Include Your Contact Information on Your Listing Videos

by | May 8, 2023 | , , ,

 

Have you recently produced a property listing video and shared it on your blog, website, or social media platforms? If so, did you incorporate your contact information, including your city, state, zip code, and phone number, as well as the street address, city, state, and zip code of the property itself?

Sadly, an estimated 40-50 percent of all listing videos omit the listing agent’s contact information. A similar proportion fail to provide the property address. Compounding the issue, nearly 90 percent of social media users view videos with the sound disabled.

Consequently, whether you create the listing video independently or engage a professional videographer, be certain to display your contact details visually and include them in the audio track, as Google searches both. Additionally, always feature the property’s street address, city, state, and zip code. Without these details in both the visuals and audio, prospective clients may struggle to get in touch with you.

To really optimize your results, consider tagging your videos for improved search outcomes.

The Good, the Bad, and the Ugly about Owning a Detached Condominium (Part 2 of 2)

by | May 5, 2023 |

 

In 2016, my husband and I built a 2,220 square foot semi-custom home, thinking it was in a platted subdivision with a 6,603 square foot lot. Something was off, however. The sign on the lot had a unit number, but the street address made no reference to the unit number. I didn’t discover exactly what that meant until six years later.

Complete and utter confusion
Most realtors are totally uninformed about detached/site condominium ownership. So are most appraisers, attorneys, MLSs, mortgage professionals, and local building departments as well. In fact, even FHA, Fannie, and HUD have issues. The sheer number of widespread errors across the industry is staggering.

Moreover, when I searched for real estate training on this topic, all I could find were a handful of online articles, many of which were filled with egregious errors. The most notable mistakes were advising that detached/site condominium ownership was like a platted subdivision ownership or lumping detached/site condominium ownership together with attached condominium ownership.

Case Study
Unfortunately, the developer of our subdivision failed to install adequate drainage in many parts of our community. Our property was one of the worst cases. (video).

After hounding the developer for three years and ultimately taking the issue to our local building department to get the developer to respond, the issues were still never completely addressed. Because the ponding was putting our foundation at risk, we decided to handle the repairs ourselves.

During the six months I spent working on correcting the drainage, our HOA advised us that all the residential structures in our subdivision were situated on a single lot (which was correct) and hence, the HOA had to make any repairs (incorrect).

The attorney for our HOA then contradicted that advice by telling our Board that we owned our own lots (which was partially correct—we owned the surface area of the lot). That meant I was responsible for repairing the drainage on my property (partially correct). The HOA was responsible for maintaining the drainage easements.

In the midst of all this confusion, we also applied for a HELOC.

What had we purchased?
Looking for guidance, I read all 673 pages of our subdivision’s Condominium Declaration and found this:

 

 

 

 

At that point, I was more confused than ever. So was just about everyone else, especially the appraiser and the lender for our HELOC. Specifically:

  • The lender gave us a single-family residence loan application, i.e., for a platted lot in a Planned Unit Development.
  • The appraiser used the form for appraising single-family homes for platted lots in Planned Unit Developments instead of the forms for appraising condominiums.
  • Both the lender and the appraiser missed several of the required condominium forms and disclosures.
  • An additional source of misinformation was the Travis County property tax records that showed our “lot size” rather than stating the boundaries of the surface area of the land on which our Unit was located. This could result in the property being overvalued by appraisers and for property tax purposes.
  • When the escrow received the preliminary title report showing that our property was a condominium, the lender contacted me and asked if that was correct. At that point, I knew it was a detached condominium and informed the loan officer about that that meant. We had to redo the entire loan application on the correct form. The appraiser also had to generate a new appraisal.

It’s easy to see why all of this is so confusing, especially when I looked at my original loan documents and deed of trust from our purchase in 2016.

  • Our note was on the “MULTISTATE FIXED RATE NOTE-Single Family-Fannie Mae/Freddie Mac Uniform Instrument Form 3200 1/01.”
  • Our Deed of Trust used the: “TEXAS-Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3044 1/01.”
  • There was also a two-page CONDOMINIUM RIDER recorded on form 3140.

Part of the confusion for lenders is also due to the Fannie Mae guidelines that state:

Site condos in which the unit owner owns the detached condo unit and the land upon which the unit is built are a type of detached condo. The waiver of project review applies for new and established projects.

HUD Rule 4000.1 which also applies to FHA, states:

A Site Condominium refers to a project of Single Family, totally detached dwellings encumbered by a declaration of condominium covenants or a condominium form of ownership. They have no shared garages or any other attached buildings. Project approval is required for Site Condominiums that do not meet this definition.

Both definitions fail to address how the land is held, i.e., as surface rights as opposed to owning a lot in a platted subdivision and/or Planned Unit Development.

Fortunately, everything fell into place when one of the attorneys on our Board figured out that what we owned was a detached/site condominium. We were able to do the repairs to our drainage and our loan funded as a condominium with the required documentation.

Detached/Site Condominiums: a minefield laden with disclosure errors
Over and beyond the industry’s overall ignorance about detached/site condominiums, the other major source of disclosure errors rests with the MLSs and the portals. Virtually all MLSs require realtors to indicate whether a property is a single-family residence or a condominium. To the best of my knowledge, this choice is always binary. There is no way to select both “condominium” and “single-family residence.”

The second major issue is the “lot size” field on the MLS listing input forms. In my case, I don’t own a lot, but I do own the surface area of land on which my Unit is located plus all the structures and systems that serve my Unit exclusively. How do I disclose that on the MLS? Do I fill out with a notation in the MLS description or leave it blank? If I do put lot size with an asterisk, how do I describe “surface ownership?” There are absolutely no MLS guidelines or rules to help me.

An even bigger issue is how do realtors advise their sellers to make this disclosure on the state mandated disclosure documents? Does my brokerage or realtor association need to draft a separate detached/site condominium addendum? Who needs to take the lead? Clearly, leaving this up to agents to address would be a massive mistake.

When it comes to search, detached/site Condominium owners are in a lose-lose situation
Since the portals pull their data from the MLS, they’re stuck with the same binary choice the realtors face in terms of displaying detached/site condominium listings. For example, on realtor.com the choices are “single family” and “condo.” On Zillow the choices are “houses” and “condos.”

Where this situation can be particularly damaging to owners of detached/site condominiums is due to how consumers search. Very few buyers searching for a single-family home will also search for condominiums.

To illustrate the cost to detached/site condominium owners, one of my neighbors has a beautiful home that was priced right. When the realtor learned the home had to be classified as a condo on the MLS rather than single family, the agent changed the listing to condominium. Showings dropped and the highly motivated sellers ended up taking the property off the market.

Furthermore, appraisers typically rely on MLS data for establishing details about the property and for locating comparable sales. How can they choose the appropriate comparable sales when the detached/site condominium is lumped together with traditional condos where the owners have no surface rights to the land?

Lost buyers
I recently had a buyer stop me while I was out walking and ask, “Where is Unit 42?” When I asked for a street name, she said that’s the only address her realtor gave her. While Unit 42 is the correct legal address, none of our 100 detached condominium units have a unit number on our properties—we only have street addresses.

While realtors must use the Unit number for appraisal, lender, MLS, and title purposes, they still need to include the street address to guide buyers to the right location.

What to do next? “Single Family Condos?”
What steps can the industry take to address these issues as rapidly as possible? Based upon my experience, both realtors and consumers have a difficult time wrapping their heads around about what a detached/site condo actually is.

A term that would be easier to understand (although you would still have to use your state’s definition of what the type of ownership is) would be “Single Family Condominium.” This term captures the duality of this style of ownership. In terms of implementing this change:

The fastest way to eliminate much of the confusion regarding detached/site condominiums would be to allow these properties to appear in both the single family and condominium search fields on the MLS and the portals. The new MLS category could be “Single Family Condominium, (i.e., detached or site condominium based upon state real estate laws).

  • Agents marketing or showing detached/site condominiums could also use the term “Single Family Condominium” (i.e., detached or site condominium) to describe the dual benefits of “surface ownership the land” coupled with the consumer protections of condominium ownership—the best of both worlds. Clearly, having an exterior picture of the property is crucial.
  • MLSs must also give realtors a second option when it comes to lot size. This second option would reference the “Unit boundaries of the land.” In other words, it would describe the “surface rights” to which the buyer would have title as part of the purchase of their unit.
  • State Real Estate Commissions/Departments must incorporate training on detached/site condominiums in all real estate licensing courses.
  • Experienced realtors, appraisers, and mortgage professionals also need training and guidelines about how to explain this style of ownership plus how to make accurate buyer and seller mandated disclosures.
  • To minimize their risk, brokers should compile a list of all detached/site condominium subdivisions in the areas they serve. These properties should be flagged so that the brokerage can make sure that they are accurately described on the MLS and any in marketing materials. Brokers must also take steps to make sure their agents are fully trained about how to make accurate representations and disclosures to consumers.
  • Associations and brokerages should consult with their legal counsel as well as with an experienced legal expert on detached/site condominium ownership in their state. Ideally, their counsel will draft language realtors can use to make the correct disclosures to their clients. They may also want to draft a separate disclosure to be used in all detached/condominium transactions including listing and buyer packages that describes this style of ownership.

The bottom line
Detached/site condominium ownership is a complex issue that requires immediate attention from the real estate industry. Failure to address the confusion and lack of training in this area puts both practitioners and their clients at risk. It’s time for the industry to make the needed changes now to mitigate these risks and provide better guidance and accurate disclosures for everyone involved.

The Most Important Condo Column You Will Ever Read (Part 1 of 2)

by | May 3, 2023 |

 

The lack of knowledge nationally about “detached” or “site condominiums” is profound. Almost all realtors, broker-owners, managers, MLSs, Associations, appraisers, lenders, and taxing authorities are unfamiliar with this widespread style of homeownership. The result has been massive confusion within the real estate community that has also led to serious misrepresentations being made to consumers as well.

Assume that you’re taking your buyer out to see two different properties. Both properties have 3 bedrooms, 2.5 baths, an office, family room, and a two car garage. Both are located within “Planned Unit Developments” with an HOA and CC&R’s. The recorded documentation says title is “fee simple.”

Here are the MLS photos of the two properties.

 

 

 

 

Property 1                                                                 Property 2

The MLS states the lot size as per the Appraisal District (property taxes) for Property 1 is 10,332 square feet and for Property 2, is 11,848 square feet.

One of these properties is a “detached” or “site” condominium. Can you tell which one?

I recently interviewed Bob Burton of the Winstead PC law firm. Burton’s specialty is detached condominiums, attached condominiums, and planned communities. He currently works with the Texas Legislature as well as many of the nation’s largest builders. His experience with detached/site condominiums dates back to 1994. He also wrote the Condominium Declaration for the subdivision where I live.

The difference between platted subdivisions vs. detached/site condominium developments
Property 1 above is a detached/site condominium. Property 2 is located in a platted subdivision. Both are in Planned Unit Developments with an HOA and CC&R’s. It’s easy to see why there is massive confusion about this style of ownership because they so closely resemble traditional platted subdivisions.

Part of the confusion results from the fact that a condominium development is a form OWNERSHIP, not a specific type of physical development or structure.

Vertical and horizontal condominiums vs. detached/site condominiums
The subdivision where I live has three types of condominiums. Our “Lofts” are the traditional style of apartment or “vertical” condominiums. Our townhomes (five to a building) are an example of “horizontal” condominiums. The Villas are free-standing detached condominiums like Property 1 above. We have an HOA and there are separate sub-HOAs for the three types of condominiums.

Our subdivision is also a Planned Unit Development zoned as three lots. Lot 1 contains all the residential structures. There is one commercial lot that has yet to be developed and the city library is located on the third lot.

You can’t identify a detached/site condominium merely by looking at the property or what the tax assessor has posted as the “lot size”
Burton explains that detached/site condominiums are condominium units that are separated from one another.

Think of a traditional subdivision. You drive through the subdivision, you have platted lots, and you have homes that are detached from one another. A detached/site condominium looks and acts exactly the same as a traditional platted subdivision, yet the legal ownership is structured as a condominium as opposed to platted lots.

If you buy in a traditional platted subdivision, you are buying a lot. And if you pull up the plat of those lots, you will see lot one, lot two, lot three, lot four, and you will see 1602 Oak Street, 1603 Oak Street, 1604 Oak Street. So in a condominium, similar to a lot, you will have Unit One, Unit Two, Unit Three, Unit Four, but a different street address.

How to recognize if a property is a detached/site condominium
The easiest way to recognize whether a property is a detached/site condominium vs. a platted subdivision is to look at the plat map. Here’s a plat map from PropertyShark showing three different subdivisions.

 

 

 

 

 

 

 

Property 1 is located in the white part of the map above. You can see the three lots in the the subdivision. You can also see the street names, but there are no lot numbers. The yellow areas are for two typical platted subdivisions and include the lot numbers for each property. The pink lot is an undeveloped commercial property.

Here’s a closer look at one of the plats from the subdivision where property 1 is located. Notice that there is no lot number, but instead there is a Unit Number for each property. Also note the plat below shows square footage numbers that corresponds to footprint of the land on which the Unit is situated—e.g., Unit 71 has 5,770 square feet and Unit 72 has 6,063 square feet.

 

 

 

 

 

 

 

 

 

So if Units 71 and 72 are detached condominiums situated on a single lot, why did the Appraisal District give a value for the “lot size?” So did the realtor who correctly quoted the number provided by the Appraisal District, but replicated the mistake by entering it into the the “lot size” field on the MLS.

The simple answer is they failed to check the plat map and/or legal description. Alternatively, they didn’t know that a Unit number coupled with a square footage number describing the boundaries of the Unit indicates the property is a detached/site condominium. This is a major mistake, one that realtors, MLSs, appraisers, and lenders make daily all over the country.

Detached/site condominiums are very similar to traditional platted subdivisions
Burton explained how detached/site condominiums have a great deal in common with traditional platted subdivisions.

  • Owners of detached/site condominiums have fee simple title just like owners in platted subdivisions.
  • In subdivisions with HOAs, there are CC&Rs, By-Laws, and use restrictions limiting what owners can and cannot do to their property. The HOA typically maintains any private streets, entry gates, drainage easements, and open space.
  • The homeowner maintains their own insurance, performs their own exterior and interior maintainance of the structure plus maintaining all the systems that support the property.
  • Both styles of subdivisions may be Planned Unit Developments (PUD), i.e., a community of single family homes, condos, and or townhomes, where all homeowners belong to an HOA. The subdivision may also include restaurants, shopping, educational facilities, recreation, etc.

In terms of the differences:

  • Traditional subdivisions where the homeowners own their lots are created by plat map submitted to a county or city for approval.
  • According to Burton, what you won’t see in a traditional set of CC&Rs for a platted subdivision is the Condominium Declaration which is used to create the lots.For example, the Declaration for the subdivision where I live is 673 pages long. A substantial proportion of it is devoted to the amendments that create the new units. In the case of my unit, the original plat showed the property as being three separate units. The developer decided to take the three units and reduce them to two units. The change was made as an Amendment to the original Declaration including a new plat map with the renumbered units.
  • Instead of a legal description of the lot lines on the property, Burton also explains:You will see unit boundaries and how the units are configured. In a detached condo, you’ll see an upper boundary, you’ll see a lower boundary, and you’ll (also) see a discussion about side-to-side boundaries. Think of a detached condominium as a three-dimensional airspace in effect, that encapsulates the home as well as the exclusive yard space around the home.
  • To locate the correct legal description of the unit, search the Declaration for the “Condominium Plats and Plans.” These are typically attached as an exhibit to the Declaration. Locate the location of the specific unit on the plat map to determine the unit number. The unit number is your legal description, NOT the street address.

When you purchase a detached/site condominium, what exactly do you own?
Using the detached condominium subdivision where I live as an example, I have three different interests in the ownership of my unit with the following definitions set forth in our Condominium Declaration:

      • “Limited Common Elements,” if any, means those portions of Common Element reserved for the exclusive use of one or more Owners to the exclusion of other Owners.
      • “Common Elements,” means all portions of the Property, SAVE AND EXCEPT the Master Units, expressly including the Land.” Examples would be our park, the swimming pool, Club House, and all the other property where there are no Master Units (i.e., Lofts, Townhomes, and Villas).
      • “Master Unit” means each physical portion of the Property designated by this Declaration for separate ownership, the boundaries of which are shown on the Plats and Plans.

Our Declaration goes on to state the nature of Master Unit ownership:

Not a Typical Condominium Unit

  • A MASTER UNIT DOES NOT INCLUDE LAND.
  • THE CONVEYANCE OF A MASTER UNIT IS NOT A METES AND BOUNDS CONVEYANCE OF LAND.
  • THE CREATION OF A MASTER UNIT DOES NOT CONSTITUTE A SUBDIVISION OF LAND.
  • EACH MASTER UNIT IS THE SURFACE OF A DESIGNATED PIECE OF LAND, EVERYTHING ABOVE THE SURFACE FOR 200 FEET, AND ANYTHING BELOW THE SURFACE THAT SERVES OR SUPPORTS THE ABOVE-SURFACE IMPROVEMENTS AND ANYTHING THAT EXCLUSIVELY SERVES THE MASTER UNIT.

Common misconceptions about platted lot ownership
Burton describes how platted subdivisions have similar limitations to those of detached/site condominiums:

There’s another misconception that if you own a platted lot, that there is no upper boundary to the heavens or to the center of the earth. In the United States, the upper limit for your lot is 600 feet in a high traffic area of aircraft, and 1000 feet in a low traffic area of aircraft. Below the ground, you have mineral interests, and you have a lot of other things that potentially impact your ownership. You don’t own to the center of the earth.

Detached/site condominiums are described in three dimensions. Burton explains how they have sought to make this style of ownership as close as possible to a subdivided platted lot here in Texas.

Consequently,

We define the unit as anything that exclusively serves that unit, irrespective of whether it’s located within the boundaries of that unit, tree roots, grassroots, swimming pool, foundation, (plus) telecommunication lines that run from a main line service in the street branch off, and exclusively serve that particular home. The detached condominium unit actually, in reality, looks like a square with a bunch of legs hanging off of it.

In other words, the owner of a detached/site condominium has “surface rights” to the land which closely resemble the same rights as platted lot owners. In terms of what the owner of a detached/site condominium can do assuming that you are comparing a deed restricted platted subdivision with detached/site condo subdivision:

There should not be any difference between the two other than unique characteristics of that particular project and that particular development.

Appraisals on detached/site condos should not differ from platted subdivision lots
Because detached/site condos have surface rights to the land, Burton argues:

There really should be no difference between the appraised value of a detached condo versus a subdivided lot. Within the boundaries of the detached condo that is exclusively yours, you own fee simple title to that component. There should be no difference in value between the detached condo and the platted lot subdivision.

Reasons detached/site condominium ownership is actually preferable to platted lot ownership
Burton enumerated a wide variety of reasons that detached/site condominium ownership is better for almost all parties involved as opposed to platted lot ownership.

  • Consumer protection

Detached/site condominium ownership:

Is much more protective of the consumer, believe it or not, than a traditional platted subdivision. If you think condominiums as somehow inferior to traditional platted subdivisions, almost all states have a process where the developer is required to provide comprehensive information to the purchaser prior to their entering into the purchase and sale agreement for a condominium unit.

In Texas, this is called a Condominium Information Sheet. It is required by law and is a summary of all the components of the project, what rights the developer has retained in the project, how many units will be within the project, a first-year fiscal budget of the association estimated monthly assessment, community rules. There are also mandatory requirements for your association to secure insurance.

For traditional platted subdivisions, this doesn’t exist.

It’s important to note that the way different states treat the creation of detached/site condominiums and the protections provided varies from state-to-state. Burton described some of the differences:

      • Like Texas, Georgia has the Condominium Information Statement concept. Alabama, Oklahoma, and Tennessee do not.
      • Arizona: developers must go to the Arizona Department of Real Estate and obtain an Approved Property Report.
      • California: Detached condominiums are considered to be planned developments (p.16) and must follow the guidelines for having that style of subdivision approved.
      • New York: Developers must have their Disclosure Package approved by the state attorney general.
  • Density and demographics
    Detached/site condos started because of density. As opposed to “antiquated code-based subdivision requirements, minimum lot sizes, and rectilinear structures of land area” required in platted subdivisions, the developer may want to do a subdivision that is a little denser and enables him to take advantage of the beautiful trees or views. Moreover, many of the community building codes and ordinances are “not reflective of what the market is asking for, (which is) being smaller, denser, and more community oriented.”
  • “Master Planned Communities Outperform: The Lifestyle Commands a Price Premium”
    While not all detached/site condominiums are located in Master Planned Communities, those that are definitely outperform individual homes in traditional platted subdivisions as the chart from John Burns Consulting clearly illustrates below.

 

 

 

 

 

  • FHA benefits for both developers and consumers
    “Site condominiums” are exempted from FHA’s Condominium Project and Processing Guide. If they were not exempt, the project would be required to meet certain unit presale requirements prior to issuance of FHA mortgage insurance on a specific unit. (In some cases, FHA may require up to 50 percent of the units be pre-sold before any of them can close.)

Despite all the misconceptions, detached/site condominium ownership offers significant benefits, including consumer protection, density, and demographic advantages. Nevertheless, the lack of understanding among industry professionals means massive mistakes are being made in the field.

Stayed tuned for Part 2 on May 5, 2023!

 

Four ChatGPT Marketing Tips

by | Apr 24, 2023 | , ,

 

I asked ChatGPT to locate the four best marketing tips it could find for realtors. Here’s what it found:

  1. Leverage the power of social media platforms like Instagram and Facebook to showcase property listings with high-quality visuals and engaging storytelling, increasing your reach to potential buyers.
  2. Utilize video marketing, including virtual tours and drone footage, to provide an immersive and interactive experience for potential buyers, setting you apart from competitors.
  3. Build a strong online presence with a professional, easy-to-navigate website that highlights your expertise, showcases client testimonials, and offers valuable resources for buyers and sellers.
  4. Establish yourself as a local expert by providing informative content through blog posts, podcasts, or webinars on the latest market trends and community highlights, fostering trust and credibility with your audience.

***

Stay tuned next week for a special two-part article called “The Most Important Condo Column You’ll Ever Read.” Detached/site condominiums are everywhere, yet most agents, appraisers, lenders, and MLSs don’t have a clue as to what these are. As a result, these are being misrepresented by agents, they’re being inaccurately disclosed on state mandated disclosure forms, on appraisals, by lenders, on the MLS, and even by the local property tax authorities. We’ll have both columns in next week’s special edition.

Are You Sick and Tired of All Those Ads, Cookies, and Trackers?

by | Apr 18, 2023 | ,

Unless you’re using Duck-Duck-Go, you’re getting hundreds of thousands of ads, cookies, and trackers placed on you every single year. This wastes tremendous amounts of your time as you wait for these ads to upload as well as waiting for all the pop-up ads that follow you from site to site. Moreover, these ads, cookies, and trackers increase your risk for identity theft or being hacked.

There’s a simple solution to get rid of up to 98-99 percent of these ads and tracking cookies. Go to Brave.com and download their browser. This site was started by the founder of Mozilla, the company that created Firefox. I’ve been using Brave for 2.5 years and my current stats are:

  • 2,035,051 trackers and ads blocked (that’s 2,236 per day).
  • 95.90 GB bandwidth save on my computer.
  • 1.18 days (24 hours per day) in time saved.

You’ll love seeing up to 98 percent of all those annoying ads and tracking cookies disappear, especially those on Facebook.

Take Brave.com for a test drive. You’ll be glad you did!