[Challenger]

Originally Posted by VillagerNut

Please feel free to contact any appraiser that you would like to contact here in the area. You will find that no appraiser will take into account that a bond is paid off or has a $50,000 bond. It is part of the tax bill so it has no part in an appraisal. Do buyers look at the fact that a bond is paid off versus a higher bond? Absolutely! But location, what is behind the house like another house or privacy, where the interior walls are at & the list price should normally be the biggest factors when purchasing a home here. When it should come in the play is if you are down to three homes and you cannot decide which one to purchase then you may look at the remaining Bond balance to decide. But overall the person that asked about a $300,000 home, the easiest way to think about it is the newer the House, the higher the CDD bond and the CDD maintenance amounts on your tax bill. Plus sometimes you will find homes where the folks have paid the bond off. Yes our real estate market is extremely different than any other market in the United States. It is up to the owner of the house to decide when or if to pay off the bond!

The fact is that the remaining Bond is , if fact, a part of the total consideration paid for the house. It is not a tax. It is a lien on the home. If you have a choice between two identical units each priced at $200,000, and one with a remaining bond of $10,000, the total purchase price of the unit with the bond is, in fact $10,000 more. The decision to or not to pay off the Bond is a separate and unrelated consideration. Too many buyers in TV are confused or misled on this issue (IMHO)

[biker1]

If someone is considering two homes, one with and one without a bond, and they are initiating a mortgage, then the comparison is easy. Compare the monthly payments and add in the monthly cost of the bond to the house with the bond remaining. Most people look at the price of the home when they should be looking at the monthly costs. If you are paying cash for the house then the comparison may be a bit different.

Originally Posted by Challenger

If this this is the case they are violating all the principals of appraisal regulating bodies. The bond is part of total consideration for the house. Should also be included in determining the total consideration for comps. This premise is very strange. I suspect real estate professionals love it as it mis states the purchase price so that bond homes seem to be a better buy and therefore easier to sell. Someone !statistical evidence ---please.

[Challenger]

Originally Posted by biker1

If someone is considering two homes, one with and one without a bond, and they are initiating a mortgage, then the comparison is easy. Compare the monthly payments and add in the monthly cost of the bond to the house with the bond remaining. Most people look at the price of the home when they should be looking at the monthly costs. If you are paying cash for the house then the comparison may be a bit different.

Agreed- but the total price is still the aggregate of the purchase price and the assumption of any remaining outstanding liens on the property.

I have found that many of the "professionals" selling RE in TV, even those employed by the developer often misstate the facts relating to the financial significance of the "BOND"

[biker1]

Agreed.

Originally Posted by Challenger

Agreed- but the total price is still the aggregate of the purchase price and the assumption of any remaining outstanding liens on the property.

I have found that many of the "professionals" selling RE in TV, even those employed by the developer often misstate the facts relating to the financial significance of the "BOND"

[pauld315]

I, as a buyer, always consider the bond. I prefer looking at homes with no bond or a very small bond (less than 2000)

[rustyp]

What a bunch of non sense. What's my house worth with or without a bond? Go to a car dealer and see what's the first question they ask. Do you have a trade in? Ever wonder why they ask that question? When I was buying a house it took about 30 seconds for me to figure out identical houses differed in price by the amount of today's bond payout amount.

[twoplanekid]

It’s interesting that when you finance, the bond is not included in the appraised value of the house. So, the approved loan amount from the bank and the monthly payments don’t include a bond payment. With bank help you pay the owner/developer the purchase price and then are automatically approved or somehow assumed to be a good risk to pay off the bond. Does anyone else know of a similar bond situation in another location in the US that is treated in this manner?

[Bogie Shooter]

Why does it really matter?

[Challenger]

Originally Posted by twoplanekid

It�s interesting that when you finance, the bond is not included in the appraised value of the house. So, the approved loan amount from the bank and the monthly payments don�t include a bond payment. With bank help you pay the owner/developer the purchase price and then are automatically approved or somehow assumed to be a good risk to pay off the bond. Does anyone else know of a similar bond situation in another location in the US that is treated in this manner?

The bond is a superior lien against the house. It has nothing to do with the value of the property. An appraisal values the property without regard to this lien. The value is the value with or without the bond.
The cost of the property ,on the other hand, is the purchase price paid plus the total of outstanding and unpaid liens , in these cases the Bond.

Total consideration for a house with$200,000 price and a $10,00 bond is $210,000 without regard to the appraised value.
Since the Bond debt runs with the property , there is no approval process needed. In priority it is superior to the mortgage debt.

[willbush]

We noticed most payments early on was on interest so we paid ours off as we don't plan to move and are very happy not paying someone interest.

[biker1]

I checked our amortization schedule. Here are some details at 10 years:

Original Bond Amt: $23,483
Balance After 10 years: $19,042
Payments for 10 years: $16,167
Principle Paid after 10 years: $4,441
Administrative Charges paid after 10 years: $970
Interest paid after 10 years: $10,756

Originally Posted by willbush

We noticed most payments early on was on interest so we paid ours off as we don't plan to move and are very happy not paying someone interest.

[OhioBuckeye]

If I've got this figured right, I've paid on my bond now for 5 yrs. & I still owe for 25 more yrs. I pay $2,000. a yr. on my bond, so that means I still owe $50,000. To pay that off a lot of people just don't have that kind of money lying around. Also to pay your bond off all at once would mean to me your house would be worth $50,000. more than you paid for it. So if you sell it, that would be great for the buyer but a loss for you. Am I thinking right?

[biker1]

Not exactly. If you pay off your bond you will only pay off the remaining principle. Your $50K number includes principle, interest, and an administrative fee for the remaining 25 years.

Originally Posted by OhioBuckeye

If I've got this figured right, I've paid on my bond now for 5 yrs. & I still owe for 25 more yrs. I pay $2,000. a yr. on my bond, so that means I still owe $50,000. To pay that off a lot of people just don't have that kind of money lying around. Also to pay your bond off all at once would mean to me your house would be worth $50,000. more than you paid for it. So if you sell it, that would be great for the buyer but a loss for you. Am I thinking right?

[Sandtrap328]

Originally Posted by OhioBuckeye

If I've got this figured right, I've paid on my bond now for 5 yrs. & I still owe for 25 more yrs. I pay $2,000. a yr. on my bond, so that means I still owe $50,000. To pay that off a lot of people just don't have that kind of money lying around. Also to pay your bond off all at once would mean to me your house would be worth $50,000. more than you paid for it. So if you sell it, that would be great for the buyer but a loss for you. Am I thinking right?

One technique some people down here use is to take out a home equity loan for the amount of their bond. They pay off the bond. The interest on the home equity loan is tax deductble - at this time - but that could change. The interest is also lower on a home equity loan.

[OhioBuckeye]

Originally Posted by biker1

Not exactly. If you pay off your bond you will only pay off the remaining principle. Your $50K number includes principle, interest, and an administrative fee for the remaining 25 years.

biker1, wait you lost me. What principle & what interest are you talking about. My home is paid for. I thought Bond was for Village up keep. Not saying you're wrong, but to me that's just another way for the Villages to get extra money from you from each person for 30 yrs. Anyway you look at it it's extra money out of our pockets & into there's. Sorry if I don't quite understand it but it just doesn't seem right that we keep paying The Villages a pay check every year. But thanks for explaining it!