38k bond
 

My wife and I have been renting in TV for several months each year for past few years. We are getting ready to retire, downsize, and by a smaller home. Most of the homes we look at are basic builder grade, have cheap cabinets and countertops, have too much deferred maintenance, and are too overpriced. We don't want to spend another $120,000 to bring it up to a level found in houses outside TV. When you add in the taxes and bond it is not an affordable lifestyle we want in retirement. Plus the all the Villa Villages remind us an overpriced mobile home park. Just our observations.

You come here every year to rent, for what reason? If you're looking for a bargain go to Pasco or Hernando County and get a home in a 55+ community for half the price just 20 minutes from the Gulf, that's what I would do if price was the only consideration. The reason they can ask a lot more for the homes, you should have already that figured out and saved your first post for something important.

Here's my overprice mobile home, as you call it. I paid $158K new in 2011 and I've put about $20K into the home. I don't think too many trailer parks look like our villa community, maybe that is just me. It's now been appraised for $249K, that's inflation.

https://scontent-mia3-1.xx.fbcdn.net...b0&oe=5ED4956E

Such a handsome home!

But a home in Elsewhere, USA would have that $38,000 included in the purchase price. So in order to get a mortgage, the Elsewhere house must appraise high enough to finance the total price. Also, the Elsewhere mortgage’s interest rate would be lower than 6.75% and the term of the Elsewhere mortgage would probably be longer than any TV bond financing term, resulting in much higher monthly payments. And the mortgage interest on the Elsewhere (primary) home would be tax deductible. A buyer would also consider the higher new home amenity fees, property taxes, as well as the current lack of accessibility to needs and conveniences. Since golf is declining in popularity, the new areas have fewer courses. The Villages competes for new retiree buyers far beyond its borders. So the Developer sets the price of the bond, then the Bank collects higher interest on the bonds. Wow. I wonder... who owns Citizens First Bank?

I consider it a cost to live in the section I wanted.

Apparently, TV's founder was busy founding other things too. Citizens First Bank - Wikipedia

In my old age I've learned that businesspeople avail themselves of whatever financial benefits they can. If it's lucrative and not illegal, they jump on it. That's part of the "success" formula and is the way the game is played. Business is not all sunshine and butterflies. We, the consumers, if after considering the ethics of the situation or whether it's in our own financial interest, have the option of not playing the game. I for one chose not to play the bond game.

Not taking sides, it's just the way it is.

You were doing fine at first but fell apart at the end. The bond price is not set by the developer, it is determined by total amount spent for development, divided by the total acreage and then factored by the subdivision acreage divided by the number of homes in the subdivision. The rate of the bond is determined by the market at the time of offering. The bond holders receive the interest paid not a financial institution. The Citizens First Bank has nothing to do with the bonds. If I remember correctly the last bonds sold were facilitated through Chase.

As far as the amenity fee goes, it doesn't matter if you buy a new or existing home, the amenity fee paid is the prevailing rate at the time of purchase, currently $163/month. Similarly any SOH act savings disappear when a home is resold. A $300K home purchased in DeLuna today would pay the same property tax as a $300K home in Alhambra.

The new areas actually have fewer homes per hole of golf than areas north of SR44, it's really about simple math here. No there's not a championship course built yet because there are not enough homes to support it, it takes about 6500-7000 homes on average to support a championship course and they are not quite there yet south of SR44. Remember, championship courses are not amenities, they are a private business that must make money to survive.

As far as stores and restaurants go, 466 & 27/441 were barren for a long time when those areas first started development, the difference is they didn't have the benefit of multiple internet sites where people went to complain and whine about every little thing. The Villages can build all the building for store and restaurants they want, but if a business doesn't feel they want to move there they can't be forced to and the building will remain empty. The demographics of The Villages is a very unique and challenging one and surviving in it takes a lot of planning and risk taking.

Why did you continue renting for years? Where are you going to buy?

Only if the yearly payment didn’t fit into my budget.

Thanks for the clarification, GoldWingNut. My Dad loved those whisper-quiet bikes too.

As we all know, the developer doesn't make all his money just from just selling homes. As you pointed out, his Citizens Banks turn a good profit. Here's one most don't even consider. Almost every golfer in TV whether you play the championship or walk and play the executives for free, they all belong to the teetime system. That's $8 a month on your credit card, $96 a year for basically doing nothing but provide a interactive website. Let's say they're are 20,000 who belong, it might be way more, and at $96 a year times 20,000 equals $1,920,000. Pretty good pocket change for a website.

My property taxes went up over $1000 or 25% this year. You must be a Florida resident. Besides raising the tax rate, the Sumter County assessor, instead of doing his job and raising property market values slowly and steadily over a period of years to reflect reality, decided to hike property market values in The Villages by 15+% last year in one fell swoop.

Because of SOH (Save Our Homes Act = Shaft Out-of-State Homeowners Act), snowbirds were hammered with much higher property tax increases than you saw. The assessed value of the home of a Florida resident can only increase by the Consumer Price Index every year (around 2%) even though its market value as determined by Sumter County went up by 15%. On the other hand, the snowbird (non-Florida resident) saw the 15% market value increase translated directly into a 15% assessed value increase in just one year. The increased tax rate is then applied to this increased assessed value (2% vs 15%) minus any homestead exemption.

A big problem is that the agents don't tell people about the bond until the buyers are emotionally vested in the house they want. I have an acquaintance who was interested in buying here. I told him to ask how much the bond is on the house he was interested in. The response he got "it's based on the price of the house." That's not an answer!! They really don't want you to ask.

We just landed a house in Sumter county built in 2008. Bond never paid off. 12 years later as we take the helm - current balance is 34k - it started at 45k.

38k is a reduction in my world.

This house checks off a ton more boxes then we ever expected. So we triggered the purchase knowing the real agreed price was contract price plus bond balance.

It’s a choice - some are painful others aren’t. Find your own happy path...and trigger that direction.

Yikes! So what happens to the assessed value when the houses are sold?

Does the FL residents’ assessed value suddenly jump up to current market value when the sale is recorded?

I’m sure the home with an out of state owner would not have a reduction in their assessed value even if it is sold to a FL resident.

Does the disparity in assessed value remain forever?

If you search for pre-owned homes that are 20 years old, I would venture to say that you will find that the bonds are paid off. If you add $38K to the price of the home, you will almost double the price of the same home price of those outside of the Villages. Charging for infrastructure separately is like giving you the price of a home and telling you that the cost of plumbing is a separate charge, or the price of electrical wiring is a separate charge. BUT, if you want to live in the Villages you will pay whatever you are willing to pay to live the "lifestyle." To some, $38k is nothing and to others it is a deal breaker.

We just bought a designer in Chitty Chatty. I guess we got lucky as our bond was only $37,300.00.

Just a thought, the last car we bought in 2016 cost us $48,000.00. That makes the bond seem a little smaller. :)

I believe that Florida Law should be amended to relfect "asking Price" plus all liens that the seller will not pay at settlement or prior. Any other method is somewhat fraudulent in my mind. Total consideration is the Real Price . Sales people don't like this kind of disclosure.

The bond definitely looks small compared to the RR Cullinan which runs upwards of $350,000 plus tax of course. Or you could settle for a Bentley Bentayga if the Cullinan is too rich for your blood.

The Save Our Homes Act (SOH) only permits the assessed value of homes of Florida residents to increase per year a maximum of the Consumer Price Index increase or 3% whichever is less. So over time, the disparity in assessed values (and property taxes!) between the homes of Florida residents and out-of-state residents has, and will continue, to get worse; this is especially true when the property assessor doesn't increase the market value of houses each year as prices go up, but rather combines it all into a huge increase in market value in just one year like the 15% market value increase last year by Sumter County.

If a Florida resident sells his house to an out-of-state resident, the assessed value of the house will immediately rise to the market value for the new owner. Even if the out-of-state resident later becomes a Florida resident, he is out of luck; he will never get his house down to the assessed value that the seller had.

If the homeowner (doesn't matter whether or not he is a Florida resident) sells the house to a Florida resident, the Florida resident can transfer the SOH benefit from his old house to reduce the assessed value of the house he just purchased.

Unlike most states, the Save Our Homes Act is a great way for Florida to stick it to out-of-state homeowners in order to keep taxes down for residents and to insure that non-residents pay an increasingly disproportionate share of property taxes as home values rise over time.

But the lease is only $6500 a month

I think of the 'bond' as part of the Taxation of the property. It is in fact listed and paid with your property tax. I would never consider the bond as part of the cost of the property any more than I would consider the Tax part of the cost or 'basis' of the property. Paying the bond in full is akin to pre-paying your property tax for the next 30 years. Who would do that? Bonds have become a popular way for developments to create better infrastructure. The villages is not the only place you will find Bonds being used for this. We recently moved here from California where we had something called 'Mello Roos' that applied to many, many development areas in Southern California. Same concept as Bonds here in Florida. Personally I would never pay off a bond any more than I would pre-pay Property tax. Should you choose to sell the property its not likely you would recoup the money you put into paying the bond. If you were going to live in the home for the 30 years of the bond's lifetime then it could make sense to pay the bond to save the interest you would pay but few here would make that stretch of time.

Regarding your assertion that you would not be able to recover the bond payoff when selling the house, what data do you base this statement on? Regarding interest, the bond is amortized as a 30 year mortgage which means most of the interest is paid in the early years. After 10 years, you will have paid about 50% of the total interest. You do not have to stay in the house 30 years to save substantially on the non-deductible interest of the bond. Regarding trying to conflate property taxes with the bond, your total bond payments will be more than 2x the original bond principle. If I could prepay my property taxes for the future at 50% today, I would certainly consider it. Before paying off the bond, it is worthwhile to consider how the funds that would be used to pay off the bond are currently invested and the after tax return versus the saved non-deductible interest.

I agree, take two similar houses, one for $250K bond not paid, another for $275K bond paid

which one do think sells first?

I say the $250K home

Any buyer with half a brain would realize that the higher selling price for a house with a paid off bond also results in lower annual carrying cost for the house since they don't have to make a bond payment. There is no free lunch.

I spoke yesterday with a Villages sales agent. She said almost all of the new patio villas carry a 15,000 bond.

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Ahh....if I was now buying and the bond was an extra $38k...yep, deal breaker

Many buyers are minimally aware of the cost and description of the bond up until the time they examine, or not, the closing documents. The bond should be posted front and center so that any prospective buyer will engage with the broker in a thorough conversation regarding it.

A realtor showed us a place on a swamp and called it premium waterfront... we laughed.

It’s not for you... you don’t value what is available in the community . That is okay, lots of people want something different but lots love it too.

Shouldn't laugh, they are worth every penny look at resales

I'm guessing it was one of the first two houses on the left as you drive into Chitty Chatty. We looked at the house as it was being built and it reminded me of the movie 'Swamp Thing'.

The first house on the swamp is an Aspen for the bargain price of $493K. Go for it. Who knows, you might find Adrienne Barbeau sleeping on your lanai one morning.

yep, in two years worth about $700K

Just be clear, you need to google a definition of a Swamp Vs Wetlands :1rotfl:

For the last few years you have been here using and enjoying the amenities but now you are critical of the homes that are available. Surely there is something here that is equal to the level you found outside of TV. It sounds more like you are not able to find what you want in your price range and can't afford to buy what you really are looking for. Stating that the Villa's remind you of an overpriced mobile home park is a slap in the face to the tens of thousands of individuals who bought what was in their price range and are totally enjoying The Villages life. I don't think you will be happy owning a home in TV so you are probably better off continuing to be just a renter or buy one of the higher level homes outside of TV with lesser amenities.

Probably time to quit renting too......

I have never understood the difference between a swamp and a wetland.

To help me, how about you visit the house I mentioned and tell us if it backs up to a swamp or a wetland.

If you don't make it back, we will assume the Swamp Thing has grabbed you, and that will answer our question.

Were you dissatisfied with the lack of white caps?

Our bond was $13,000, 8 years ago but still. $38K is quite high, but just price it into your overall price budget and see if it's a fit for you.

Do you know if Chitty Chatty has good views of the high voltage power lines?