[bilcon]

Originally Posted by ROCKETMAN

Talking to a sales agent told me bonds on patio villas are over $40,000. Can anyone verify that. If that’s true bonds on two and three bedroom cottage houses must be $50,000. On a different topic I walk many routes and today a cul de sac off st. Charles I saw the view 3 or 4 designer houses have in their backyards is the three story apartment complex next to sandhill golf course. I’m sure they were told when they built the villages doesn’t own that land behind your house. I

Moral of The Story. You don't buy on land facing a major roadway. Maybe there were cattle on the land when they built but.......

"I never made a mistake in my life. I thought I did once, but I was wrong."

[BrianL99]

Originally Posted by Joecooool418

Yes, I checked the District’s own published records. District 7’s April 28, 2023 town-hall presentation, on page 26, specifically states that interest savings from its bond refunding enabled the Board to fund capital projects through restricted reserves. It identifies the Colony Boulevard resurfacing project in FY2022–23 as an example, reducing District 7’s Project Wide allocation by $131,480. You can read the presentation here: https://www.districtgov.org/images/D...ll.pdf#page=26

Other districts’ published capital improvement plans also identify restricted capital funds associated with their refunding bond issues. District 5’s FY2024–25 plan budgeted $565,523 from Restricted Capital Phase I for the D5-17 pipe repair. District 8’s FY2025–30 plan allocates approximately $1.75 million for future infrastructure work from restricted capital accounts labeled for its 2018 and 2020 refunding issues. Those documents are available here: https://www.districtgov.org/wp-conte...ive.pdf#page=2 and https://www.districtgov.org/wp-conte...-26.pdf#page=2

That's interesting and way over my head. I did ask our Bond Counsel and was told that a refunding bond could not be used that way. I'm going to send him what you posted and see what he says. Thank you.

[BrianL99]

Originally Posted by Joecooool418

Yes, I checked the District’s own published records. District 7’s April 28, 2023 town-hall presentation, on page 26, specifically states that interest savings from its bond refunding enabled the Board to fund capital projects through restricted reserves. It identifies the Colony Boulevard resurfacing project in FY2022–23 as an example, reducing District 7’s Project Wide allocation by $131,480. You can read the presentation here: https://www.districtgov.org/images/D...ll.pdf#page=26

Other districts’ published capital improvement plans also identify restricted capital funds associated with their refunding bond issues. District 5’s FY2024–25 plan budgeted $565,523 from Restricted Capital Phase I for the D5-17 pipe repair. District 8’s FY2025–30 plan allocates approximately $1.75 million for future infrastructure work from restricted capital accounts labeled for its 2018 and 2020 refunding issues. Those documents are available here: https://www.districtgov.org/wp-conte...ive.pdf#page=2 and https://www.districtgov.org/wp-conte...-26.pdf#page=2

Originally Posted by BrianL99

That's interesting and way over my head. I did ask our Bond Counsel and was told that a refunding bond could not be used that way. I'm going to send him what you posted and see what he says. Thank you.

Instead of calling and prevailing upon one of our consultants for free information, I asked Gemini. I think Gemini did a good job of simplifying why what the CDD did, was legitimate. I read the 10 pages I got, but insisted Gemini reduce it to 1 page (attached for your reading pleasure).

[merrymini]

I would like to know how a buyer knows which part of the listing price of a house is the bond?

[BrianL99]

Originally Posted by merrymini

I would like to know how a buyer knows which part of the listing price of a house is the bond?

That's the quirk. You can advertise a home, without including the Bond in the price.

I don't even think you have to disclose there's a Bond involved. It obvious gets disclosed in your documents.

[merrymini]

Actually, I asked the question in a mistaken manner. I meant that, if the bond was paid off, how would a buyer know what part of a listing price shows the bond value. They would have no idea.

[Altavia]

Originally Posted by merrymini

Actually, I asked the question in a mistaken manner. I meant that, if the bond was paid off, how would a buyer know what part of a listing price shows the bond value. They would have no idea.

The remaining bond is not part of the sale price.

It's more like a property tax and is in fact paid annually at the same times the property tax.

[OrangeBlossomBaby]

Originally Posted by merrymini

Actually, I asked the question in a mistaken manner. I meant that, if the bond was paid off, how would a buyer know what part of a listing price shows the bond value. They would have no idea.

If the bond was paid off, then the listing price's bond value would be $0. Because - the bond was paid off.

[Jayhawk]

Originally Posted by retiredguy123

I As a buyer, I would be happy to buy a house with a paid off bond, but my purchase offer would certainly not include the total value of the paid off amount.

Then you may not win the house. And if you're like most sellers, you would 100% expect to recoup your bond investment if you thought you could.

[Jayhawk]

Originally Posted by OrangeBlossomBaby

If the bond was paid off, then the listing price's bond value would be $0. Because - the bond was paid off.

But there is value in a property with no bond, and most buyers will agree. Astute buyers realize a bond is part of the purchase price, and if that obligation is paid off, the result is a more valuable property. Deny it if you want, but if you understand the bond, you have to know that's true.

[Jayhawk]

Originally Posted by Altavia

The remaining bond is not part of the sale price.

It's more like a property tax and is in fact paid annually at the same times the property tax.

It IS a part of the sales price; it's just not reflected that way on a closing statement. The rest of the new home industry in MOST states includes bond costs (infrastructure) in the total purchase price, and it's not broken out, but the builders are not eating that cost.

[Jayhawk]

Originally Posted by BrianL99

That's the quirk. You can advertise a home, without including the Bond in the price.

I don't even think you have to disclose there's a Bond involved. It obvious gets disclosed in your documents.

And if you have a paid-off bond, you would be foolish NOT to include that information in your listing. Why? Because it's a huge selling point, and reasonable buyers and sellers get that.

[retiredguy123]

Originally Posted by Jayhawk

Then you may not win the house. And if you're like most sellers, you would 100% expect to recoup your bond investment if you thought you could.

The problem is that most real estate agents and buyers will not acknowledge that a paid off bond is worth the value of the house plus the money used to pay off the bond. Appraisers don't even acknowledge the added value. As a seller, you have no negotiating leverage to demand that the buyer reimburse you for the bond payoff amount. It's really not even a good selling point because, if the buyer wants a house with a paid off bond, all they need to do is to pay off the bond the day after they buy the house. And adding to the sales price increases the taxes, the transfer fee, the real estate commission, and possibly other costs of the sale. Even a swimming pool has more negotiating leverage because a new pool will take a lot of time and effort for the buyer to build a pool. The sale of a house is usually a negotiated transaction, and a paid off bond doesn't help the seller at all while negotiating the sale price. In my opinion, the seller may recover some, but not all of the bond payoff amount.

[tophcfa]

Originally Posted by Jayhawk

But there is value in a property with no bond, and most buyers will agree. Astute buyers realize a bond is part of the purchase price, and if that obligation is paid off, the result is a more valuable property. Deny it if you want, but if you understand the bond, you have to know that's true.

Agree, all else being totally equal, a property with no bond is a better deal for the buyer. When we bought our home we always added the remaining bond balance to every properties asking price we looked at to gauge the relative value between our choice of properties.

[Snakster66]

Originally Posted by tophcfa

Agree, all else being totally equal, a property with no bond is a better deal for the buyer. When we bought our home we always added the remaining bond balance to every properties asking price we looked at to gauge the relative value between our choice of properties.

Exactly, we did the same. Our view (and I assume most peple's view) was akin to this example:

Let's assume two similar houses in same village for ease of illustration.
House 1: $400K with 20K bond. Mentally, that's a 420k price
House 2: $400k with paid off bond. Mentally, that's a 400k price.

If House 2 listed at 420K because they think their paid off bond makes it "worth more", then all they have done is put themselves at the same price as house 1. Again, as a buyer, that is how I would evaluate them. A seller may disagree, but that's reality. And if the interest rate on the bond is low, then I would be more attracted to the 400k house 1 instead of the 420k house 2. Especially if that bond is over 10-15 years old and most of the interest has been paid.

Paid off bond is a tiebreaker if the asking price is the same (and I like both houses equally). But if paid off bond house has a higher asking price, it is no longer a tie and other considerations/calculations come into play.