[KeepingItReal]

...

[Quixote]

Originally Posted by Jim 9922

No if's or but's, the unpaid bond lien must be considered part of the purchase price. If a buyer falls for the "don't worry about it" line from the agent, the buyer is not much better educated or careing about finances than the "payment-coupon-book-rich" who's refrain is; " I like it, but I don't care what it costs, just tell me what the monthly payments are." That's the dream customer for every sales person!

Also, I think once the build-out occurs and the developer focuses on resales, his agents will begin to fess-up a lot more about the true meaning of the bond. The bond is nothing more than allowing the builder to advertise a lower selling price and defer and officiate all the infrastructure costs. Florida is only one of a very few states that allow this, and it suckers in alot of out of state buyers..

How true it is! And too many buyers overlook the bond and focus only on the price of the home. See below.

Originally Posted by buggyone

Truly you should think of the price of the home is the selling price plus the bond balance.

I bought a resale home in October of 2009. The bond balance was about $2,000. Big difference than the $20,000 bond that lots of my friends got at the same time on a new home. It makes about $1,000 difference on the property tax bill every year. I would rather have that $1,000 for dinners out or other entertainment than pay it on the tax bill - but that is just me.

The bonds on new homes are now $23,000 to over $50,000. Folks, consider a resale!

The first sentence tells it like it is: The TRUE price of a home is price PLUS bond, no matter what one does with the bond. Yes, bonds on the newer homes are extraordinary contrasted with those on villages built earlier. (I don't want to say "older," as a five- or ten-year-old home is not exactly falling apart....)

And what that first sentence and the previous quote don't say completely, the last sentence finishes it off. I bought my first home in TV with the bond paid by the previous owner; the home was 2.5 years old. By two years later I figured out, just from living here, exactly what I wanted. I sold and bought a home a mile away (built the same year) that still had its bond ... of $5,000 ... which I paid off in a breath.

Had the previous owners done themselves a good service or a disservice by paying 7% interest plus an annual management fee from 2004 to 2011? Better heads than mine who've posted in this thread could probably answer that accurately. All I know is that I benefited from "bond paid" on the first house and a very low bond on the last. And you're my witnesses: It IS the last house which I will leave feet first in a box....

Last year there was a thread that became pretty controversial about buying new versus resale, in which the bond was only one consideration. For those who are undecided, it might be worth a re-read.

[gustavo]

Originally Posted by patfla06

I don't like the idea of paying double over the life of the bond
Plus admin costs.
My husband likes the idea of paying it off so later on (if I'm alone) my costs will be less.
It's an individual decision and not an easy one.

It actually is pretty easy, you either decide to pay it or not, easy enough.

[l2ridehd]

I think the answer is simple. If you truly believe your in your forever home then take an equity loan or money from someplace else and pay the bond. Tough to beat 7% guaranteed ROI. If you even have an inkling that you might move again then wait. Resale homes with the bond paid recover 34.7% of the bond value in the sale price. This is based on statistics I have tracked for over 6 years. (ranch and designer homes only) Although I guess if I had all resales it would be very close to the same.

If I look at everything, Time value of money, what I could invest the same amount for elsewhere, what I could recover if I sell, cost of bond interest, speed to sell with a bond paid, it looks like 7 to 9 years is the break even point. Also would vary slightly based on age of home and how much of a bond was left to pay.

The question on the bond expense being deductible if the home is a rental property is yes. ALL expenses including bond, trash, water, amenity fee, paint, repairs, home improvements, furniture, lawn mowing, etc, etc are a cost of doing business and a valid tax deductible expense. Again only if this home is rented or available to rent all the time and you use it 2 weeks or less each year for personal use.

I own 3 homes. One for our use and two rentals. Ours I paid the bond off as I knew it would be 6 years before we would be able to make the decision to stay or move. So I only needed one more year to break even. And if we stay there more then 7 I make money. One rental I bought with the bond already paid. The other is not paid and I will never pay it as long as it is a rental.

Each decision is unique and all variables should be considered. Be happy to help anyone step through the decision process if they are on the fence.

[patfla06]

We had planned to pay if off right away.
And then I kept thinking about GracieGirl talking about
how many people moved within T.V.

So now we're planning on keeping it for a year or two
to make sure we're staying and then if we are pay it off.