Would the 38K bond on new homes be a deal breaker?
 

Bonds have escalated to 38K on new homes. Would this be a deal breaker on a new home purchase, or would you consider it just the cost of living in The Villages and enjoying the active lifestyle?

Bought 3 houses here the bond was never a deal breaker for us. We wanted to live here for the active life style

Wow, I had no idea they had gone that high . It seems like it would make a pre-owned home with no bond much more financially attractive, especially if it was in a central portion of The Villages.

Deal breaker for sure... we’re not looking at a $10,000. dollar bump on a home purchase here. $38,000 in addition to the price of a home and the cost of closing here, in my mind, is ridiculous. But then that’s why some people fair better in retirement. They have sound financial sense.

Is this for designer series homes? I assume in the Deluna or chitty chatty areas? Are all the new houses being built currently in the same CDD? I think I read that bonds are district specific is that correct?

DeLuna is in CDD12 and Chitty Chatty is in CDD13. The bonds are not specific to the CDD but to the subdivision (Unit #).

Adjusted for inflation the bonds have not gone up significantly over the last 20 years. Also consider in the newer areas, CDDs 12 & 13, there is a lot more green/open space than anywhere else in The Villages and the overall population density is lower. This results in longer road, more pipes, and more infrastructure in general that has to be paid for. You will pay for it one way or another, as a bond or just rolled into the price of the house the way other developers do it.

This video explains the bonds here in The Villages:

The Villages 5-30-19 Construction update and Bond information - YouTube

For me yes, 38K really The minimum, the real money in the interest.

I thought the 25% tax increase offset the developers costs?

It's the price of inflation. In January 2012 a new designer home bond was $24,000 and you could get a masonry spec designer home with tile floors, 2 car garage, stainless appliances and granite counter tops for $250K. I knew the original buyer of this home and it's about 100 yards from me, he moved to a golf course lot on Havana and sold the home two years later for $340K in 2014. It has resold 2017 for $359K.

If price is your determining factor, I would still buy a resale even though they have gone up, the bond has to be lower than $24,000 and you would be in the established Villages. This particular home is 2050 Odessa Circle in Tamarind Grove. 3-1/2 miles form LSL and 3-1/2 miles from Brownwood. Here's the home when it was listed in 2017. To give you an idea of distances, this home is 14 miles from Fenney.

2050 Odessa Cir, The Villages, FL 32162 | Zillow

Now, to give you an idea of a home that is actually on the market now. This 2012 built masonry designer home in Tamarind Grove sold new for $245K. It's now for sale for $399,900. I don't know anything about this home, other than it's for sale now.

2319 Newburn Ln, The Villages, FL 32162 | MLS #G5028653 | Zillow

https://photos.zillowstatic.com/cc_f...000000000.webp

You need to stop reading that other website.

The 25% increase had nothing to do with the developer, it was the county administration that has been mismanaging the tax money, trying to make themselves look good by lowering taxes the last 14 years so they could brag about what a good job they were doing. Instead they should have been holding the tax rate constant putting away the money for the growth and increased maintenance costs.

The developer/bonds pay for all the new roads and infrastructure for a new development. The impact fees are supposed to pay for upgrading existing county infrastructure (CR468 & CR501) to support the developments that the county approves. One has to ask what they are doing with the money.

The developer doesn't care what the impact fee is, it's just another line item in building the house and they will pass it on to the buyer, just like all taxes are. Do you really think an extra $1000 will stop the sale of any new home in The Villages, I think not.

We are in home number two and paid the bond in full for both. The bond is part of the home value to us. Paying it like a second mortgage is foolish to me. Yes, there is interest on the bond if paid over time that is higher than mortgage interest. If you can’t pay the bond off, at least add it to your home payment and pay less at the end of the note.
The Rep’s will tell you that no one pays the bond up front, but this is false. At closing on our first home, the buyer confessed to us that our home was a little high, but that our bond was paid so it became a better purchase.

Today’s bonds are approximately:
Patio Villa $19,000
Courtyard $25,000
Designer $35,000

You can find the occasional Cottage home in a Patio Villa neighborhood and pay the $19,000.

Agree!!
 

We paid off the bond 4 years ago. With an interest rate of 6 5/8%, it was a "no brainer". We have had our home for 8 years and intend on staying here as long as possible.
For new buyers, you need to add the balance of the bond to the purchase price-that is what you are REALLY paying for the home.

This post is about the Bond pricing on new homes that adds to the total price.
What about that hush hush lot premium price? I see retention pond lot premiums on the new homes south of 44 going for a crazy price of $150K give or take.
That is a far cry from the $30k I paid for a water view years back.
Are people being a little crazy to pay these prices?

At $38,000, yes a deal breaker.

It was the life style of TV that attracted us...we actually never gave much thought to the bond when we were looking at houses here. Our focus was on the right floor plan and the location. We have no mortgage, but have not paid off the bond.

I'll revisit whether to pay the bond off again. I'm just not sure that the majority of potential buyers will see an existing bond as a deal breaker on a resale. If I pay off the bond, it will drive up what my listing price is when I sell...and impact how my home competes with similar designer model houses on the market. I think location, location, location is far more of a factor than whether the bond is paid off or not. We're 3 1/2 miles from Brownwood. 3 miles from Lake Deaton Plaza and about 4 miles to LSL.

I suspect that some potential buyers of new and resale homes will be turned off due to the bond and they'll go elsewhere. I just look at it as part of the cost of buying a home in The Villages.

A friend just sold her house near CR 466. She sold it quite quickly, and said the real estate agent told her there is a big market for pre-owned homes in central Villages due to location and smaller or paid off bonds. Note - this was from an outside real estate agent, not a Villages salesperson.

I am seeing a very large premium in the villages between the 466's. I would say 10%. Most of the pre-owned homes currently for sale our North and east.

$38,000 bond plus a 25% increase in Real estate tax. Maybe the amenities are not worth it! Might want to consider a preowned home. Village real estate agents try to sell the point that the $38,000 isn’t part of the price. What a bunch of malarkey

No bonds allowed in Lake County, that why we bought where we did and love it.

Again, and again, and again. The total cost of a home purchase = Asking price + any other liens attaching to the property. End. Real Estate sales people will often try to convince you otherwise. EX . Purchase price $250,000 , bond balance $15,000 , Total price paid for home = $265,000 (Trust me). Purchase price $250,000 , no bond , total consideration (price) $250,000......

Not exactly. Your "real estate tax" has several components: the county tax, the school tax, the water management fee, the fire department fee, the maintenance fee, and, unless you have paid it off, your bond fee. The county tax went up about 25%. The other components were essentially unchanged. Since the county tax is, at worst, about 50% of your total "real estate tax", the increase in your "real estate tax" is about 12%. If you haven't paid off your bond, the percentage increase is less than that since the fixed bond payment is a substantial chunk of the total "real estate tax". This may not be true if you aren't homesteaded.

Not sure if anyone can answer this, but here goes: if you buy a property that has its bond payed off, bulldoze it and rebuild, will there be a bond slapped on it again?

My home is only 3 1/2 yrs old and we are paying 23K. That’s quite an inflation in 3 1/2 yrs.

District 13, Unit 44 has a bond of $43K.

You are mistaken, pine hills and pine ridge have bonds, both are in lake county.

No. Once the bond is paid, it’s paid.

I would buy a well located resale home and know that $38,000 would be plenty of money to make any changes and upgrades I wanted. And the house would be in a superior location.

Be sure to take into consideration that there is interest on the bond - that adds a substantial amount to the bond price.

When it comes to buying a home with a paid off bond, a lot of purchasers don’t register what a substantial difference it makes. And we know people who paid off their bond and didn’t recoup the money in the total sale price vs similar homes without the bond paid off. But, if you don't pay off the bond you are stuck paying Interest.

Regardless, I would not pay a $38000 bond to live in one of the newer areas as they are not desirable areas to me. I think the value is in other areas that have lower bonds. But it is what you want. It may be worth it to you.

All I can say is WOW!! We paid $18k 14 years ago and thought it was ridiculous. $38k, no way, wouldn't be worth it to live here. Considering the huge tax increase and reduction in the assessment to the Villages for new home infrastructure cost, the bond shouldn't go up like that. They will be pricing themselves out if business at this rate.

It appears there is some misinformation here. The bond is normally paid MONTHLY at the agreed upon interest rate over a period of typically 25 years. As noted on a previous post the interest rate was what we considered high, you can NOT deduct this off income tax (even if you itemize), so we paid it off after 4 years. My point, this is NOT an up front cost, it is an ongoing monthly cost unless you decide to pay it off. You can get a full accounting of the cost from your agent or online.
Regarding another question above, if you bulldoze the house and rebuild, NO there is no additional bond applied, the bond is to cover the infrastructure of the development.
We did not consider the bond a deal breaker, as it was just an additional monthly expense.
There have been several threads on this subject, and several people suggested getting a home equity loan to cover the bond, this will generally be at a lower interest rate, but you need to be careful if interest rates go up.
Hope this helps.

My Bond in CDD11-Unit 35 runs about $140 a month
I was going to pay it off but when you list your house most people assume there is a bond on it
So if I pay off the bond balance of $ 22,000 that doesn't really translate into me jacking up my asking price from $300 to $322

In other areas the price of the bond...would be included in the price of the home but they do not do this here.

Older homes have had bonds and they are either paid or not paid, so their cost would still reflect the bond one way or another.

I imagine the bond is up because the cost of building the infrastructure has gone up just like other like processes are more expensive now than they were some years ago.

Thanks for this info Goldwingnut.

The buyers decision about buying comes down to cash and cost, limiting pricing option
 

The question comes down to cash flow and financing, limiting pricing options. the total price of ownership includes the bond (sometimes verbally invisible), but some discussions are about cashflow, cash cost versus price. Cash flow wise, which includes the cost of money, irrespective of the total price, the home owner has the option to pay off the bond which is a much smaller chunk of the total price, which can reduce the monthly payment in total or the monthly carrying cost. The decision comes down to cash available for purchasing the property, and the future cash flow requirements, which have limitations.

Enough cash, why bother with paying the monthly cash rental fee on the bond. Not enough cash to pay off the bond without a savings or life style impact, then the cash flow and monthly cost becomes a more dominant decision point.

The point is that price and cost are two different points of view, one is the seller, price, the other is the buyer, cost, which includes cash lost or cash financing or monthly rental fee of money, including the bond..

Within the villages, new build cost = land (fixed) + build (variable) + bond (fixed). Resale = ALL negotiated price with embedded bond variable balance. The older the house, the less bond, but currently more desirable location depending upon personality and goals, and usually more negotiable, subject to one's ability to calculate and negotiate a relatively fair market value.

So, now that the purchase combinations are many, hundreds of options of new versus resale at any point in time, in deciding how to move to the villages, and the buyers cash flow ability, is usually fixed. So picking on bond as a decision point is a behavioral bias of attribution: (attributing the decision to one variable while excluding many others, such as location including view, location to amenities, cash flow, house plan, usage - homestead or snow bird, future lottery winnings :ohdear:(future income) , patience by relying on negotiation (flexibility), etc)

A reader of my posts may realize that I mention behavioral biases a lot, because they run our lives, whether people realize it or not. And people's reactions, posts and decisions all reflect their biases, part of one's personality and viewpoints, and usually limited to themselves, but projected onto others. And with money, there are many complex issues, some quantifiable, mostly behavioral.

Time to get outside!

sportsguy's crappy opinion

I would absolitely not give the Morses $38,000 more money, especially since there's no connector,barely any restaurants, and no town center. What are you getting?

ah, not true...I'm in Lake County and we have a bond

exactly my concern about paying off the bond

That is no longer true. The homes in Pine Hills and Pine Ridge have a bond. They are in Lake County.

huge increase in bond
 

Yes, a definite 'deal broker'. Look at building sites over on 466 A by Lowe's for compare. But, hey, there still is a lot of land for them to purchase on down to Orlando! cha-ching!

Bond
 

The BOND would have gone up MORE THAN 38,000 if we didn't get screwed by a 25% tax increase by county commisioners an Morse Syndicate