Menu
Lennar Corporation (NYSE: LEN and LEN.B) today announced the completion of its acquisition of WCI Communities, Inc. (NYSE: WCIC), a premier lifestyle community developer and luxury homebuilder of single and multi-family homes, for approximately $643 million, or $23.50 per share. The purchase includes a portfolio of well-located, owned and controlled land totaling approximately 13,700 homesites, located in most of the highest growth and largest coastal Florida markets, as well as WCI’s complementary real estate brokerage and title services businesses.
Stuart Miller, Chief Executive Officer of Lennar, said, “We are very excited to complete the acquisition of this outstanding company. We’d like to extend a warm welcome to the WCI associates who will be joining the Lennar family.”
Mr. Miller continued, “Prior to closing, we elected to pay the purchase price in all cash as opposed to using 50% stock. We view this decision as equivalent to a $321 million stock repurchase and chose this structure for various strategic reasons. First, while the use of cash slightly increases our current leverage, the combination of our carefully managed 7-10% target growth rate, soft pivot land strategy and strong profitability and operating cash flow will continue to fortify our balance sheet and position us to end fiscal 2017 with similar leverage to our fiscal 2016 year end. Second, using cash versus stock for the purchase of existing, open for business, established high-margin communities with proven sales, offsets the need to purchase new raw land at retail prices for future growth in these markets. Third, we continue to believe that the housing market remains strong and will continue to gradually improve for the foreseeable future. And finally, we believe our stock is undervalued given our strong core business and the maturity of our ancillary businesses.”
Richard Beckwitt, President of Lennar, said, “Through our extensive due diligence process, we have identified many areas where we believe significant synergies will be realized, and we anticipate a very smooth transition for current WCI homebuyers. We are looking forward to working with the talented associates from WCI to enhance our homebuilding operations and ancillary businesses to maximize the opportunities from our combined leading market position in Florida.”
Lennar Corporation, founded in 1954, is one of the nation’s largest builders of quality homes for all generations. The Company builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar’s Financial Services segment provides mortgage financing, title insurance and closing services for both buyers of the Company’s homes and others. Lennar’s Rialto segment is a vertically integrated asset management platform focused on investing throughout the commercial real estate capital structure. Lennar’s Multifamily segment is a nationwide developer of high-quality multifamily rental properties. Previous press releases and further information about the Company may be obtained at the “Investor Relations” section of the Company’s website, www.lennar.com.
Forward-Looking Statements
Some of the statements in this press release are “forward-looking statements,” as that term is defined in the Private Securities Litigation Reform Act of 1995, including statements regarding the strength of the housing market in the future, our 7-10% target growth rate, and our anticipated leverage at the end of fiscal 2017. These forward-looking statements are subject to risks, uncertainties and assumptions. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertainties that could cause actual results and events to differ materially from those in the forward-looking statements. They include the risks detailed in the Company’s filings with the SEC, including the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2016. It is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Buying a brand-new home vs. a resale home can be completely different when it comes to the strategies that you use to save on your home purchase. If you’re interested in buying a brand-new home, don’t be afraid to ask prospective builders questions and learn the strategies that can help you save. This recent Zillow Porchlight article by Daniel Bortz, shares six questions you should ask in order to find the right home at the right price.
“What financial incentives do you offer for using your preferred lender and title company?”
The bad news: Production builders are often reluctant to set a precedent for negotiating sales prices. (Custom builders tend to be more flexible.)
“If a new home is listed for $370,000 and it sells for $360,000, the next buyer in the development is going to want to pay that lower amount,” says Craig Reger, a real estate broker at Keller Williams Realty in Portland, OR. However, many offer handsome incentives to buyers who use their preferred lender and title company.
Some may even knock off up to $10,000 in closing costs, says Peggy Yee, a supervising broker at Frankly Real Estate in Vienna, VA. Others will sweeten the deal by negotiating prices on finishes, such as upgrading carpet to hardwood floors.
You should still shop around and get quotes from at least two other lenders before making your decision. But don’t just pay attention to the interest rates. “You need to compare each loan estimate’s terms to make sure you’re getting an apples-to-apples comparison,” says Chris Dossman, a real estate agent with Century 21 Scheetz in Indianapolis.
“Which are the standard finishes?”
When you tour a development’s model home, keep in mind that you’re previewing a high-end version of the standard home. “The model has all the bells and whistles,” says Dossman. Therefore, you need to find out from the builder which options are standard, which options are upgrades, and what each upgrade costs.
One way to cut costs: Move into the home without an upgrade, then hire a contractor to do the work. “Builders charge a huge markup on certain finishes and products,” says Reger. “The builder might charge $4,000 to $6,000 for a high-performance air conditioner, but you may be able to get another company to install that same unit for as low as $2,500.”
Granted, opting for the latter means you’ll probably need to pay the contractor in cash. “For some people, the benefit of paying the builder to do upgrades is that they can roll the costs into their loan amount,” Reger points out.
“What are your long-term plans for the community?”
Depending on the size of the land, the builder might be planning several subdivisions. This could impact your decision to buy.
For example, let’s assume that only a few homes have been built and sold. If the developer plans to construct an additional 50 homes and you’re one of the first people to move into the neighborhood, you may have to deal with loud construction crews for several months.
There’s also the risk that the builder loses funding and another company takes over the development. Dossman advises proceeding with caution: “If the builder changes and a lower-quality builder takes over, that could affect the value of your home.”
As newlyweds, planning the next stage of your lives can be fun, exciting, and perhaps uncertain. If the “next step” for you and your partner means finding a new place to call home, this recent Realty Times article shares first-time home buying tips for newlyweds. Thankfully, a few simple strategies can help you conquer this next step with ease and confidence – together.
Choose the Right Neighborhood for Your Budget
Kick off your home-buying search by exploring neighborhoods that fit your lifestyle and budget. Remember to look beyond what your mortgage and home insurance will cost. Utilities, car payments, student loans, food, furniture, credit card debt and any other fixed expenses should be factored into your budget. Don’t forget to add in costs for annual repairs, as well as just some fun money to actually enjoy your home.
Take a look at the neighborhoods that appeal to you from how long your commute will be to the available recreation. Outdoor lovers and hiking enthusiasts will have completely different criteria than someone who loves the downtown nightlife, and either option will affect your budget.
Right-Size Your Life
Buying your first home as newlyweds is full of hope and excitement of the years to come. Soon you start thinking about how it could be your forever home and hold all the children and guests of your dreams. But in reality, any home you purchase should be right-sized for your current life or the not so distant future.
For example, purchasing a home for the five kids you want is expensive with a lot of upkeep and overhead. You may decide to put off having children for several years or change plans. Instead, focus on the home you need for the next five or six years that can comfortably accommodate the two of you. An extra room for guests, a new baby or an home office can add the needed flexibility to your new home.
It’s your turn to host the party for the big game and the procrastinator in you is frantically scrambling to think of snack ideas. Lucky for you, we scrounged up some ideas that are quick, easy and will satisfy your “hangry” guests. Check them out below!
You can’t go wrong with a meat and cheese cracker tray! This one is simple and only requires 4 ingredients: 2 cheese blocks, crackers, and pepperoni. Place the crackers in a football shape, fill in the middle layers with both cheeses, place the pepperoni in the center, then use small strips of cheese and make the laces to give it the final football touch. Easy cheesy! See how we constructed our football shaped cheese plate here:
Satisfy your sweet toothed guests with “football” pretzels! This one is also quick and easy! All you need are: pretzel rods, milk chocolate candy melts, and white decorative frosting. Using a microwave safe mug or bowl, melt the candy melts in the microwave. We suggest heating the candy in 30 second intervals, stirring until melted. Cover half of the pretzel rods in chocolate, place on wax paper and refrigerate for 1-2 hours. After the chocolate has hardened, draw laces on the chocolate end using your decorative icing. Watch the video below to see how we created these tasty snacks:
Do you have a great home tip to share? Simply tag it with #HowToU on Twitter or Instagram and your tip could turn into a future video!
Even if you’ve just started thinking about starting a family, you’ve probably noticed your priorities slowly starting to change. Although they are quite small, babies have a way of filtering our view of what’s important in a new home and community. If a growing family is in your future, this Trulia article, via Forbes, highlights the neighborhood features to consider in your new home search.
The school district you choose is one of the weightiest decisions for many parents. Of course, you want a school that offers a high-functioning environment for learning. You’ll get an A-plus for research when you use Trulia Maps to help with your search. If you want to know more about each school district, use the Schools layer by choosing your city and clicking on “Schools.” You’ll find the GreatSchools rating and the number of students per teacher. Once you spot an area you like, visit the neighborhoods that feed into that school. GreatSchools’ ratings are based on test score and although a good starting point, test scores are not the only factor families use to determine the right school district for them. Once you spot an area you like, visit the neighborhoods that feed into that school.
Visit the school in person as well if you can. “In some areas, the most popular and high-performing schools are oversubscribed and overcrowded,” says Alina Adams, author of Getting Into NYC Kindergarten. “Don’t just ask if the schools are good; ask if they usually have room for all the students who want in.”
From the moment you become a parent, your job is to keep your child safe. You babyproof the home, maintain regular doctor visits and keep your child out of harm’s way. Searching for a neighborhood with a low crime rate ranks right up there. You might assume that a rural area is safer than the suburbs, which is safer than the city. But that isn’t always the case.
You can check out the crime risk of any neighborhood by using the Crime layer in Trulia Maps. The maps let you explore the safety of an area, right down to reported incidents. If you love the city and wish to expose your children to culture and the arts as Joan Kagan, sales manager at TripleMint Real Estate in New York, NY did, use the Crime layer to help narrow down neighborhoods for your safety preferences. “You want to feel safe in your neighborhood, especially when you have children,” says Kagan, who raised three boys on the city’s Upper West Side. “In addition, once your children are teenagers, it is great for them to be able to explore the city. You want to feel safe with them leaving your apartment on their own.”
When you’re just starting a family, of course, you’ll keep your childless friends. But face it: Your interests are suddenly quite a bit different. While all you want to do is talk about the best ways to get your baby to sleep through the night, all they want to do is stay out all night (and sleep in the next morning!). So you’ll need to build a new network for yourself and for your children.
If this tops your list of priorities, look for evidence of other families while you’re on the house hunt. Are children playing on the sidewalks? Bikes or wagons in the front yard? Families out together for a walk? All of these signs point to a thriving neighborhood for families — and lots of potential friends for you and your kids.
Read the full article: Neighborhood Features To Look For If You’re Starting A Family
A bigger home or more amenities? What is your preference when it comes to thinking about the type of new home that you would like to buy? A recent survey from NAHB shows that most home buyers prefer a smaller home with more amenities when it comes to a new home. This recent article shares more details on the findings from this survey.
The average size of newly built homes decreased in 2016 – a sign that the home building industry is preparing for the coming wave of first-time buyers as millennials begin to dip their toes into the market, according to research and survey results released today by NAHB.
In 2015, the typical new home had 2,689 square feet. In 2016, it dropped to 2,634, U.S. Census data show. That’s the first drop in size since 2009, said Rose Quint, NAHB’s assistant vice president for survey research.
“The data on new home characteristics show a pattern,” she said. “2016 marked the end of an era that began in 2009 when homes got bigger and bigger with more amenities. I expect the size of homes to continue to decline as demand increases from first-time buyers.”
These homes must include specific amenities: Just as in 2015, a separate laundry room tops the list of must-haves across all income groups. Energy-efficient features like low-E windows, Energy Star-rated appliances, ceiling fans and programmable thermostats are also at the top of buyers’ wish lists. Home buyers also want their homes to include a patio, exterior lighting and a full bath on the main level.
Not as popular among buyers in 2017: cork flooring and solar and geothermal energy, as well as features such as pet-washing stations, outdoor kitchens and sunrooms. “Builders are not going to include them in the average home,” Quint said.
A majority of home buyers prefer a new home to an existing one, and 65% want that home to be in the suburbs. Size preference goes up as income goes up, with buyers in the $150,000-plus income bracket preferring homes just under 2,500 square feet. No matter what the income, buyers overwhelmingly prefer a smaller house with more features and amenities over sheer size. “More than two-thirds are willing to trade size for high-quality products and features,” Quint said.
New research from Better Homes & Gardens targets a subset of these home owners: “First Millennials,” those between the ages of 22-39 who have purchased their first home.
These buyers generally purchase older housing stock in need of fixing up, said executive editor Jill Waage, which means “88% of them are very interested in learning about home improvement and repair.” They don’t want to spend too much money, and they are willing to compromise on high-quality products and finishes, saving them for their next home. “They’re scarred,” from the recent economic downturn, “but they aren’t scared.”
What do you think? Share your new home preferences in the comments below!
If you’re considering selling your home or buying a new home this year, it’s worth finding out if you’re located in one of the hottest real estate markets in the U.S. This recent CBS News article by Aimee Pichhi, explains a few real estate forecasts for 2017 along with the 10 best real estate markets.
While American home prices have recovered to their precrisis levels, not all regions and types of housing have rebounded to the same extent. Homes valued below $100,000 have appreciated almost 10 percent in value from 2000, while those in the $500,000 to $1 million range have more than doubled.
The regions that benefited from the sharpest recovery in home prices are the West and South. This year, cities in those regions are also likely to see above-average housing gains, although the spoils will be enjoyed by some mid-tier cities.
Zillow said it based its forecasts on a combination of quickly rising home values, low unemployment rates and strong income growth. “Zillow’s 2017 list highlights that jobs and opportunities are increasingly growing in smaller markets away from the coasts,” said Zillow Chief Economist Dr. Svenja Gudell in a statement.
Across the U.S., home values are expected to rise 3 percent this year. Only two of the five largest American cities are forecast to experience above-average gains: New York, where prices will rise 3.6 percent, and Houston, at 3.3 percent.
Los Angeles, the second-largest U.S. city, will see home prices rise 1.5 percent, while No. 3 Chicago will experience 2.9 percent appreciation. Home prices in Philadelphia, the fifth-largest city, will rise 2.8 percent. New York and Houston are the largest and fourth-largest U.S. cities by population.
If it’s your first time buying a home, then you might be asking yourself the many questions that come along during the home buying process. Most questions may be centered around financing– including how and when to apply for a mortgage. This recent article by Eileen Oshanassy of Realty Biz News, shares three things to consider before getting your first mortgage.
Naturally, your credit report will have a great impact on the interest rate you will be paying for your mortgage, but what exactly is in your credit report? The first thing you need to know about is the existence of any mistakes on your record. A lender who has inadvertently placed a negative mark on your report can remove it as well. Negative marks on your credit can cost you a lot of money over the course of a mortgage. Make sure your credit report is accurate.
Your income will have a big influence on how large of a mortgage you quality for, but there are other important factors as well. One of them is your income to debt ratio. A lender will look at how much debt you are already paying each month, and then factor in a mortgage payment. Although each lender has slightly different standards for what is acceptable, at a maximum, it is between 40 and 43 percent of your monthly income. If you currently have a lot of debt, especially credit cards, you should work towards paying them down before applying for a mortgage. Your chances of qualifying will increase after paying down the debts you already have.
It is usually best to prequalify for a mortgagor before you go house hunting. This serves two purposes. The first is that it makes the jobs of realtors easier because they already know your maximum price, so they can narrow down the houses you can choose from. This speeds up the process of buying a home. Secondly, you will know exactly how expensive of a home you can afford. If you don’t qualify for a mortgage large enough to finance the home you want, then you can put off the purchase of a home until you can qualify for a bigger loan. You can focus on paying down some of your debt, increasing your income, or perhaps just saving up for a larger down payment.
As the New Year arrives, so do new trends and changes in the housing market. If you’re looking to buy a new home in 2017, stay up to date on these trends to know what to expect when you buy your home. This recent article by Rebecca Lake of Smart Asset, shares what might be in store for 2017.
Home prices have been on a steady incline in recent years. But that momentum may begin to slow down in 2017. Since the Federal Reserve just raised interest rates for the first time in a year, that could have a stabilizing effect on home prices. The National Association of Realtors estimates that price growth will slow to 3.9%, down from 4.9% in 2016.
For sellers, that may lead to a shrinking profit margin in previously hot local markets. Buyers, on the other hand, may be better positioned to snag a deal on a home in areas where prices have recently skyrocketed.
According to the National Association of Realtors, we could see an uptick in the demand for properties in 2017. Specifically, the NAR is predicting that existing home sales will top 6 million in 2017, which is similar to forecasts from the Mortgage Bankers’ Association, Fannie Mae and Freddie Mac.
The increased push for housing may be driven in part by a growing number of millennials who are venturing into homeownership for the first time. In addition to purchasing single-family homes, younger buyers may buy condos as well.
While big cities are still popular among young adults, many millennials are interested in living in suburban areas. Research from Zillow shows that 47% of millennial homeowners have opted to buy houses in the suburbs, largely due to the lower cost of living that it entails. The amenities that many suburban areas offer are also appealing, even if it means that homeowners have a longer commute.
This trend could be good news for suburban homeowners who are planning to put their homes on the market in 2017. For buyers, the primary advantage of choosing the suburbs over the city is the ability to stretch their budgets. For example, $325,000 may buy you a three-bedroom home in the ‘burbs versus a one-bedroom studio in the city.
