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.

Sometimes it’s good to pre-scout what properties you are showing buyers in Fort Walton Beach, Florida. I recently sold a Palm Court Yacht Club condo on Okaloosa Island, but I hadn’t seen it yet. The buyers, long time clients of mine, knew of the building and when a tempting listing came on the market, they made an offer based on the photos. It got accepted and is now “pending”.

Since they are coming into town, they wanted to see the unit in person, and I’d never been there. I’ve sold a lot of condos and houses on Okaloosa Island, but not in this complex. So, I decided to take a look to get the lay of the land and be prepared for my buyers when I actually showed them.

As I approached the Palm Court Yacht Club complex, I noticed was there were two ways to enter.  One was up a very high ramp and the other was into a lower parking garage. Which way to go? Panic set in.  I was glad I was checking this without the buyers first.  I decided to park in the lower garage. All the spots appeared to be marked, so I just picked one, hoping that an ornery owner would forgive a panicked-looking real estate agent holding her MLS sheet.

Then I searched for the elevator, and pressed “2” for the second floor. It stopped and a man got in.  Then I pressed “2” again.  The LED flashed “3” and the doors opened. No one was there. I pressed “2” again.  The doors opened again.  The LED display was still “3”.  I said to the man “The elevator has a mind of its own”.  Then I noticed that the wall had a “2”, but the elevator LED was wrong. I checked out the unit location, going down a hall with no lights. Now I went to scout out the boat slip, map in hand, wandering all around to find it. Success.

I paused and enjoyed the warm breeze of Santa Rosa Sound and the relaxing view of the water.

 

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.

I always said that in another life I would be a detective. Well, sometimes being a real estate agent is like being a detective.  To help different types of buyers in Destin, Florida requires varying degrees of investigative work.  Here are some examples of recent “cases”.

Cold Case – Buyer #1   He lives out of state, doesn’t know the Emerald Coast, and sends me an email: “Are homes going over or under list price?  I am starting to look at the area.”  I ask, “What area?”  There are dozens of markets around Destin, Florida. “What type of property? House or condo? What price range?”  This general buyer just starting to look doesn’t know what he wants.  He’s a harder puzzle to solve. He’s not ready to buy. I ask questions, but this file goes into the cold case folder until I get answers.

Hot on the Trail – Buyer #2  He knows exactly what he wants. It is a specific Destin condo complex, and it must be a two-bedroom unit facing west with sunset views.  I have an investigative method to help this buyer.  I set up an online search, notify my real estate colleagues, make phone calls, post needs on private Realtor websites, and keep an eye on that complex. I might even send letters to the condo owners or check expired listings to see if any unit meets the requirements for Buyer #2. I stay hot on the trail.

Mystery Case – Buyer #3  I am given clues.  This buyer wants a second home that can be rented out occasionally. It will eventually be a retirement home.  It must be no more than four bedrooms in a less congested area of Destin, Miramar Beach or Santa Rosa Beach. The house must be remodeled or newer. It would be nice if the home were in a gated subdivision, and even better if it had a little land. If the home had a stylish quirkiness to it, that would be a plus. The price range is $1.5 to $2 million.

I must use honed detective skills to help this buyer.  I have to scout out subdivisions that allow rentals, but have a primary residence “feel”. Many of the second home or primary residence gated subdivisions around Destin do not allow short term rentals, so I will eliminate those. I have to find a house that has a bigger lot (over a quarter-acre to a half-acre is considered a bigger lot). I have to find homes in a less congested traffic zone (not easy in Destin, Florida). And finally, I must analyze all the photos of the potential listings to know what condition the home is in, and even check it out in person, to see if it has a suitable quirkiness to excite my buyer.

The detective work in finding the right property is actually fun. Each case is different. Some are more challenging than others. Sometimes clues point me in the right direction fast, or it  may be a false trail.  I often use my intuition, but my ears are always attuned to gathering more information.

As for tomorrow, I don’t know what will come across my desk, but with street smarts, experience, and creativity – the case should be closed.

 

 

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.

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I recently wrote about our homeowners insurance doubling on one of our Destin Florida area houses. When I opened my mail the other day, I got another insurance cancellation notice! I said “Oh no, this cannot be happening again!” The insurance company for our primary residence, Gulfstream Property & Casualty Insurance, just went out of business, with $35 million in underwriting losses it could not sustain. That left us and 33,000 other Floridians scrambling to get new insurance, right before the start of hurricane season (as I sit here now awaiting a Tropical Storm!)

After I got the cancellation notice, I contacted my Florida homeowners insurance agent to find another policy. He got quotes from eight companies, and the most reasonable was 71% higher than our previous coverage!  That’s from $2460 per year to $3460 per year. Other policies were as much as $7500, or more than triple. We had no choice but to accept the new policy.

“What the heck is going on with Florida homeowners insurance prices?” I asked my agent. “It’s scammers!”, he told me. How do these insurance scams work?

Basically, “runners” will target neighborhoods in Florida looking for houses with a little wear and tear on the roof.  They may go door-to-door, put out flyers, or post signs that say “Free Roof Inspections”. Even if the roof is good, they tell homeowners that they can get a free new replacement roof by filing an insurance claim. They will do all the paperwork, and may pay the insurance deductible for the homeowner. They may also give the homeowner a gift certificate to participate.The homeowner then signs a contract and “assignment of benefit” which allows the roofing contractor and the attorney involved in the scam to file an insurance suit stating the roof was damaged from a previous storm. The assignment of benefit allows them to receive any monetary award as a result of the claim. They may go so far as removing shingles and starting the roof job, so that the insurance company’s adjuster cannot verify the previous condition of the roof.

When the claim is settled, the attorney behind the fraud can receive what’s called a contingency fee multiplier. This could be double, ten times, or even 30 times the monetary damages the homeowner (whose benefits are now assigned) wins. For example, one 2019 case paid the attorney $700,000 on a $35,000 claim. Florida is the only state in the nation that allows these multipliers on insu rance claims. Florida has 76% of the homeowners insurance claim litigation in the country, losing $1.5 billion last year.

What’s happening as a result of these fraudulent claims? Florida insurance rates rise for everyone.  35% of the hidden cost of a policy is to cover the insurer’s expense in fighting this scam litigation. Insurers don’t want to cover homes with roofs older than ten years, because those are more likely to be targeted in a scam.  So, in order for a homeowner to keep their insurance, or to cut the cost, they have to pay to replace a perfectly good roof that’s a little old.  This is a feeding frenzy that benefits only the roofing contractors, shingle manufacturers (who teach seminars in how to get insurance companies to pay), and scammer attorneys.

Recent Florida legislation, SB76, was passed to help fight the insurance fraud and lessen insurers’ risk. It limits the originating date of claims to be within two years from the event, versus three, has litigation stipulations which may reduce awarded amounts and attorney fees, and makes it illegal to solicit homeowners with prohibited advertising. The legislation will probably not reduce Florida insurance rates soon, as it’s criticized as not going far enough. It does not eliminate the contingency fee multiplier that can pay out huge damages to the attorney.

And as for stopping illegal solicitation, I just saw another “Free Roof Inspection” sign go up in my neighborhood.

 

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.

Should you accept a back-up offer on your Destin Florida property, and what is it?

I recently placed one of my Destin listings under contract. It’s a fast market, so the house went “pending” in one day. The offer was great, for cash, with a strong price and a fast closing.  Of course, I had received several inquiries and showings as soon as it was listed. One agent whose buyers didn’t move fast enough, asked if they could put in a “back up offer”.  What does that mean, exactly?

In Florida, you can write an offer for real estate with a “back-up” contingency.  It says, in a nutshell:

1. The back-up contract is contingent on the termination of a prior contract.
2. The back-up contract is effectively withdrawn if the prior contract is not cancelled by a specified date.
3. The buyer can withdraw the back-up contract at any time prior to notification that the primary contract is terminated.

How does a back-up contract benefit a seller?

A back-up contract obligates you to sell to the secondary buyer should the first offer fail to close. The failure to close could be for various reasons, such as: the buyer cannot get financing, the house does not pass an inspection, the buyer backs out, etc.

But why would you want to be tied in to a second contract? If you are, you will miss any potentially better offer that might come in.  Let’s say, however, that the back-up contract has fantastic terms, like a strong price, cash, and few contingencies. Even then, the back-up buyer can withdraw his offer at any time prior to moving into first position. It’s really an “option” to actually become the primary contract.

So, it just ties you in, and the back-up buyer is in control.  That’s to the buyer’s benefit, and not yours.

 

It’s Wendy… It’s Sold!

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

This is not construed to be legal advice. For contract questions, consult an attorney. 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.