They say salespeople are not detail oriented. Well, they should be. My picky OCD personality has helped me market, sell, and close many Emerald Coast of Florida properties over the years.  Being picky helps the client.  Correct representation is imperative. Details can be dollars.

Just recently, this picky agent sold a waterfront condo on Okaloosa Island with a boat slip.  Having sold two in the past few months made me dig further when the listing agent said he didn’t know anything about a boat slip transfer fee.   I was concerned, because I knew that there were boat slip transfer fees payable to the Florida DEP upon sale of a property.  I wanted to tell my buyer what this fee would be.  (Calculated at $1,000 x linear foot of the slip x 6% + 7% sales tax ).

The association management company researched the Okaloosa Island condo I was now selling. They said no transfer fee was due on that one, because it was a Florida homestead property, which is a primary residence. I asked for their reference document so I would have it for future use.

I let the title agent know there should be no fee charged to my buyer in this case.

Closing time came.  I had to review the preliminary settlement statement, also called a “Closing Disclosure” or “CD”. Well, gosh, there was the boat transfer fee in the amount of $1600, charged to my buyers! This wasn’t correct.

I notified the title agent and provided my documentation. She said the association manager had given her the figures with their estoppel letter. Hold on there.

I contacted the association manager to remind them that there was no boat slip transfer fee because it was a homestead property.  They corrected their estoppel letter, the title agent fixed the settlement statement, and the fee was removed.

No one had noticed. Not the lender, not the title agent, and not the very association management company who provided the original information.

If the transfer fee of $1600 had been collected and paid to the State of Florida, I doubt someone would have researched it after the fact to recognize this was a homestead property, and that no fee should have been paid. No one would have refunded that money to my buyers.

That is, if no one had noticed. This picky agent did.

It’s Wendy… It’s Sold!

Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call 850-259-0422
Email Wendy: itswendy@rulnickrealty.com

Wendy Rulnick, Broker, lists and sells real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Okaloosa Island, Fort Walton Beach, Niceville, Freeport, Bluewater Bay, Navarre, Florida.

Parlo italiano.

The Florida Realtors/Florida BAR contract for sale and purchase of real estate will change effective November 1.   Important updates to the financing clause addressing appraisals may affect you. Now, the mortgage approval deadline will also include the receipt of a satisfactory appraisal. The previous version of the contract did not have an appraisal deadline.

BACKGROUND:

Appraisals have been backlogged in the busy Destin, Florida real estate market, and all over Florida for the past year. Appraisals, or alternate valuations (for example, “desktop” appraisals, appraiser-assisted, or AVM “automated valuation models”) are part of the mortgage loan process, and how a lender vets a property they are lending on. Appraisals can take two to three weeks, and many assignments are turned down by appraisers due to the increased volume of orders for new purchases and refinance loans.

Appraisals are often paid out-of-pocket by the buyer at the time of the order. This could be between $450 and $2000 or more depending on the house.  Some buyers, upon advice from their agent, delayed having their lender order the appraisal until the home inspection was complete – which could take up to two weeks.  That’s because if they cancelled the contract due to inspection, they would save the appraisal expense.

On the other hand, if they ordered the appraisal right away, then cancelled afterwards due to inspection, they’d be out that money. (With the new Florida contract, that sneaky tactic is about to hit a road block.)

Since the previous version of the Florida FR/BAR contract had NO appraisal deadline, it could be done by day of closing.  If there was a problem with the property under-appraising for lender needs, the entire sale could be threatened. That’s no fun for a seller who just moved a house full of furniture, or a buyer whose lease is about to run out.  As appraisals have become more backlogged, the last-minute appraisal situation has become worse.

Florida Realtors’ solution is to have a date-certain by which the appraisal is complete. That date is the same as the loan approval deadline. You must specify the deadline in the contract, or it becomes the default time period – 30 calendar days (extended to the next calendar day if the time period ends on a Saturday, Sunday, or national legal holiday.)

If the finance and appraisal deadline passes, and there is no extension requested, the buyer can lose his deposit if he fails to close. 

So, what can you do about this new deadline to minimize your risk of losing your deposit?

1. Ask your lender to order the appraisal right away.
2. Find out when the due date is for the appraisal.
3. Find out when your lender expects mortgage approval.
4. Use the later date of the two, based on your consultations with your lender, in the contract paragraph 8b.
5. Ask for an extension should your approval deadline be in jeapardy.

More questions?

It’s Wendy… It’s Sold!

Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call 850-259-0422
Email Wendy: itswendy@rulnickrealty.com

Consult with your attorney for legal advice.

Wendy Rulnick, Broker, lists and sells real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Okaloosa Island, Fort Walton Beach, Niceville, Freeport, Bluewater Bay, Navarre, Florida.

Parlo italiano.

I’m about to list a waterfront lot in Walton County, Florida.  It’s on a rare Coastal Dune Lake.  (Whenever you speak of “Coastal Dune Lake” in Florida, the word “rare” usually accompanies it.)  Yesterday, I walked the lot for the first time. The sellers are not local, so I went by myself, a bit furtively, so the neighbors would not think anything was amiss.  It was breathtaking strolling down to the water’s edge.  There were mature trees and cleared underbrush.  I could see someone loving this setting for their new home.

Now my research begins on price and preparation for putting the lot on the market.  Here are some of the steps involved:

• What is the lot size? Does seller have a survey? YES!
• What marks the lot boundaries? A certain tree? An iron pin? A fence?
• Who maintains the road? This particular road is not paved. Do the owners have a road maintenance agreement, does no one maintain it (this happens in Florida), or does Walton County? Walton County has a link on their website that shows publicly maintained streets. When in doubt, call Walton County Public Works.

• Is public water or sewer available and hooked up? If not, what would be the cost to hook up? These are called “tap” fees.
• Is there an existing septic tank and well? If so, where are they located?
• There’s an old mobile home on the lot. Will the sellers be removing it prior to the sale?
• Are there wetlands on the property? Better yet, does the seller have a wetlands or environmental study? Preliminary wetlands research can be done on the Walton County GIS website.

• What is the zoning for the property? Is it subdividable? You can also find out on the Walton County GIS website.
• What is the FEMA flood zone of the property?
• Is the property in a Coastal Dune Lake Protection Zone? If so, what are the building restrictions?
• Is there a Homeowners Association? What are the costs? Is membership in the association required or voluntary? If there is an HOA, what are the rules and regulations?
• Are there covenants and restrictions? Ask the seller, check public records on Walton County Clerk of Courts, or ask the existing HOA.

• Who owns the property on either side of the lot? Is it improved, that is, with a house or structure on it, or is it “green space”?
• Who owns the property across the lake on the other side? There appear to be only trees, but could this be developed? (A buyer might ask).
• What are the nearby amenities, public parks, beach accesses, and future plans?

This is just the beginning of my research for my Walton County, Florida, lot seller. With these answers, the listing will be properly prepared for its introduction to the market. Then I won’t have to sneak around!

It’s Wendy… It’s Sold!

Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call 850-259-0422
Email Wendy: itswendy@rulnickrealty.com

Wendy Rulnick, Broker, lists and sells real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Okaloosa Island, Fort Walton Beach, Niceville, Freeport, Bluewater Bay, Navarre, Florida.

Parlo italiano.

Having recently sold a new construction home in Destin, Florida, I was not surprised to review the builder contract and find an “Escalation Clause for Specified Building Materials”.  My buyer client had not read the contract carefully, and as we sat with the builder to finalize the sale, I brought it up.

What is this new construction cost escalation clause, and why is it used?

Building construction material costs have been rising for more than a year, since the beginning of the COVID pandemic.  Lumber and steel production declined and housing demand increased. Home remodeling projects skyrocketed from people working from home. These factors, as well as tariffs on imports and labor costs, caused the price of lumber and other construction materials to rapidly increase.

Overall:

Building materials prices have increased 22.5% year-over-year.

Steel products costs are up 59% in 2021

Softwood lumber prices are up 81% 

The cost of a new home has increased on average by $30,000 due to the price of lumber alone.

Since construction materials prices are considered “volatile”, builders are adding clauses to their contracts to cover unexpected price increases during construction.  This is called the “Escalation Clause for Specified Building Materials”, or a version thereof.  So, instead of being locked into the contract price for a new home, and stuck with the extra and unknown materials cost increase, the risk is being passed along to the buyer, or partially shared by the builder. It’s being used in about 47% of new construction contracts.

In the case of my recent Destin new construction sale, the buyer would be obligated to pay up to 4% more for construction materials, should their cost increase by more than 6%. The initial cost increase of 6% would be paid by the builder. If the cost of the materials went up more than 10%, the buyer could pay the overage or terminate the contract.  He would, however, lose his deposit. (Why? Because the builder will have already incurred costs in construction on buyer’s behalf, including and considering the builder’s time, design fees, permitting, lot preparation, paying subcontractors, and more.)

Variations to the Escalation Clause for Specified Building Materials include using a percentage increase of the overall base price of the home as a benchmark, or, as mentioned, using specified building materials cost increases. These extra fees may be paid at the time of the materials purchase or when the home is complete, and the sale closes.

You should read your new construction contract carefully to find out if you will be responsible for paying materials cost increases, at what limit, what happens if the limit is exceeded, and when payment will be due.

It’s Wendy… It’s Sold!

Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call 850-259-0422
Email Wendy: itswendy@rulnickrealty.com

Wendy Rulnick, Broker, lists and sells real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Okaloosa Island, Fort Walton Beach, Niceville, Freeport, Bluewater Bay, Navarre, Florida.

Parlo italiano.