 799,990. Pardon Our Interruption (https://www.realtor.com/realestateandhomes-detail/5935-Barley-Path_The-Villages_FL_32163_M95776-42856) Now asking 1.2 million.

Investment of a pool at 130 k. I think they are just wishing upon a star.

The house you mentioned was bought in 2021 for 222,000 dollars. What a joke! Now they want 350k!

[petsetc]

///

[BrianL99]

Yup. I didn’t know the difference until I married a Realtor. I always said realtor for any real estate agent.

This is great article on the subject.

The obvious flaw in the situation, is the general use of REALTOR® as a noun and that will likely be the catalyst when they lose their trademark.

https://www.washingtonpost.com/archive/realestate/1993/04/17/for-realtors-theres-plenty-in-a-name/77d1f3a5-380b-48de-af88-3032bf96dc3a/

[petsetc]

Lots to consider about bonds, but please be aware there is a yearly administrative fee on the bond. That added amount is roughly 5% to 10% of the bond payment due. People often neglect that extra cost, but it can be significant when building the multi-year model of costs.
I pulled up a 30 year bond schedule at random. Totals:
Principle 22450 Int @4.3% 17300 Admin 2800 (about $95/yr) Total 42550 (admin fee added = 7.04% of prin + int)
Bond interest rates are much higher for new builds, but closer to this for recent builds.


Be careful here because if you pay your tax bill in November, the 4% discount applies to the total, including the bond, of which the bond holders are not eating the discount, it is made up by the admin fee.

[Daddymac]

That's true so if the buyer is paying cash it's definitely a benefit to have it paid. But if they pay cash and pay off the bond too I still think it's a wash. If you have 2 models exact same model and lot in the same location and one is 400K with no bond and the other has a 25K bond they probably will be listing for 375K.

That's really just my opinion but I'm sure people take into account bond value when setting a list price.

The home with the 375k and 25k bond would cost more in the long run. The 25k bond can not be written off. The 400k would be included in the mortgage payment…. Now you can write it off .

[BrianL99]

Hey, there are plenty overpriced homes out there. Some are by realtor, some by The Villages, some BO.


It was purchased in 21 for 799,990. Pardon Our Interruption (https://www.realtor.com/realestateandhomes-detail/5935-Barley-Path_The-Villages_FL_32163_M95776-42856) Now asking 1.2 million.

Investment of a pool at 130 k. I think they are just wishing upon a star.


The market is mixed.
101360

101361

101362

[frayedends]

This is great article on the subject.

The obvious flaw in the situation, is the general use of REALTOR® as a noun and that will likely be the catalyst when they lose their trademark.

https://www.washingtonpost.com/archive/realestate/1993/04/17/for-realtors-theres-plenty-in-a-name/77d1f3a5-380b-48de-af88-3032bf96dc3a/

Thanks Brian. That is a great article. I guess I understand why Retiredguy felt the need to respond to the use of the term realtor. From the article...

"Local NAR member associations nationwide are under orders to police uses of the word Realtor and intervene when necessary."

[Altavia]

Hey, there are plenty overpriced homes out there. Some are by realtor, some by The Villages, some BO. I get it. Most homes are coming off that 2022 wish list though lol. A realtor certainly doesn’t guarantee the lowest price.

Buyers do need to do their Homework. Prices are downward against last month’s comps.

Check out this clown show

Homefinder - The Villages(R) Homes and Villas for Sale (https://www.thevillages.com/homefinder/S58V.43?new&preowned&homesites&status&lng=-81.95806888827964&lat=28.788517923605564&lvl=7)


It was purchased in 21 for 799,990. Pardon Our Interruption (https://www.realtor.com/realestateandhomes-detail/5935-Barley-Path_The-Villages_FL_32163_M95776-42856) Now asking 1.2 million.

Investment of a pool at 130 k. I think they are just wishing upon a star.

The house you mentioned was bought in 2021 for 222,000 dollars. What a joke!

You may be on to something that we are headed for a buyers market...

[Altavia]

Be careful here because if you pay your tax bill in November, the 4% discount applies to the total, including the bond, of which the bond holders are not eating the discount, it is made up by the admin fee.

Nice observation, had not comprehended that.

[Dilligas]

"Simple question What is the average real-world saving"
Simple answer - $30,000
That is dependent on the current bond value. If the home is 15 years old, at least half or more of the bond will be paid off. If the homes are new....then the bond value is the difference.

[Altavia]

Where did I say it was smart or not smart to pay off a bond?

& if someone sells a home in 3 years, you're right ... he didn't pay $20,000 ... he/she paid the interests & costs and borrowed the money. Those "near 4% Bonds" you mentioned, were a great deal when you could borrow money at 3%, huh?

A bond is just another type of mortgage. You borrow the money and pay it back over time. The exact same considerations someone would make with a mortgage, is exactly what you'd do with a Bond. Weigh the interest rates and do what you think is prudent. It's just a mortgage that's secured differently. As someone else pointed out, it's not backed with a personal guaranty, but backed by it's priority lien, so it's not a "personal debt".

The one and only time I can think of, when a Bond is different than a mortgage from a Buyer's perspective, is when the financing ratio is tight. A Primary Lender who's selling mortgages on the secondary market, has Loan to Value ratios to worry about. A CDD Bond is a slightly different circumstance from that viewpoint. That said, it sort of washes itself out, as it affects income to expense ratios.


"Geez, it's 4th grade math." ;-)

Don't let the tail wag the dog.

[manaboutown]

"Realtor Real estate agent National Association of Realtors Often used by the public, the media, and even real estate agents to refer generally to any real estate agent, but the term is a legally recognized trademark of the National Association of Realtors. The terms "Realtor" and "Realtors" refer to members of this association, and not to real estate agents generally. The National Association of Realtors is engaged in ongoing efforts to prevent the mark from becoming generic. These efforts include, among other things, writing to members of the media to complain of improper usage, distribution of information and guidelines on correct usage, and the development of an educational video on the subject.[163]"

From: List of generic and genericized trademarks - Wikipedia (https://en.wikipedia.org/wiki/List_of_generic_and_genericized_trademarks)

I have been guilty of using Xerox as a verb, and many of the listed marks such as Tupperware, Thermos, Scotch tape, Q-tips, post-it and Crock-Pot as nouns.

[CoupleNCA]

Finally! We now have a handle on the typical real-world savings of a bond vs. no bond. And also the tax considerations. And that maybe we need to re-think our realtor. We thank you all for your helpful insights.

Weirdly, our original concerns made us even more interested in The Villages. Your quick opinions and helpful responses in this forum are indicative of exactly the kinds of neighbors we'd like to be around.

Thanks again to everyone that answered our question.

[frayedends]

That is dependent on the current bond value. If the home is 15 years old, at least half or more of the bond will be paid off. If the homes are new....then the bond value is the difference.

Bond is not half paid off at 15 years. Just like a mortgage, you are paying more interest in the earlier years and less later. Example here...

https://www.districtgov.org/departments/Finance/amortization/Lake/District%2014/L14%20-%20Unit%2065V.pdf

[MrChip72]

We bought our home new in the spring of 2022, south of 44. Ballpark figure for the bond is under $150/month for 30 years. Our annual total expenses (utilities, taxes, bond, insurance, and amenity fees) are around $17k, so it's about 10% of our expenses. Not really a big deal to me. Surely with inflation, in 10-15 years the bond will end up being 5% of our total expenses, or less.

[DavidK]

Here is a snip from our bill. Once you are interested in a property, you can search the county's property site for tax information.
NON-AD VALOREM TAXES
F111 Fruitland Pk Villages, Res Fire $212.00
C087 VCDD 11 Debt (see note below) $1,828.72
C088 VCDD 11 Maintenance $721.20
TOTAL $2,761.92

[DavidK]

Here is a snip from our bill. Once you are interested in a property, you can search the county's property site for tax information.

NON-AD VALOREM TAXES

F111 Fruitland Pk Villages, Res Fire $212.00
C087 VCDD 11 Debt (see note below) $1,828.72
C088 VCDD 11 Maintenance $721.20
TOTAL $2,761.92

[augustnotes]

Bonds on a new home can be 30 to 40 thousand dollars can be paid over 30 years. That's one reason to tell people they are selling their house that has no bond. Say you are looking at a house with a sales price of $450,000 and you know your max that you can afford to pay for a mortgage will max out at $450,000 well then you need to shrink your home sales price down let's say $40,000 to cover the bond that you will have to pay. That's in addition to the monthly HOA fee that can run a few hundred dollars a month forever and will go up with the CPI.

[motherflippinpicker]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.


You might want to research what CDDs are to better understand a bond requirement. When I first moved to Florida and bought a home (not in TV) my home had a bond and I was extremely confused. You also can pay off a bond in a lump sum payment. If you are buying a home with a $30k bond, you might want to pay that off in one payment by splitting your down payment. Bonds will significantly increase your property taxes, they will be under the non ad valorem category. I would look at some nearby properties with similar bonds and see what the taxes are so you have an idea.

[Bogie Shooter]

Bonds on a new home can be 30 to 40 thousand dollars can be paid over 30 years. That's one reason to tell people they are selling their house that has no bond. Say you are looking at a house with a sales price of $450,000 and you know your max that you can afford to pay for a mortgage will max out at $450,000 well then you need to shrink your home sales price down let's say $40,000 to cover the bond that you will have to pay. That's in addition to the monthly HOA fee that can run a few hundred dollars a month forever and will go up with the CPI.

No HOA in The Villages,

[kansasr]

No HOA in The Villages,

You may not call it an HOA but with a monthly amenity fee in addition to your annual district tax I say potato potato

[Travelhunter123]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.
In theory the price of the home where the bond is paid off should be higher than a home still has a bond. In actuality my realtor advised me not to pay off the bond as the resale values seldom reflect the full value of the bond payoff

[4$ALE]

You may not call it an HOA but with a monthly amenity fee in addition to your annual district tax I say potato potato

:smiley: Also NO "annual district tax"

[merrymini]

I call everyone who sells real estate a realtor. Come get me.

[Bogie Shooter]

You may not call it an HOA but with a monthly amenity fee in addition to your annual district tax I say potato potato

It’s called the amenity fee not a home owners fee.
The HOA gives people a different prospective, not usually good.

[zuidemab]

For a highly qualified independent agent contact: Kerry Hanson, Realtor, Kerrysellsthevillages@gmail.com

[BlueStarAirlines]

Risking beating this dead horse any farther.......

A few of the posts in this thread talk about high bond interest rates, but mine its only 3.18% (District 13). My credit union has CDs paying 5.01%. Until those CD rates drop it wouldn't make much sense to use those funds to pay off the bond.
Looking at District 15 their rates are 5.19% for the units listed with their total bonds $50k and up.

When considering a home, it shouldn't just be bond vs no-bond, but also interest rate on the bond.

[charlieo1126@gmail.com]

Popcorn ceilings been out for at least 40 years.
I would guess only district 1 and maybe 2 has pop corn ceilings? 50 to 100 grand savings lot money for some and for some it’s not. You always pay full price buying new not so much for pre-owned anything.my brand new home in 2007 had popcorn in Virginia trace after the tornado came through and recked it there was no more popcorn

[jrref]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

Mostly everthing said so far about the Bond is true BUT at the end of the day, a house with No Bond is just another selling point like having a pool or a view. A home with a paid off bond will definetly be a couple thousand dollars cheaper to run every year.

Also, those who say I get more interest in the bank so i'm not paying off the bond, on a new or relatively new home you are paying mostly interest just like a regular mortgage so since interest rates won't be this high forever, in a couple of years when they go back down, all you would have done is paid more of the bond interest and very little of the principal.

Bottom line, if you have the money or plan on staying in your home for 5+ years or forever, then pay off the bond. If you plan to move every couple of years then don't.

Also remember even a large $40,000 bond in an expensive home can get easily hidden in a $900 - $1 million dollar home so you can always arrange to re-coup the cost. Most of the older homes 5+ years old have bonds in the $20,000 range. So why pay interest and administrative fees every year?

[Pat2015]

In theory the price of the home where the bond is paid off should be higher than a home still has a bond. In actuality my realtor advised me not to pay off the bond as the resale values seldom reflect the full value of the bond payoff
That’s why I’ve never paid off the bond on any of the houses I’ve purchased in TV. Paying off the bond does not increase the value of the house.

[retiredguy123]

my brand new home in 2007 had popcorn in Virginia trace after the tornado came through and recked it there was no more popcorn
Did you know that popcorn shrimp has no popcorn?

[Bill14564]

Risking beating this dead horse any farther.......

A few of the posts in this thread talk about high bond interest rates, but mine its only 3.18% (District 13). My credit union has CDs paying 5.01%. Until those CD rates drop it wouldn't make much sense to use those funds to pay off the bond.
Looking at District 15 their rates are 5.19% for the units listed with their total bonds $50k and up.

When considering a home, it shouldn't just be bond vs no-bond, but also interest rate on the bond.

True, but you also need to add the admin then calculate the effective interest rate for yourself. Because the admin fee is fixed, its impact on the effective interest rate (or cost of money) increases each year. There may come a point where you are actually paying more than 5.01% for the bond.

(Not to mention that it wasn't that long ago that you were not receiving 5.01% at your bank. Things change and what looks like the smart decision today may not have been the best decision last year, or next)

[Bill14564]

That’s why I’ve never paid off the bond on any of the houses I’ve purchased in TV. Paying off the bond does not increase the value of the house.

But a paid off bond does increase the value of the total purchase (or net value of the house if you prefer).

With enough things being equal I would certainly purchase the home that no longer carried the bond. Of course, it is usually the case that not enough things are equal.

[Pat2015]

Where did I say it was smart or not smart to pay off a bond?

& if someone sells a home in 3 years, you're right ... he didn't pay $20,000 ... he/she paid the interests & costs and borrowed the money. Those "near 4% Bonds" you mentioned, were a great deal when you could borrow money at 3%, huh?

A bond is just another type of mortgage. You borrow the money and pay it back over time. The exact same considerations someone would make with a mortgage, is exactly what you'd do with a Bond. Weigh the interest rates and do what you think is prudent. It's just a mortgage that's secured differently. As someone else pointed out, it's not backed with a personal guaranty, but backed by it's priority lien, so it's not a "personal debt".

The one and only time I can think of, when a Bond is different than a mortgage from a Buyer's perspective, is when the financing ratio is tight. A Primary Lender who's selling mortgages on the secondary market, has Loan to Value ratios to worry about. A CDD Bond is a slightly different circumstance from that viewpoint. That said, it sort of washes itself out, as it affects income to expense ratios.
I’d rather pay the 4% interest on a 20k bond over three years rather than pay the bond off at closing if I sell in 3 years! Paying off the bond does not increase the appraised value of the property.

[retiredguy123]

I’d rather pay the 4% interest on a 20k bond over three years rather than pay the bond off at closing if I sell in 3 years! Paying off the bond does not increase the appraised value of the property.
When you sell the house, you don't need to pay off the bond at closing. The buyer automatically assumes the bond payments.

[CoachKandSportsguy]

That’s why I’ve never paid off the bond on any of the houses I’ve purchased in TV. Paying off the bond does not increase the value of the house.

I agree and disagree with that statement.
Paying off the bond doesn't change the valuation of the house, i agree.
Getting a buyer to pay above the "valuation" may happen just fine due to there being no bond, as a buyer constraint

depends upon the buyer and his/her/their motivation and how the sell price is set, and the competing houses. Fewer houses for sale, motivated buyer, priced above the market, buyers looking for no bond specifically, they might buy it. .

This is not a black and white, yes or no topic.

retired finance guy

I have seen stupid corporations buy over value companies and then go bankrupt on deals I was part of. There are no shortages of buyers whose concept of value is skewed. .

[retiredguy123]

I look at it this way. If I pay off a $20K bond, the best I can do when I sell is to break even by getting a buyer to pay $20K more than the appraised value. But, most likely, I will get less than the $20K. And, if the current CD interest rate is comparable to the bond interest rate, it makes no sense to pay off the bond.

[Normal]

I look at it this way. If I pay off a $20K bond, the best I can do when I sell is to break even by getting a buyer to pay $20K more than the appraised value. But, most likely, I will get less than the $20K. And, if the current CD interest rate is comparable to the bond interest rate, it makes no sense to pay off the bond.

The bottom line is financial. Home loans don’t go above appraisals. Bond paid or not paid isn’t consequential to 3rd party observation. Banks don’t give loans above appraisal for good reason. You could ask more, but it really is a buyers market with the supply surplus. At best, you are talking about a carrot on the stick in this market.

[Bill14564]

I look at it this way. If I pay off a $20K bond, the best I can do when I sell is to break even by getting a buyer to pay $20K more than the appraised value. But, most likely, I will get less than the $20K. And, if the current CD interest rate is comparable to the bond interest rate, it makes no sense to pay off the bond.

Perhaps today, but what would your calculation have been for the previous five years when CD rates were below 3%? In 2019 would you have made the argument that even though the bond rate was higher than the CD rate you were not going to pay it off?

[nn0wheremann]

“ most folks no longer itemize deductions after the Tax Cuts and Jobs Act of 2017, …”
But this all goes away in 2025. All of the individual tax provisions of the 2017 Tax Cuts and Jobs Act (TCJA) expire at the end of 2025. Among the changes: Individual income tax rates will revert to their 2017 levels. The standard deduction will be cut roughly in half, the personal exemption will return while the child tax credit (CTC) will be cut.

Time to put on your old Boy Scout hat and Be Prepared!

[ron32162]

NOT A REALTOR is the first thing Village sales people are Sales agents with a real estate license and their principal is the builder not the buyer. You can only buy new homes from the builder here in The Villages.

[Normal]

NOT A REALTOR is the first thing Village sales people are Sales agents with a real estate license and their principal is the builder not the buyer. You can only buy new homes from the builder here in The Villages.

The control issue is tight. Keep in mind they own the closing bank in most cases (Citizens First). The previously owned homes will eventually remove the grip from the market they have. If used homes are cheaper than new homes per square footage the developer has less choices in sales pricing. Once real estate modernizes here with flat rate sales, prices will depreciate further. The Villages won’t have the skimming business through their real estate staff with large bonus percentages per sale.

That said, home prices are moving downward. Interest rates, financial pressures, and primary investment group withdrawals are causing liquidation in the current market here. Then there is the real beast in any retirement community that eventually will come, disinterested heirs who just want liquidations.

[retiredguy123]

Perhaps today, but what would your calculation have been for the previous five years when CD rates were below 3%? In 2019 would you have made the argument that even though the bond rate was higher than the CD rate you were not going to pay it off?
I hate debt, but I never considered paying off the bond because I don't look at it as personal debt. Paying off the bond just reduces the net sales value of the house.

[BrianL99]

Anyone who thinks a $400,00 home with no Bond is worth paying the same price as a $400,000 home with a $30,000 Bond, is smokin' really good stuff.

A Bond is simply a mortgage with another name. An outstanding liability and lien, with an obtuse name that people don't seem to understand. The only real world difference from a mortgage, is the loan is assumable and (& to my knowledge) can't be "called".

To those who argue it doesn't change the "appraised value" of a home ... no kidding! When a home is appraised, the value/price doesn't change, based on the amount of the outstanding mortgage. The house is the house. The mortgages or liens, are an irrelevant part of the process.

The decision to pay off a Bond, is no different than the decision to pay off a mortgage. The exact same criteria apply, unless you need to borrow money to do it and loan to value ratio are an issue for your bank.

To those who suggest that "buyers don't care", you're simply wrong. It's not that anyone doesn't care, it's that a % of buyers are idiots and don't understand. Anyone with a modicum of common sense knows that $400,000 + $30,000 = $430,000 and that's more than $400,000.

[Normal]

Anyone who thinks a $400,00 home with no Bond is worth the same as a $400,000 home with a $30,000 Bond, is smokin' really good stuff.

Most agree bonds correlate positively with newer structures which have newer roofs, newer ACs, newer everything. Renovation costs are greatly diminished..

There lies the trade-off. Eventually all needs replaced. The higher bond also means a longer shelf life for replacement of most things. It really is a wash.

The real bonus is being able to buy a new house with the bond already paid off. If the said house is older, there is no gain. Amortization equates with shelf life.

Even go the step further and discuss ...remodeling a “No Bond” home with a newer kitchen, carpet change, roof replacement, water heater swap and changing old style aluminum clad windows out. If those costs are factored in, a “No Bond” home actually costs much more than a newer bonded home..

[retiredguy123]

Anyone who thinks a $400,00 home with no Bond is worth paying the same price as a $400,000 home with a $30,000 Bond, is smokin' really good stuff.

A Bond is simply a mortgage with another name. An outstanding liability and lien, with an obtuse name that people don't seem to understand. The only real world difference from a mortgage, is the loan is assumable and (& to my knowledge) can't be "called".

To those who argue it doesn't change the "appraised value" of a home ... no kidding! When a home is appraised, the value/price doesn't change, based on the amount of the outstanding mortgage. The house is the house. The mortgages or liens, are an irrelevant part of the process.

The decision to pay off a Bond, is no different than the decision to pay off a mortgage. The exact same criteria apply, unless you need to borrow money to do it and loan to value ratio are an issue for your bank.

To those who suggest that "buyers don't care", you're simply wrong. It's not that anyone doesn't care, it's that a % of buyers are idiots and don't understand. Anyone with a modicum of common sense knows that $400,000 + $30,000 = $430,000 and that's more than $400,000.
Those idiot buyers are a good reason to not pay off the bond.

[BrianL99]

Most agree bonds correlate with newer structures with newer roofs, newer ACs, newer everything. Renovation costs are greatly diminished..

There lies the trade-off. Eventually all needs replaced. The higher bond also means a longer shelf life for replacement of most things. It really is a wash.

The real bonus is being able to buy a new house with the bond already paid off. If the said house is older, there is no gain. Amortization equates with shelf life.

Even go the step further and discuss remodeling a kitchen, changing carpet, replacing a roof and water heater and changing old style aluminum clad windows. If those costs are factored in, a “No Bond” home actually costs much more than a new bonded home..

Ahhh ... I see!

So you're buying a "Home Warranty" for $40,000? Great deal, go for it!

Not trying to be a jerk here, but you're not getting it. A "Bond" has nothing to do with the house or structure. It is attached to the land. It is a land cost. It was for the purchase of that portion of the infrastructure, attributable to that lot of land.

If you need any further proof of that, find out what happens to the Bond, if the house is destroyed. It doesn't change. The Bond is still attached to the land. If you or your insurance company pays to re-build the home, the Bond remains unchanged and unaffected.

[Bogie Shooter]

Not trying to be a jerk here,
🤷🏼

[Papa_lecki]

Vegas just set the over/under on this post to 225 threads.
I just bet my bond balance on the over.

[Altavia]

Most agree bonds correlate positively with newer structures which have newer roofs, newer ACs, newer everything. Renovation costs are greatly diminished..

There lies the trade-off. Eventually all needs replaced. The higher bond also means a longer shelf life for replacement of most things. It really is a wash.

The real bonus is being able to buy a new house with the bond already paid off. If the said house is older, there is no gain. Amortization equates with shelf life.

Even go the step further and discuss ...remodeling a “No Bond” home with a newer kitchen, carpet change, roof replacement, water heater swap and changing old style aluminum clad windows out. If those costs are factored in, a “No Bond” home actually costs much more than a newer bonded home..

Also if not constructed to the current wind mitigation standards, add $1-2K per year in insurance cost - and probably even more in the future.

[nancyre]

2015 home in Lake County - Size 3/2 1600Sq ft 2023 figures
Maintenance $618.89
Bond $1569.22
Fire rescue $225.00
Total Non-Ad Valorem Assessments
Hope some real #s help

[CoachKandSportsguy]

Vegas just set the over/under on this post to 225 threads.
I just bet my bond balance on the over.

:agree:

:mademyday:

I love these bond threads because its easy to read who understands the concepts and different viewpoints, the buyer the seller and the real estate agent, and who doesn't. . its behavioral finance / economics for sure. . .

[Normal]

:agree:

:mademyday:

I love these bond threads because its easy to read who understands the concepts and different viewpoints, the buyer the seller and the real estate agent, and who doesn't. . its behavioral finance / economics for sure. . .

Chief considerations would be sunk costs (loss of existing yet functional home substructures), opportunity costs (time required to desired restoration) and capital risk(new warrantied home or apprehension on dated structural problems). It is possible the bond is in a way a warranty against an already 20 year old roof, new appliances lasting longer than the 10 year old ones you purchased without the bond and most importantly, a happy wife.

[Bill14564]

Ahhh ... I see!

So you're buying a "Home Warranty" for $40,000? Great deal, go for it!

Not trying to be a jerk here, but you're not getting it. A "Bond" has nothing to do with the house or structure. It is attached to the land. It is a land cost. It was for the purchase of that portion of the infrastructure, attributable to that lot of land.

If you need any further proof of that, find out what happens to the Bond, if the house is destroyed. It doesn't change. The Bond is still attached to the land. If you or your insurance company pays to re-build the home, the Bond remains unchanged and unaffected.

Actually, I think you missed the point.

No, he is not proposing to buy an extended warranty for $40K or anything like that. He is suggesting that the amount of bond remaining is an indication of the age of the home and the increasing probability of large maintenance bills. That is an interesting way to look at things and has some validity but isn't always the case.

Should I buy a new car at $60K or this ten year old car at $20K? Some would say that is a ridiculous question; why would I spend an extra $40K for a car?
"Well, the new car is less likely to have maintenance problems."
"So you're buying a warranty for $40K - go for it."

Of course, it isn't that simple with the bond. While a 30 year old home would no longer have a bond, not all homes without bonds are 30 years old. My home no longer has a bond payment yet it is not 30 years old. The 30 year old home is likely to require additional maintenance or updates. A home where the bond has been paid in advance would not. Using the size of the bond as an indication of upcoming maintenance is an interesting idea but seems too unreliable.

[BrianL99]

...

He is suggesting that the amount of bond remaining is an indication of the age of the home and the increasing probability of large maintenance bills. That is an interesting way to look at things and has some validity but isn't always the case.

...

Of course, it isn't that simple with the bond. While a 30 year old home would no longer have a bond, not all homes without bonds are 30 years old. My home no longer has a bond payment yet it is not 30 years old. The 30 year old home is likely to require additional maintenance or updates. A home where the bond has been paid in advance would not. Using the size of the bond as an indication of upcoming maintenance is an interesting idea but seems too unreliable.

The remaining balance of a Bond has nothing to do with home maintenance or how old the building is. It's simply how much is left to pay off. There is no validity to any argument or statement, that suggests a Bond is related in any way, to the structure on the land.

The Bond is entirely unrelated to a building. It is a mortgage/lien/tax liability on the plot of land. Nothing more, nothing less.

When you buy a home The Villages, you are buying a structure, located on a plot of land, that may or not be free & clear.

If previous owners haven't haven't yet finished paying for the lot of land, the new buyer has to continue paying it off. They can elect to pay the Bond in a lump sum and own their property without that Lien attached to it or they can elect to continue paying off the Note/Lien + Interest + Fees.

It's a mortgage with a different name, folks. Nothing more, nothing less.

But don't take my word for it. Here, read about it from the experts:

Why CDDs? - FMSbonds.com (https://www.fmsbonds.com/news-and-perspectives/why-cdds/)

CDDs: Separating Fact From Fiction - FMSbonds.com (https://www.fmsbonds.com/news-and-perspectives/cdds-separating-fact-from-fiction/)

[BrianL99]

...

He is suggesting that the amount of bond remaining is an indication of the age of the home and the increasing probability of large maintenance bills. That is an interesting way to look at things and has some validity but isn't always the case.

...

Of course, it isn't that simple with the bond. While a 30 year old home would no longer have a bond, not all homes without bonds are 30 years old. My home no longer has a bond payment yet it is not 30 years old. The 30 year old home is likely to require additional maintenance or updates. A home where the bond has been paid in advance would not. Using the size of the bond as an indication of upcoming maintenance is an interesting idea but seems too unreliable.

The remaining balance of a Bond has nothing to do with home maintenance or how old the building is. It's simply how much is left to pay off. There is no validity to any argument or statement, that suggests a Bond is related in any way, to the structure on the land.

The Bond is entirely unrelated to a building. It is a mortgage/lien/tax liability on the plot of land. Nothing more, nothing less.

When you buy a home The Villages, you are buying a structure, located on a plot of land, that may or not be free & clear.

If previous owners haven't haven't yet finished paying for the lot of land, the new buyer has to continue paying it off. They can elect to pay the Bond in a lump sum and own their property without that Lien attached to it or they can elect to continue paying off the Note/Lien + Interest + Fees.

It's a mortgage with a different name, folks. Nothing more, nothing less.

But don't take my word for it. Here, read about it from the experts:

Why CDDs? - FMSbonds.com (https://www.fmsbonds.com/news-and-perspectives/why-cdds/)

CDDs: Separating Fact From Fiction - FMSbonds.com (https://www.fmsbonds.com/news-and-perspectives/cdds-separating-fact-from-fiction/)

[Pessemist]

The question you are asking is better rephrased as,

“What’s the total balance left on the Bond on a particular home?”

At the start bonds can be hefty. $20-$40k

Over time that’s paid off just like your mortgage at whatever interest rate was assigned at the time.

No bond means it has been paid off and a zero balance remains.

It’s important to know the balance (if any) on the bond remaining in a home you are interested in. Otherwise you could be in for an unpleasant surprise of the total monthly mortgage/bond you have to fork.

Each home is unique in amount of their bond balance. Some owners accelerate bond payments or even pay it off early to make selling it easier.

So ssk

[Bill14564]

The remaining balance of a Bond has nothing to do with home maintenance or how old the building is. It's simply how much is left to pay off. There is no validity to any argument or statement, that suggests a Bond is related in any way, to the structure on the land.

The Bond is entirely unrelated to a building. It is a mortgage/lien/tax liability on the plot of land. Nothing more, nothing less.

When you buy a home The Villages, you are buying a structure, located on a plot of land, that may or not be free & clear.

If previous owners haven't haven't yet finished paying for the lot of land, the new buyer has to continue paying it off. They can elect to pay the Bond in a lump sum and own their property without that Lien attached to it or they can elect to continue paying off the Note/Lien + Interest + Fees.

It's a mortgage with a different name, folks. Nothing more, nothing less.

But don't take my word for it. Here, read about it from the experts:



Let me type this more slowly this time: If the bond is not paid in full in advance then the remaining amount of the bond is directly related to the age of the home. One could say the numbers on a calendar have nothing to do with the age of a home, except that as the numbers get higher the home gets older. Likewise, the balance on the bond has nothing to do with the age of a home, except that as the balance gets lower the home gets older.

"It's a mortgage with a different name, folks. Nothing more, nothing less."
- Except the mortgage is directly related to the value of the home - the bond is not
- Except the mortgage on my home is likely different than the mortgage on my neighbor's - the bond is the same
- Except principal on the mortgage can be paid early - principal on the bond cannot
- Except the mortgage must be satisfied for the home to change hands - the bond does not
- Except I can refinance the mortgage to obtain a better rate - I have no ability to refinance the bond
- Except I can itemize interest paid on the mortgage - I cannot itemize interest paid on the bond

Perhaps you meant to say, "It's a mortgage with a different name... except when it isn't"

There are different ways to think about the bond and some are more correct than others.

[Pessemist]

The question you are asking is better rephrased as,

“What’s the total balance left on the Bond on a particular home?”

At the start bonds can be hefty. $20-$40k

Over time that’s paid off just like your mortgage at whatever interest rate was assigned at the time.

No bond means it has been paid off and a zero balance remains.

It’s important to know the balance (if any) on the bond remaining in a home you are interested in. Otherwise you could be in for an unpleasant surprise at the total monthly mortgage/bond you have to fork out.

Each home is unique in amount of their bond balance. Some owners accelerate bond payments or even pay it off early to make the home more attractive when selling it.

So ask

[frayedends]

The question you are asking is better rephrased as,

“What’s the total balance left on the Bond on a particular home?”

At the start bonds can be hefty. $20-$40k

Over time that’s paid off just like your mortgage at whatever interest rate was assigned at the time.

No bond means it has been paid off and a zero balance remains.

It’s important to know the balance (if any) on the bond remaining in a home you are interested in. Otherwise you could be in for an unpleasant surprise at the total monthly mortgage/bond you have to fork out.

Each home is unique in amount of their bond balance. Some owners accelerate bond payments or even pay it off early to make the home more attractive when selling it.

So ask
More like 20-80k now. Mine in lake Denham was ~48K

[Altavia]

Let me type this more slowly this time: If the bond is not paid in full in advance then the remaining amount of the bond is directly related to the age of the home. One could say the numbers on a calendar have nothing to do with the age of a home, except that as the numbers get higher the home gets older. Likewise, the balance on the bond has nothing to do with the age of a home, except that as the balance gets lower the home gets older.

"It's a mortgage with a different name, folks. Nothing more, nothing less."
- Except the mortgage is directly related to the value of the home - the bond is not
- Except the mortgage on my home is likely different than the mortgage on my neighbor's - the bond is the same
- Except principal on the mortgage can be paid early - principal on the bond cannot
- Except the mortgage must be satisfied for the home to change hands - the bond does not
- Except I can refinance the mortgage to obtain a better rate - I have no ability to refinance the bond
- Except I can itemize interest paid on the mortgage - I cannot itemize interest paid on the bond

Perhaps you meant to say, "It's a mortgage with a different name... except when it isn't"

There are different ways to think about the bond and some are more correct than others.

So they are the same thing only different? :)

Does a bond impact your credit score?

[biker1]

I don't believe you can accelerate bond payments. In other words, I don't believe you can make extra payments towards the principal. You can payoff the entire bond whenever you wish but there is a cutoff date to avoid the bond payment on your November tax bill.

The question you are asking is better rephrased as,

“What’s the total balance left on the Bond on a particular home?”

At the start bonds can be hefty. $20-$40k

Over time that’s paid off just like your mortgage at whatever interest rate was assigned at the time.

No bond means it has been paid off and a zero balance remains.

It’s important to know the balance (if any) on the bond remaining in a home you are interested in. Otherwise you could be in for an unpleasant surprise at the total monthly mortgage/bond you have to fork out.

Each home is unique in amount of their bond balance. Some owners accelerate bond payments or even pay it off early to make the home more attractive when selling it.

So ask

[Normal]

So it all boils down to:

Be aware of increased maintenance and upgrade desires if you buy an older house. Those can way outweigh those bond prices on a brand new home.

Be aware of bond payments if you buy a newer house. They can exceed 40 K.

The commission driven salesman/realtors that solely uses the pitch, “There’s no bond” for their pitch can be naive of so many other factors that their light heads could carry them away.

[BrianL99]

Let me type this more slowly this time:

....

"It's a mortgage with a different name, folks. Nothing more, nothing less."


- Except the mortgage is directly related to the value of the home - the bond is not
- Except the mortgage on my home is likely different than the mortgage on my neighbor's - the bond is the same
- Except principal on the mortgage can be paid early - principal on the bond cannot
- Except the mortgage must be satisfied for the home to change hands - the bond does not
- Except I can refinance the mortgage to obtain a better rate - I have no ability to refinance the bond
- Except I can itemize interest paid on the mortgage - I cannot itemize interest paid on the bond

Perhaps you meant to say, "It's a mortgage with a different name... except when it isn't"

There are different ways to think about the bond and some are more correct than others.

I'm not sure it matters how fast or slow you type, if what you're typing is wrong.

The Bond is directly related to the value of your property. Not to the home, but to the lot.

Bonds are not the same for everyone. As for mortgages, you get to choose how much your mortgage is, as does your neighbor. It's not fixed by anyone but the mortgagor.

You absolutely can pre-pay the Bond.

As I've said, it differs from a Mortgage, in that it is "assumable". It does not have to be paid off to sell the property.

You absolutely can refinance your Bond, anytime you wish Call your bank and if you're credit worthy, you're good to go.

As for the deducting the interest? See above. If you opt to refinance your Bond with a 2nd Mortgage on your Primary Residence, that Interest now becomes Tax Deductible (with some limitations).

No, there are no different ways to look at a Bond. It is what it is. The Bond was a loan to the developer to build the infrastructure. When he was done and started building houses, he added up all his costs, split them between all the lots and a mechanism was set up for the buyer's to pay their share. This document explains it: VCDD Pay Off Bond (https://www.districtgov.org/howDoI/PayBond.aspx).

The bottom line is the same. If you have a BOND, you do not own your land "free & clear". You have a loan against it that is transferable. It is a debt to the land, not the person. Essentially, the Town/Collector of Taxes/Bond Holder holds an interest in that land, as shown on your Tax Bill. It is different than taxes, as taxes accrue yearly and is not a fixed amount.


(If someone wants to nit pick and talk about the difference between the Note, the Mortgage, a Lien or any general encumbrances, I get it. But to simplify the discussion, I'm lumping them all in together as "mortgage".)

[BrianL99]

....

[Bill14564]

I'm not sure it matters how fast or slow you type, if what you're typing is wrong.

Very good point.

The Bond is directly related to the value of your property. Not to the home, but to the lot.

Nope. My neighbor's property appraises for more than mine but our bond amounts and bond payments are exactly the same (or were the same before I paid mine)

Bonds are not the same for everyone. As for mortgages, you get to choose how much your mortgage is, as does your neighbor. It's not fixed by anyone but the mortgagor.

Nope. All the bonds in a particular "Unit" are exactly the same. I didn't get to choose how much my bond was and neither did my neighbors.

You absolutely can pre-pay the Bond.

Nope. You can pay the balance in full or you can pay the installment but what you CANNOT do is pay an extra $3,000 on the principal of the bond in order to lower the installment payments. I certainly CAN do that with my mortgage.

As I've said, it differs from a Mortgage, in that it is "assumable". It does not have to be paid off to sell the property.

Yep. An example of how the bond is not just a mortgage.

You absolutely can refinance your Bond, anytime you wish Call your bank and if you're credit worthy, you're good to go.

Nope. You can pay the bond in full but you cannot refinance it. Sure, you can possibly take out a home equity loan or second mortgage to obtain the funds required to pay the balance of the bond. With a "true" refinance, the same collateral used for the original loan is used for the refinanced loan but that would not be the case with a "refinance" of the bond. I guess in a sense it is a form of refinance, but this changes the nature of the loan and the need for additional collateral makes it significantly different from a typical refinance.

As for the deducting the interest? See above. If you opt to refinance your Bond with a 2nd Mortgage on your Primary Residence, that Interest now becomes Tax Deductible (with some limitations).

Well.... *Maybe* you could deduct the interest from a 2nd mortgage (limitations apply) but that is not deducting the interest from the bond, it is deducting the interest from a separate loan which might be in the same amount as the bond balance.

No, there are no different ways to look at a Bond. It is what it is. The Bond was a loan to the developer to build the infrastructure. When he was done and started building houses, he added up all his costs, split them between all the lots and a mechanism was set up for the buyer's to pay their share. This document explains it: VCDD Pay Off Bond (https://www.districtgov.org/howDoI/PayBond.aspx).

I kind of agree here except you insist it is the same as a mortgage when it clearly is not.

The bottom line is the same. If you have a BOND, you do not own your land "free & clear". You have a loan against it that is transferable. It is a debt to the land, not the person. Essentially, the Town/Collector of Taxes/Bond Holder holds an interest in that land, as shown on your Tax Bill. It is different than taxes, as taxes accrue yearly and is not a fixed amount.


(If someone wants to nit pick and talk about the difference between the Note, the Mortgage, a Lien or any general encumbrances, I get it. But to simplify the discussion, I'm lumping them all in together as "mortgage".)

And some people look at the tax bill and lump the county property tax, the school tax, the WMD tax, the fire assessment, the maintenance fee, and the bond together and refer to them as simply the "annual property tax." (see the argument over the 33% increase a few years ago) Just because they do that doesn't make it right. Just because you want to use the word "mortgage" doesn't make it the same as a mortgage.

[Ksfirefighter]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

Sellers think that if they pay off the bond then their house should be worth 30k more than one that is not.
That makes sense….. kind of.
It you buy the home and move 2 years later you only paid 2 payments of the bond and will remarket your house a little less than one that potentially has their bond paid.
My experience is get the home that you want, in the area you want, with the sun exposure you want, so you can enjoy the lanai in the afternoon, pool, no pool but you could put one in, privacy, no kissing lanai’s, golf course but not right up on the cart path. Model 10 is so much more space.
I would never offer 30k more for a house that the bond is paid, but I would for the right home, with all the right things.

[CoachKandSportsguy]

If the bond is not paid in full in advance then the remaining amount of the bond is directly related to the age of the home. One could say the numbers on a calendar have nothing to do with the age of a home, except that as the numbers get higher the home gets older. Likewise, the balance on the bond has nothing to do with the age of a home, except that as the balance gets lower the home gets older.


spurious correlation, a negative one, on the basis of time, that's all.

[Garywt]

I look at my bond as $129 a month which is built into my escrow account with my mortgage. I don’t see it or feel it. I just pay my mortgage each month and the bank takes care of the rest. So in my case a paid bond would save you $129 a month.

[manaboutown]

I'm not sure it matters how fast or slow you type, if what you're typing is wrong.

The Bond is directly related to the value of your property. Not to the home, but to the lot.

Bonds are not the same for everyone. As for mortgages, you get to choose how much your mortgage is, as does your neighbor. It's not fixed by anyone but the mortgagor.

You absolutely can pre-pay the Bond.

As I've said, it differs from a Mortgage, in that it is "assumable". It does not have to be paid off to sell the property.

You absolutely can refinance your Bond, anytime you wish Call your bank and if you're credit worthy, you're good to go.

As for the deducting the interest? See above. If you opt to refinance your Bond with a 2nd Mortgage on your Primary Residence, that Interest now becomes Tax Deductible (with some limitations).

No, there are no different ways to look at a Bond. It is what it is. The Bond was a loan to the developer to build the infrastructure. When he was done and started building houses, he added up all his costs, split them between all the lots and a mechanism was set up for the buyer's to pay their share. This document explains it: VCDD Pay Off Bond (https://www.districtgov.org/howDoI/PayBond.aspx).

The bottom line is the same. If you have a BOND, you do not own your land "free & clear". You have a loan against it that is transferable. It is a debt to the land, not the person. Essentially, the Town/Collector of Taxes/Bond Holder holds an interest in that land, as shown on your Tax Bill. It is different than taxes, as taxes accrue yearly and is not a fixed amount.


(If someone wants to nit pick and talk about the difference between the Note, the Mortgage, a Lien or any general encumbrances, I get it. But to simplify the discussion, I'm lumping them all in together as "mortgage".)

Disinformation. A bond is debt on the property but it is NOT a mortgage.

[BrianL99]

Disinformation. A bond is debt on the property but it is NOT a mortgage.

Just stop paying it and see what happens.

Now I'm beginning to understand how The Villages has been able to convince 160,000 retired old people, to move to former swampland in the middle of no where.

It's amazing their marketing folks could convince so many people, that a $50,000 lien against their property, which will ultimately cost over $100,000 to pay off monthly, isn't real money.

[BrianL99]

....

[retiredguy123]

Just stop paying it and see what happens.
As I understand it, they can foreclose on the property, but they cannot sue you for other assets that you own, like they can with a mortgage. That is because the bond is not a personal debt.

[Laker14]

I'm not sure I buy the argument that if you buy a house that is old enough to have the bond paid off you are going to pay more for maintenance. It is quite possible that the house with the bond paid off has already gone through the stage of life when the HVAC, roof, and water heater, as well as the kitchen appliances, have been replaced.

Perhaps, more than once.

Also, it is not unusual for the home to have been modernized decoratively. More than once.

[Altavia]

Just stop paying it and see what happens.



So what happens if you stop paying your bond?

[Altavia]

Disinformation. A bond is debt on the property but it is NOT a mortgage.

Exactly but somebody is not comprehending well...

With a loan, the bank or other creditor takes title of the debtor's property,

You can't sell the home until paying the loan.

A mortgage impacts your score/credit history.

A bond is a debt against the property. But you can sell the property without paying the bond, because it is against the property and carrys over with the sale.

A bond has no impact on your credit history.

[biker1]

It is pretty hard to specifically not pay the bond. If you have a mortgage, your mortgage payment includes funds to escrow for county and school property taxes, bond payment, CDD maintenance fee, and the fire fee. These are all items on your November tax bill that your mortgage company pays for you from escrow. Are you planning on reducing your mortgage payment by the amount of the bond payment and then tell your mortgage company to reduce your November tax bill payment by that amount? If you don't have a mortgage, you receive the November tax bill and are responsible for paying it yourself. Are you going to reduce how much you pay by the bond payment? Essentially, if you don't make your full mortgage payment then you will be hearing from your mortgage company. If you don't make the full November tax bill then you will be hearing from the County. Eventually, you won't be living in the house.

So what happens if you stop paying your bond?

[Topspinmo]

In theory the price of the home where the bond is paid off should be higher than a home still has a bond. In actuality my realtor advised me not to pay off the bond as the resale values seldom reflect the full value of the bond payoff


So you like paying interest. Most of us don’t.

[Topspinmo]

////

[Topspinmo]

Did you see the FSBO currently being advertised on TOTV? Price "reduced" to $349K. But, Zillow says it's only worth $321K, and it sold 2.5 years ago for $222K. The house is 24 years old.

FSBO want to cut out realtors fees 6% or more so they are willing to take less than suggested estimate or want price.

Some just want out. So what does that say about your house with bond? Zillow just guess not actual selling price. Sometime they are close either way.

Zillow says my CYV worth 339K I paid 215K 9 years ago

[CoachKandSportsguy]

Thank you. I love being right.

We all know that, its obvious. . .


Now please go over to the thread on CDD Bonds. You're a former finance guy. Please explain to the masses, that CDD Bonds are nothing more than mortgages, with a different name and they only relate to land and not homes.

(Once you explain that, then you can move on to how Bond prices fall, when Interest rates rise.):a20:

CDD bonds are not quite mortgages, but from a payer's point of view, the bond looks like or behaves like a mortgage with amortization identical to a mortgage, the payment concept is the same as a mortgage, and a lien against the property with the ability to foreclose against the property, like a mortgage.

A mortgage is a legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property. The bond holders do not hold title to the property, and do not lend you the money.

Its really a property improvement assessment fee, funded by a bond, creating a lien on the land. Same as an HOA special assessment fee for an HOA project to improve the entire HOA community after borrowing money. The HOA special assessment in an HOA would be passed to the next owner, but its generally not part of the HOA fee, which is a permanent lease payment on the land.

Special Assessment Tax: A Definition | Rocket Mortgage (https://www.rocketmortgage.com/learn/special-assessment-tax)

In my intuition, TV bonds are not tax deductible because the bond was created by a private entity and not a governmental entity. Would that amount based on the technicality be flagged by the IRS? very, very doubtful in my opinion. Besides, the IRS tends to go after not reporting all your income properly, and less about the expenses, especially with the current personal exemption.

From a finance operational point of view, the bond holders, who lent the money to the villages, expect an interest payment at regular intervals. When a home owner pays off the bond prematurely, the monies go into a fund to keep the principal and generate interest to replace the expected annual payment and fund the future interest rate payments and the bond repayment at the end of the life of the bond. When current interest rates are way below the bond interest rate, the prepayment can cause future payment shortfalls, whereas when current interest rates are above the bond rate, the prepayment holding fund can generate excess interest. . .

This explanation is the way I, as a finance guy and fill out three or four tax returns each year, think about the role and relationship of the TV bond. It may not work for other people. . . or anyone else.

good luck.

[Altavia]

So you like paying interest. Most of us don’t.

Do you like earning interest?

If you had a 3% mortgage today, would you pay it off?

Unless you kept that bond money under a mattress, you'd earn more interest investing it.

[Altavia]

...


This explanation is the way I, as a finance guy and fill out three or four tax returns each year, think about the role and relationship of the TV bond. It may not work for other people. . . or anyone else.

good luck.

Very informative, thanks!

[Altavia]

It is pretty hard to specifically not pay the bond. If you have a mortgage, your mortgage payment includes funds to escrow for county and school property taxes, bond payment, CDD maintenance fee, and the fire fee. These are all items on your November tax bill that your mortgage company pays for you from escrow. Are you planning on reducing your mortgage payment by the amount of the bond payment and then tell your mortgage company to reduce your November tax bill payment by that amount? If you don't have a mortgage, you receive the November tax bill and are responsible for paying it yourself. Are you going to reduce how much you pay by the bond payment? Essentially, if you don't make your full mortgage payment then you will be hearing from your mortgage company. If you don't make the full November tax bill then you will be hearing from the County. Eventually, you won't be living in the house.

Exactly, was replying to the "... What happens if you don't pay (just) your bond payment question."

The answer is you can't

You can stop paying your mortgage.

I like CoachKandSportsguy's perspective that "Its really a property improvement assessment fee, funded by a bond, creating a lien on the land."

[Bill14564]

Do you like earning interest?

If you had a 3% mortgage today, would you pay it off?

Unless you kept that bond money under a mattress, you'd earn more interest investing it.

As I asked another poster, what would your calculation have been over the past five years when CD rates were below 3% or in the past few years when market returns were at or below zero? Today, investing the money rather than paying off the bond makes sense. Yesterday not so much and tomorrow is anybody's guess.

Also, don't forget to include the admin fee in the calculation of effective interest rate.

[retiredguy123]

I'm not sure I buy the argument that if you buy a house that is old enough to have the bond paid off you are going to pay more for maintenance. It is quite possible that the house with the bond paid off has already gone through the stage of life when the HVAC, roof, and water heater, as well as the kitchen appliances, have been replaced.

Perhaps, more than once.

Also, it is not unusual for the home to have been modernized decoratively. More than once.
You may find some pre-owned houses like that, but my experience has been the opposite. Most older pre-owned houses I have viewed have not been well maintained or updated.

[Altavia]

As I asked another poster, what would your calculation have been over the past five years when CD rates were below 3% or in the past few years when market returns were at or below zero? Today, investing the money rather than paying off the bond makes sense. Yesterday not so much and tomorrow is anybody's guess.

Also, don't forget to include the admin fee in the calculation of effective interest rate.

In that case, the effective rate would be the difference between bond interest and CD interest. If the bond was 5%? and the CD 3%, the bond is costing you 2%. And it's not that hard to earn more that CD rates on investments at low risk.

Paying off the bond has high risk you will not recover that money when you sell.

[Topspinmo]

We all know that, its obvious. . .



CDD bonds are not quite mortgages, but from a payer's point of view, the bond looks like or behaves like a mortgage with amortization identical to a mortgage, the payment concept is the same as a mortgage, and a lien against the property with the ability to foreclose against the property, like a mortgage.

A mortgage is a legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property. The bond holders do not hold title to the property, and do not lend you the money.

Its really a property improvement assessment fee, funded by a bond, creating a lien on the land. Same as an HOA special assessment fee for an HOA project to improve the entire HOA community after borrowing money. The HOA special assessment in an HOA would be passed to the next owner, but its generally not part of the HOA fee, which is a permanent lease payment on the land.

Special Assessment Tax: A Definition | Rocket Mortgage (https://www.rocketmortgage.com/learn/special-assessment-tax)

In my intuition, TV bonds are not tax deductible because the bond was created by a private entity and not a governmental entity. Would that amount based on the technicality be flagged by the IRS? very, very doubtful in my opinion. Besides, the IRS tends to go after not reporting all your income properly, and less about the expenses, especially with the current personal exemption.

From a finance operational point of view, the bond holders, who lent the money to the villages, expect an interest payment at regular intervals. When a home owner pays off the bond prematurely, the monies go into a fund to keep the principal and generate interest to replace the expected annual payment and fund the future interest rate payments and the bond repayment at the end of the life of the bond. When current interest rates are way below the bond interest rate, the prepayment can cause future payment shortfalls, whereas when current interest rates are above the bond rate, the prepayment holding fund can generate excess interest. . .

This explanation is the way I, as a finance guy and fill out three or four tax returns each year, think about the role and relationship of the TV bond. It may not work for other people. . . or anyone else.

good luck.

Either way it’s still debt you are responsible for till you sell the house or pay it off.

[Topspinmo]

You may find some pre-owned houses like that, but my experience has been the opposite. Most older pre-owned houses I have viewed have not been well maintained or updated.


When I looked I found most have been. Just cause you brought new don’t mean you won’t have same problems few year into it.

[BrianL99]

We all know that, its obvious. . .



CDD bonds are not quite mortgages, but from a payer's point of view, the bond looks like or behaves like a mortgage with amortization identical to a mortgage, the payment concept is the same as a mortgage, and a lien against the property with the ability to foreclose against the property, like a mortgage.

A mortgage is a legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property. The bond holders do not hold title to the property, and do not lend you the money.


good luck.


Thank you, I agree with you 90%.

You are correct, in that the "lender" does not have equitable title to the property, as they typically would with a mortgage. That said, property ownership rights are different in different states and not all mortgages grant equitable rights.

In the case of a Bond, the Lender did indeed lend money to the property owner. At the time, that owner was the Developer. The Developer then arranged for that loan to be assumed proportionally by the next owner (first home buyer), who could then pass it on to subsequent buyers.

Good language. It generally behaves as a mortgage, with some idiosyncrasies (ability to assume, inability to prepay a portion of principal, no personal note attached, no direct refinancing available).

If a home sells for $400,000 + a $40,000 Bond Debt, the home really sold for $440,00.

Or you could say, it sold for $400,000 + yearly "land rental fee", similar to renting a site at a Mobile Home Park.

In either characterization, it's not like having Fee Simple Title, free and clear of all liens & encumbrances.


I don't often agree with CoachKandSportsguy, but he's got a way better grasp on this situation, than most everyone else.

[Topspinmo]

Do you like earning interest?

If you had a 3% mortgage today, would you pay it off?

Unless you kept that bond money under a mattress, you'd earn more interest investing it.

Yes I like earning Interest, not paying. Especially when it does little to reduce principal.

[Normal]

It’s all on the builder. Bonds are high because the builder freeloads off the county. If The Developer paid impact fees in line with the rest of the state, this discussion would be moot. Average impact fees in the state of Florida for 2023 were about 27,000, but not for our Developer.

[Laker14]

You may find some pre-owned houses like that, but my experience has been the opposite. Most older pre-owned houses I have viewed have not been well maintained or updated.

Well, you don't buy those. You buy the good ones.
And the bigger point was that just because the house still has a bond, that doesn't mean the parts that are going to wear out aren't well on their way to doing so.

What is the term of the bond? 20 years? 30 years?
How long do the HVAC, or the roof, or the kitchen appliances last?
How long is it before the cabinets and counters, and other decorative features become dated?

[BrianL99]

It’s all on the builder. Bonds are high because the builder freeloads off the county. If The Developer paid impact fees in line with the rest of the state, this discussion would be moot. Average impact fees in the state of Florida for 2023 were about 27,000, but not for our Developer.

Without CDD Bonds, The Villages would not exist ... nor would Lakewood Ranch.

CDD's were created by the Florida Legislature, to promote the development of land that was unlikely to be developed without incentives (the use has expanded in the last 15-20 years). It's a lot like electric cars. No one wants to buy them without government incentives and no one would have ever moved to The Villages, unless the government provided a way to subsidize the development and construction.

It's also a way for homes to appear to be priced for less than they really are ... you're not paying all the land cost up front.

Impact Fees and CDD Bonds, are apples & oranges. The average per home cost of Impact Fees in Florida, is slightly under $10,000/unit.

[kansasr]

Without CDD Bonds, The Villages would not exist ... nor would Lakewood Ranch.

CDD's were created by the Florida Legislature, to promote the development of land that was unlikely to be developed without incentives (the use has expanded in the last 15-20 years). It's a lot like electric cars. No one wants to buy them without government incentives and no one would have ever moved to The Villages, unless the government provided a way to subsidize the development and construction.

It's also a way for homes to appear to be priced for less than they really are ... you're not paying all the land cost up front.

Impact Fees and CDD Bonds, are apples & oranges. The average per home cost of Impact Fees in Florida, is slightly under $10,000/unit.

And for the Developer in Sumter County it's only $972 in The Villages.

Road Impact Fee Schedules | Sumter County, FL - Official Website (https://www.sumtercountyfl.gov/672/Road-Impact-Fees)

[Normal]

And for the Developer in Sumter County it's only $972 in The Villages.

Road Impact Fee Schedules | Sumter County, FL - Official Website (https://www.sumtercountyfl.gov/672/Road-Impact-Fees)

Yes, we could cherry pick like B.i.n.9 does or get down to the brass tacks, the Developer throws the impact fee on everyone but himself!

[GoRedSox!]

Yes, we could cherry pick like B.i.n.9 does or get down to the brass tacks, the Developer throws the impact fee on everyone but himself!This is one of the most successful and visionary developers in the history of development. They created everything and it's quite something what it has become and what it's going to continue to be. I know the developer takes criticism on this site from time to time, but quite honestly, they have created a beautiful retirement community here and the people are happier generally than any place I've been.

[Normal]

This is one of the most successful and visionary developers in the history of development. They created everything and it's quite something what it has become and what it's going to continue to be. I know the developer takes criticism on this site from time to time, but quite honestly, they have created a beautiful retirement community here and the people are happier generally than any place I've been.

Not criticizing, just stating the facts. You shouldn’t take objectivity so personally. It was smart to go to Webster and DeSantis to have the laws written for business profits. Who can argue that paying less than 1000 dollars in impact fees per house isn’t shrewd? I have nothing against The Developer or living here. Besides, the employees love this time of year with the bonuses and end of year Christmas party. Just don’t drink only The Villages cool aide. Stick to a balanced diet.

The plus side is there was someone to pick up the pieces of so many developments that were opened, but lacked closure plans. Yes, some of it was competitive in nature, but things got done. The Villages did that very well!

[Altavia]

This is one of the most successful and visionary developers in the history of development. They created everything and it's quite something what it has become and what it's going to continue to be. I know the developer takes criticism on this site from time to time, but quite honestly, they have created a beautiful retirement community here and the people are happier generally than any place I've been.

And thanks to the development, Sumter County has maintained the lowest tax rate in the region. Largely due to adding 2-3 billion dollars of incremental residential homes to the tax base.

At the end of the day, the buyers pay no matter how you slice the cake.

[CoachKandSportsguy]

In the case of a Bond, the Lender did indeed lend money to the property owner. At the time, that owner was the Developer. The Developer then arranged for that loan to be assumed proportionally by the next owner (first home buyer), who could then pass it on to subsequent buyers.

I don't often agree with CoachKandSportsguy, but he's got a way better grasp on this situation, than most everyone else.

True on who the bond holders lended the money initially.

Thank you on the compliment. . I try to keep it simple so I can understand it.

[Altavia]

Impact Fees and CDD Bonds, are apples & oranges. The average per home cost of Impact Fees in Florida, is slightly under $10,000/unit.

Maybe I'm missing something but it looks like other than regional roads, most of the things on the impact fee schedule are initially paid for by the developer and bonds? Including the schools.

[Papa_lecki]

It’s all on the builder. Bonds are high because the builder freeloads off the county. If The Developer paid impact fees in line with the rest of the state, this discussion would be moot. Average impact fees in the state of Florida for 2023 were about 27,000, but not for our Developer.

If the developer paid higher impact this discussion would be moot

The developer would roll the impact fees into the price of the house and our houses would be $40,000 higher - we would be paying for the fees in our mortgage.

[BrianL99]

Maybe I'm missing something but it looks like other than regional roads, most of the things on the impact fee schedule are initially paid for by the developer and bonds? Including the schools.

That is mostly correct.

There's a big giant leap from "cost of infrastructure" to "impact fees".

In simple terms, the CDD Bonds fund the new infrastructure and the Impact Fees cushion the blow on the existing infrastructure. That's a gross simplification, but that's the general theory.

[Linda Spille]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

Just go to the county website and pull up the Tax bill. Look at the Non-Ad Volorem assessment.
If the bond is paid it will be $0. If they still have a bond on them, you can see the amount still owed.

[Robnlaura]

its really a hoa fee in disguise.. o plus you expected to pay a fee to use the facilities you actually, paid to build.. So bond cost plus $189.. + $165 you get nothing for free is the real answer..

[Papa_lecki]

its really a hoa fee in disguise.. o plus you expected to pay a fee to use the facilities you actually, paid to build.. So bond cost plus $189.. + $165 you get nothing for free is the real answer..

Are you saying the bond is an HOA fee in disguise?

I don’t think anything could be further from the truth.
Stop trying to say there’s an HOA fee in the Villages - there’s not

[Topspinmo]

Are you saying the bond is an HOA fee in disguise?

I don’t think anything could be further from the truth.
Stop trying to say there’s an HOA fee in the Villages - there’s not


Fee is fee no matter what you call it.

[BrianL99]

its really a hoa fee in disguise.. o plus you expected to pay a fee to use the facilities you actually, paid to build.. So bond cost plus $189.. + $165 you get nothing for free is the real answer..

That's ridiculous.

If you didn't have a Bond to pay, because the Developer paid for the infrastructure out of pocket, he just would have added it to the home cost.


Building roads, drainage, water supplies, etc., aren't free.

[Twindham]

Note that you don't have to work with an "assigned" agent. You can fire the agent and select whatever agent you want to work with. Do a little research and find an experienced agent who you like and ask them to show you some houses.

Chris Hallmark is one of the most experienced and best agents who works for The Villages. If you call him, I am sure that he will show you any of The Villages houses and answer any questions you have.
Just a small caution about firing the first assigned agent. We fired our first Villages agent and found another Villages agent. When he found the house we liked and purchased, the commission was split between the two Villages agents. So, it's possible the first agent could still get some commission even though they didn't close the deal.

[retiredguy123]

Just a small caution about firing the first assigned agent. We fired our first Villages agent and found another Villages agent. When he found the house we liked and purchased, the commission was split between the two Villages agents. So, it's possible the first agent could still get some commission even though they didn't close the deal.
Who cares? As a buyer, you don't pay any commission. "The Properties of the Villages" is the broker, and they can pay their agents whatever they want.

[DrMack]

Who cares? As a buyer, you don't pay any commission. "The Properties of the Villages" is the broker, and they can pay their agents whatever they want.

Doesn’t the buyer always pay the cost of the real estate sale. The price is jacked to cover the costs. If a seller wants 500k, they ask 525 k to pay the realtor. Who paid the 525k? Where do you think that extra 5% goes?

On the flip side. We have a bond we intend to pay off once all the paperwork is done. The bond insures the latest in building techniques, amenities, updates and new everything.

[biker1]

A friendly reminder. There is a cutoff date on paying the bond off in order to avoid a bond payment on your November taxes. I believe it is in the summer some time. Details can be found at districtgov.org.

Doesn’t the buyer always pay the cost of the real estate sale. The price is jacked to cover the costs. If a seller wants 500k, they ask 525 k to pay the realtor. Who paid the 525k? Where do you think that extra 5% goes?

On the flip side. We have a bond we intend to pay off once all the paperwork is done. The bond insures the latest in building techniques, amenities, updates and new everything.

[GRACEALLEMAN]

We visited the Brownwood TS to introduce ourselves and interest. But the realtor we were assigned on our first in-person visit has refused to answer one of our most basic of questions multiple times (she seems to keep copy/pasting the same answer to my very direct question).

My simple question is this: We've seen several really nice properties that promote the fact that they're "NO BOND". As if it was some huge savings or advantage. I just want to know: "What is the average real-world saving on a property with a bond vs. no-bond?"

The sales brochures shows the monthly fees as "bond+maintenance+fire" so you can't gauge what percentage each makes up.

I totally understand the concept of the bond and I totally understand why each "Villages" bond may differ in terms of price. But we're merely trying to ascertain if a property being highly-promoted as "NO BOND" is really that significant and should be given priority in our choices.

Can anybody please answer this question honestly? My assigned realtor can't or won't.

Why wouldn't you understand that? You don't want to have to pay a $10 K 20K 30K 40K bond. why is that difficult for you to understand? New homes have high bonds, older homes have no bonds duh.

[VApeople]

"What is the average real-world saving on a property with a bond vs. no-bond?"


OK, I will answer your question.

There is no "average real-world saving on a property with a bond vs. no-bond".

The savings depends on the amount of the bond and the interest rate for the bond. You can figure it out for yourself.

[BrianL99]

OK, I will answer your question.

There is no "average real-world saving on a property with a bond vs. no-bond".




The best analogy I can think of, is owning a home on land encumbered with a CDD Bond, is similar to "owning" a home in trailer park, where you pay a monthly or annual fee for the land on which the trailer is situated.

Common sense would say that's "real world savings" to most folks.

Unfortunately, when dealing with many buyers/sellers in TV (or other CDD communities), common sense is in short supply.

[Bill14564]

OK, I will answer your question.

There is no "average real-world saving on a property with a bond vs. no-bond".

The savings depends on the amount of the bond and the interest rate for the bond. You can figure it out for yourself.

Of course there is an average, it is just prohibitively difficult to calculate and not a terribly useful number. What really matters is the savings on the particular home you are interested in... which you state in the 2nd paragraph above.

[Jayhawk]

The best analogy I can think of, is owning a home on land encumbered with a CDD Bond, is similar to "owning" a home in trailer park, where you pay a monthly or annual fee for the land on which the trailer is situated.

Common sense would say that's "real world savings" to most folks.

Unfortunately, when dealing with many buyers/sellers in TV (or other CDD communities), common sense is in short supply.

CDD stands for Community Development District, an entity that develops the land, provides infrastructure and amenities, maintains the community and its amenities, and works to provide a higher standard of living for homeowners.

Not all communities have CDD fees; most typically, you will find them in communities with amenities. CDD fees are a way to offset the cost of community amenities and infrastructure development or improvement required when building new communities. CDDs help to keep the purchase price of new homes lower because of the deferred infrastructure cost.


Home Buying 101: What are CDD Fees? (https://www.highlandhomes.org/blog/blog-detail/home-buying-101-what-is-a-cdd-1019)

[Jayhawk]

https://www.talkofthevillages.com/forums/investment-talk-158/bond-payments-developers-point-view-345804/index3.html

Read the post from GoldWingNut and you will understand.

[BrianL99]

CDDs help to keep the purchase price of new homes lower because of the deferred infrastructure cost.


Home Buying 101: What are CDD Fees? (https://www.highlandhomes.org/blog/blog-detail/home-buying-101-what-is-a-cdd-1019)

That is the most important sentence that's shown up on most any post regarding CDD Bonds.

It is a method to finance infrastructure, that makes the home prices appear to be lower than they really are. Your buying the home and a portion of the land & financing the rest of the land.

[BrianL99]

https://www.talkofthevillages.com/forums/investment-talk-158/bond-payments-developers-point-view-345804/index3.html

Read the post from GoldWingNut and you will understand.

If you would like an unbiased education on Bonds, you should get it from someone who really understand them, like the FMS site.


Why CDDs? - FMSbonds.com (https://www.fmsbonds.com/news-and-perspectives/why-cdds/)

[4$ALE]

If you would like an unbiased education on Bonds, you should get it from someone who really understand them, like the FMS site.


Why CDDs? - FMSbonds.com (https://www.fmsbonds.com/news-and-perspectives/why-cdds/)

I think if I'm going to get an education from a nut..... it will be GoldWingNut. I also noticed your link is more than 13 years old. :blahblahblah::blahblahblah::blahblahblah:

[BrianL99]

I think if I'm going to get an education from a nut..... it will be GoldWingNut. I also noticed your link is more than 13 years old. :blahblahblah::blahblahblah::blahblahblah:

Suit yourself.

If I had an opportunity to take a golf lesson from Butch Harmon, rather than some kid on a local driving range, I'd opt for Harmon. You're entitled to your opinion.

[Robnlaura]

That's ridiculous.

If you didn't have a Bond to pay, because the Developer paid for the infrastructure out of pocket, he just would have added it to the home cost.


Building roads, drainage, water supplies, etc., aren't free.

So there you go you got your HOA you just feel better because they didn’t call it a HOA fee .. funny comment though