by Michele Newbern Gillis
Staff Writer
Nancy Riley, president of the Florida Association of Realtors, wants you to vote “Yes” to support the passage of an amendment to reform Save Our Homes on Jan. 29.
“Not only do you need to vote yes, but you have to get every one of your customers and clients to vote ‘yes’,” said Riley, who spoke at the Amelia Island/Nassau County Association of Realtors luncheon at Walker’s Landing at Amelia Island Plantation last month.
She told the group that FAR has pledged up to $1 million to support passage of the amendment. If passed, it would allow property owners to continue the three percent tax cap they currently enjoy as a result of the 1992 Save Our Homes amendment or to choose a new super-homestead exemption. This option would take up to $195,000 off their home’s taxable value, which would provide meaningful tax relief for thousands of families.
Riley acknowledged that the governments are trying to scare voters from voting yes by saying they would have to close libraries, not hire policeman or firefighters or let go staff, but she disagrees.
“The real reason that they are having a problem is because they committed the money way ahead of time from the money they’ve gotten from our boom years,” she said. “The other reason is that real estate isn’t selling, so they are not getting those other fees. They are not getting the documentary stamps or the sales tax. When people buy a home they buy carpeting, appliances and paint. That sales tax and other revenues are what the counties aren’t getting.”
But, she said the government has money in reserves that is being saved for a rainy day.
“Look at the reserves,” said the Coldwell Banker agent from St. Petersburg. “They are obscene. Statewide, also. We didn’t elect them to take our money and put them in reserves for a rainy day. We elected them to create a budget and to tell us how much taxes we need to pay in order for the budget to survive.
“God forbid we have a hurricane or some type of disaster and we need extra money,” she added. “Then come to us and ask us if we will increase the taxes. Don’t just take it upon yourself to tax us to death and put that money in reserves. That is just not the right thing to do.”
The law also states that the counties must keep their budget the same as this year.
“So what happens if we start selling real estate and the valuation goes up?” asked Riley. “If they use the same millage, they will be over that amount. What they will need to do then to make it where it needs to be by law?
“They have to reduce your millage. I’m telling you that is going to happen,” she said. “Commercial real estate will see big pluses. The second-home buyers will see big pluses, and those first-time home buyers will see a much bigger exemption than the $25,000 that currently exists. People who have said they can’t sell and downsize because their taxes would be so much more, they are going to be seeing a big exemption.”
According to the law, if you have someone who buys a $200,000 house, they only have to pay taxes on $50,000.
Riley said the law would be a great thing for everyone, even though government officials are telling you something different.
“Remember, the ad valorem taxes in your county are probably about 25 percent of your county’s full budget, so when they tell you it will cause them to have a hardship, it’s just not true,” she said. “They are not thinking. If they encourage property sales, they would get the sales tax, they would get the documentary stamps and they would get the revenue that they need for the other 75 percent of their budget. So, vote ‘yes.’ It’s good for your profession.”
Riley said some say they won’t vote for the bill because it wasn’t as much of a relief as they wanted.
“It’s not as much as we wanted,” said Riley. “One of our members likened it to the lottery. You buy a lottery ticket hoping to win $5 million, but instead you won $5,000. Would you be giving them back that $5,000? I don’t think so. If you vote no, that’s exactly what you will be doing. You will be taking the relief and giving it back and starting from ground zero.”
Riley said if it is voted down, the next time there could be an amendment on the ballot is November 2008, and no one would see any relief until November 2009.
“In this area (Amelia Island,) the tax relief will be very big for second-home buyers, people who buy resort homes, commercial and first-time home buyers,” said Riley. “For the first time, your commercial, resort and second-home buyers will be able to distinguish how much their taxes will be next year.”
Riley has been in real estate for 35 years and has seen the market go up and down and back up again. She said she’s not worried.
“So, what about this market?” asked Riley. “If you’ve been in real estate as long as I have, this is a normal. This is a normal market. These are the things we had to do for a long period of time and this is the type of effort we had to put into our profession.”
She said the last five years were crazy, even if it was a good kind of crazy.
“My advertising budget went way down,” she said. “We’d get a listing, someone would come and make an offer and then someone else would make an offer above the asking price, and we’d have bidding wars.
“It was kind of fun to be on that side of it. Although, lets face it, we weren’t really necessary. We weren’t viable so when the papers say that the listings are up in the Multiple Listing Service three times, you bet they are, because people can no longer put a ‘For Sale by Owner’ sign in the yard and hope to sell it themselves.”
She said the public now realizes the value of an informed, educated and risk management-concerned Realtor.
“So, now they are coming to you and saying, ‘I want you to list my home,’” she said. “And they are also not quarreling about whatever you want to charge, what your commission is or what your office policy is. It just doesn’t seem to be an issue anymore. We are spending a little more as far as advertising goes and having open houses. We are also not as able to have such a free life, but this is the business we are in.
“This is the way I’ve been used to doing business. So, for the new members who have enjoyed the five years of a continuing thriving market with good sales, I’m telling you the market will come back.”
The three reasons the Florida market stopped can be attributed to taxes, insurance and the media, Riley said.
“I think the last one was the biggest culprit,” she said. “When the things were going good, the market was strong and people were buying, what did we read? ‘When’s the bubble going to burst?’ ‘It’s just a matter of time when the bubble is going to burst.’
“So when the rest of the country’s market did come down,” she continued, “what were we reading? ‘The market has burst. Well, not burst, but the air has been let out of it. The market is going to be even worse in the coming years.’”
Riley said the negative views on real estate started affecting buyers. When making an offer, buyers would say that the market is bad and would not offer as much on a house as they would have a year ago.
“A couple of months go by and the sellers realized they might need an adjustment, and they lowered their price to go with the new market,” she said. “The newspapers still reported how bad the market was and how many listings we had. So, buyers still wanted lower prices even though sellers had already adjusted prices for them.”
Riley said Realtors need to stay positive.
“When you sit around and say, ‘I’m not selling anything because the market is so bad,’ or ‘we are not doing this because the market is so bad,’ you are also feeding that frenzy of the market being bad,” she said.
The Florida market has slowed down, but Riley feels that people have been waiting to see how low prices will actually go and are now ready to buy.
“I think we are seeing the market turn around because people want to buy in Florida,” said Riley. “This is about as low as you are going to see it. This is the best time to buy a home in Florida.”
Riley has been traveling all over the state visiting as many Realtor associations as she can, but she said it is hard.
“This is a long state, and this is a big state,” said Riley. “I made a commitment to every association that I would attend at least one of their functions this year. Some of the bigger ones know how to work the system and would invite me to three or four. I told them, we are going to limit it to one and you pick the one and I’ll be happy to be there.”
She explained how she got into real estate.
“I was about to become a single mom and I thought, ‘What am I going to do to support these two little girls with no college degree?’,” she said. “That’s when I decided to get my real estate license. The real estate profession has been very good to me. I often say even if I won the lottery, I would still sell real estate. I really love the profession. I might do it a little differently, but I would still be selling real estate.”