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New Construction Escalation Clause, Explained – Destin, FL

September 5, 2021 by Wendy Rulnick

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.

Filed Under: Things to Know

It’s SOLD! 1415 Baytowne Ci E., Sandestin, Miramar Beach, Florida 32550

September 1, 2021 by Wendy Rulnick

Sold! 1415 Baytowne Ci. E., Sandestin, Miramar Beach, Florida 32550

Factors contributing to the sale:

Pricing analysis was done taking into account the condition of the Sandestin home, which was excellent, but also the non-updated aspects of the home. The kitchen and bathrooms had not been updated since the house was built in 2003. Competing properties were mostly updated, so this was a pricing factor.
Research was done to get the original building plans, as this Sandestin home had been custom built. It had a very angled design and apparently this caused a major square footage discrepancy with public records. The Walton County Property Appraiser website said it was 3323 square feet (a hard to measure home). The building plans said 2935 square feet. I verified this with the original architect, and, of course, we want to be accurate in presentation. Most agents would have just used the property appraiser record. In this case, the actual square footage was lower by almost 400 square feet! Square footage is a major pricing factor.

The home was extremely cluttered. The owners had a lifetime of collectibles and furniture. They were elderly and had to leave the area on a specific schedule. I volunteered to prepare the home for showings, and they gave me free reign after they left. I enlisted the help of my husband, and we spent a day putting away every knick-knack, statue, plate, doily and extraneous piece of furniture. When I showed the photos of the changes to my seller, they could not believe their eyes!
We did not do a “coming soon” listing, as I have seen sometimes delays in sales due to agents being overly ambitious.
I accompanied the photographer to point out appropriate shots with my design eye. Sometimes they don’t catch the “ahhh” angle.
My MLS listing was meticulously documented with all required homeowners association documents. I paid a service to obtain the most up-to-date covenants, deed restrictions, etc., for the three associations – Baytowne East, Raven Oaks and Sandestin.
My documentation also included a raised seal survey, building floor plans, termite coverage information, roof warranty, seller disclosure and more.
I wrote the MLS description keeping in mind only the first 800 characters are seen by a quick-scanning public or other agent. This description highlights fast and beguiling facts about the home, and unique characteristics. Not too fluffy, but creative and descriptive.

When the Sandestin listing hit on the market, there were immediate showings. One produced a full price, as is, cash offer and it was accepted by the seller.

1415 Baytowne Ci. E, Sandestin, Miramar Beach, Florida sold for $965,000.

It’s Wendy… It’s Sold!

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

Parlo italiano.

Filed Under: Sandestin Florida

Scouting out Palm Court Yacht Club Condos, Okaloosa Island, Fort Walton Beach, Florida 32548

August 27, 2021 by Wendy Rulnick

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

Parlo italiano.

Filed Under: Things to Know

Finding the Right Property Takes Detective Work – Destin, Florida

August 25, 2021 by Wendy Rulnick

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

Parlo italiano.

Filed Under: Things to Know

Nice to Meet You – What Was Your Name Again?

August 19, 2021 by Wendy Rulnick

Nice To Meet You – What Was Your Name Again? How frustrating is it, when you greet someone by name on a regular basis and they only say “Hello” back? Or vice versa? You cannot remember their name, so you just say “Hello, how are you?” It feels like something is missing.

Calling someone by name usually brightens their day. Some people don’t find names important (they should!) or they are just not good at name memorization (they often tell me!) Well, you can learn how to memorize names.

I’ve developed a few tricks over the years at remembering names. My need for frequent name memorization stems from a peripheral social circle where I might meet someone and not see them again for a couple of weeks. The contact is brief.

Maybe you have the same type of situation at an infrequent business mixer, with some neighbors you rarely see, or at the gym? After running into someone a few times, there could be a casual interaction, then a more formal “I’m Suzie”, which opens up the “I’m Jack” introduction and a handshake. Then you may not see this person again for quite a while. That makes it harder to remember their name. Or so it seems.

So, how can you memorize names? There are three key methods that you can implement to improve your name recall.

Visual – Use a physical attribute to connect with the name.
Auditory – Make a play on words, use song or rhyme, or another relational tie to the name.
Kinesthetic – Write it down. I make a note with the name on my phone (not in front of them!)

All these aspects of memorization help reinforce the names in my brain. The more imaginitive your association, the better!

Here are some examples:

Abbie – I think “Abbey Road!” (the Beatles). She has red hair, so I have an Irish-English thing in my head.
Sean – Sean works with Abbie, so I connect them as “Irish” – two Irish names, Sean and Abbie! I even repeat it in my mind with an Irish twang.
Dave – Dave is big and tall. “David and Goliath” was my initial trick.
Kenny – my brother’s name is Ken. I mentioned this to Kenny when I first learned his name, and he then told me his niece’s name is Wendy. So that connection embedded pretty fast.
Beth – Beth the beautiful. Enough said.
Sandy – Her daughter, whom I already knew, is “Mandy”! The rhyme sticks (“Mandy – Sandy”)
Kim – looks like Kim Novak, the actress.
Anne – tall with broad shoulders, so Anne – Amazon!

A Couple? – I may use a stronger mental play for one of the names, but then I always say them together in my mind “Sylvia (pictured with her hair over one eye) and Byron”. (Plus the “y” in both names)

Tougher names? I have a new acquaintance named “Avonis”. I had to ask for his name multiple times to hear it right. It rhymes with “Upon Us”. That’s a musical connection.

Writing down the names is important, so you can review them if necessary. That ties in another visual piece to a kinesthetic element.

Finally, I repeat the name in my mind the evening after the meeting, along with whatever mental trick I originally devised. If there were several names, I repeat them all. Doing this, I actually remember people’s names from years ago, people I don’t see any more.

So, the next time someone says “Hello” to you, give them a smile by calling them by name!

It’s Wendy… It’s Sold!

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

Parlo italiano.

Filed Under: Things to Know

“You’ve Been Cancelled!” The Dreaded Florida Homeowners Insurance Letter

August 16, 2021 by Wendy Rulnick

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

Parlo italiano.

Filed Under: Things to Know

A Simple Question to Start a Phone Call

August 12, 2021 by Wendy Rulnick

The other day, a busy start of a real estate morning, I was trying to leave the house. You know those days when you cannot seem to get out of your pajamas, being caught up in emails, internet updates, and text messages from agents and clients? (Confess, you know what I am talking about). Well, it was one of those mornings.

Propping my phone onto my bathroom counter, getting ready for the day, I kept checking my emails. Lucky to jump in the shower at 10:00 a.m. Out of the shower I came, hair soaking wet, the phone rings. Normally, I would not have answered it at that time. Something possessed me to do so. It was a mistake.

Believe me, I welcomed the call from a new buyer client referred to me by a local builder. He was earnest, serious, and quite loquacious. While my hair continued to drip. He explained to me his past real estate projects, construction types, lot requirements, and knowledge of the area. There was no place to pause, and it continued. I scrambled for a piece of paper and maintained my composure. As the frizz started to form on my head that would further explode from the humid day. No flat iron was going to solve this problem.

Which brings me to a simple piece of advice. When starting any phone conversation, after a brief “How are you?”, the added, “Do you have a moment to talk?” should be asked. I always begin my phone calls that way. Variations are, “Are you free?” “Do you have a quick minute?”. When the question is asked, the recipient is “let off the hook”. If they are busy, they will generally say so, with a sense of relief. Then, you can call them back or they can call you back when they are available. If I am asked the question, and I am busy, I explain that I would like to call them back, so I may give them “my full attention”. People appreciate that.

Did I survive the day? Of course. Did my hair look good? Not really.

It’s Wendy… It’s Sold!

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

Parlo italiano.

Filed Under: Etc., Things to Know

Should You Accept a Back-Up Offer on Your House?

August 11, 2021 by Wendy Rulnick

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:

The back-up contract is contingent on the termination of a prior contract.
The back-up contract is effectively withdrawn if the prior contract is not cancelled by a specified date.
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.

Filed Under: Things to Know

“Parlo Italiano” – I Speak Italian! – Destin, Florida

August 10, 2021 by Wendy Rulnick

So, I’ve been studying Italian for ten years. It’s more than a hobby, it’s a passion. As part of my excitement for the Italian language, I have a tag line after my Realtor email signature that says “Parlo italiano” which means “I speak Italian”. This is for the off-off-chance that an Italian speaking person (or magari native!) ever reads one of my emails. Now, the chances of this happening are really slim, as Destin, Florida is not a huge metropolitan area, and I’ve been using that email signature for years.

First, I thought it would be interesting, something different for someone to know about me, and second, I was hoping beyond hope to be able to help an Italian buy or sell real estate in the Destin Florida area. One of my business dreams is to actually work with an Italian, and use some of my language skills.

This morning I received a buyer inquiry about one of my new listings. We texted back and forth, and I promised to email her some information about the property. She emailed back that she was shocked and delighted to read my tag line, “Parlo italiano”! She said she was from Italy, a dual citizen, living in another state! She even emailed me in Italian! I responded in kind, with a huge smile on my face! (Later re-reading my email, I should have concentrated better as I made a grammatical error!) This was the first time I’ve ever had a person comment on my tag line!

Then, a few minutes later, I am not kidding, I received an email from a newly stationed Italian military member at Eglin Air Force Base looking for rental housing. I don’t handle rentals, but wrote back in Italian with information about a rental company who could help him. We exchanged several emails, and I recommended to him, in Italian, a fantastic local “ristorante”, Mimmo’s , where the proprietor is Italian. I told him about the Italian study program in our Niceville, Florida school system. I also invited him and his family to join my local Destin Meetup Group, Parliamo Italiano Emerald Coast. He graciously accepted and said he was looking forward to introducing his “famiglia” to me (all in Italian!).

This was two Italian client encounters in one day! I don’t know where it will lead, but the doors are “aperte” (open)! Vorrei accogliere tutti che parlano l’italiano a mia zona a Destin in Florida!

A presto!

It’s Wendy… It’s Sold!

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

Filed Under: Things to Know

167 Starlight Ln., Santa Rosa Beach Florida Near 30A – For Sale

August 9, 2021 by Wendy Rulnick

Just Listed – 167 Starlight Ln., Santa Rosa Beach, Florida 32459

Plush, exquisite simplicity. This elegant manufactured home has bamboo floors, vaulted ceilings, enchanting lighting, and stylish design throughout. An angled breakfast bar overlooks the living room. The fireplace has a new surround that picks up the muted greys of the kitchen. There is a tile backsplash and new gas oven/range and hood.

The walk-in pantry maximizes storage. Surprises await in the master bathroom with soaking tub. Three bedrooms plus office with French doors with upscale feel.

The outdoor living area elevates lifestyle, with an enormous, captivating screened porch with wood ceiling, cooling shades, ceiling fans, and outdoor gas fireplace. The roof is metal. New air conditioner. The location is prime to enjoy Gulf of Mexico beaches, dining and shopping. Less than 3 miles to famous 30A Scenic Highway.

167 Starlight Ln., Santa Rosa Beach FL 32459 is offered for $299,900.