home Inspections

Florida Closing Cost Primer for Buyers

Closing costs are inevitable when you’re buying or selling a property. While they vary from state to state, the amount you’ll pay in Florida depends on both the property and the county it sits in. As a buyer, you’ll have to cover most of the fees and taxes. In Florida, you’ll also have to post a fee for documentary stamps (or doc stamps), which is a percentage of the sales price. Then there are the taxes. You’ll likely be subject to property and transfer taxes.

Neither party is responsible for 100% of the closing costs in Florida, which includes fees, taxes, insurance costs and more. The buyer typically pays between 3% to 4% of the home loan’s value and is responsible for the bulk of the fees and taxes. The seller usually pays between 5% to 10% of the home’s sale price. Closing costs also vary among counties.

Condos are regulated by the Florida Condominium Act. The legislation lays out your rights to the property and gives you an “undivided interest” in all the common areas of the building. You’ll have to pay a monthly maintenance fee or a yearly homeowners association fee to cover the servicing of those areas that fall under the “undivided interest.” The fee isn’t tax-deductible.

If you are getting a mortgage The fees shown on the Good Faith Estimate can be difficult to understand but can be broken down into five sections.

One-time fees

Appraisal fee
Reinspection fee
Credit application, credit report and credit supplement fees
Mortgage origination fee
Lender’s title insurance policy (optional owner’s title insurance)
Escrow fee
Home inspection fee (optional)
Closing attorney fee
Courier fee
Bank processing fee
Recording fee
Notary fee
Loan discount points

Recurring fees

Homeowners insurance
Property taxes and tax servicing fees
Mortgage insurance premiums
Flood certification fee (in some areas)

Appraisal fees

Lenders typically require an appraisal as part of the underwriting process, before financing a home purchase. Appraisals will vary in price depending on the location and size of the property. The lender hires an appraiser to provide the fair market value of the home, and the buyer pays the lender.

Mortgage origination fee

Every lender will charge a mortgage origination fee, which covers their service and administrative costs. The average loan origination fee is 1% of the total loan amount. Buyers should shop for lenders with both experience and low origination fees.

Title insurance policy fees

Lenders typically require borrowers to purchase insurance to protect the financial institution from future title claims. This policy is called lender’s title insurance and the cost depends on the location and size of the property.

Owners title insurance protects the Buyer from future claims against the title. The customary party that pays for the Owners Title Policy varies by County in Florida. In Sarasota,Collier, Miami-Dade and Broward County, the Buyer pays for title insurance and chooses the title company. In all other counties, it is the Seller’s responsibility.

Escrow fees

During the purchase and sale transaction, your funds will enter a holding account managed by a third party — an escrow company. When the transaction is complete, the escrow representative will disperse your down payment, fees, and loan proceeds to the appropriate individuals.

Home inspection fee

A home inspection is a common contingency for a home purchase. As the buyer, you can hire an inspector to evaluate the condition of the home and its systems prior to purchase. Home inspection costs vary depending on the size and age of the property. You will pay the inspector for their service out-of-pocket, and this amount is separate from the purchase and sale transaction.

Attorney Fees

Florida is a Title Theory state and does not require that an attorney be used to close a real estate transaction. Private real estate attorneys, or borrower’s attorneys, are an additional and optional cost for buyers who want a specialist to assist them with contract-related issues or professional advice beyond the scope of their agent’s abilities. Private real estate attorneys charge by the hour or charged a fixed rate for the transaction and rates vary based on their level of expertise and services provided.

Documentation fees

During a financed home purchase, several institutions need to process information and create official records.

The courier fee allows lenders to send your documents to necessary parties
The bank processing fee pays the bank for handling the necessary loan documentation.
The lender uses the recording fee to pay the county to file a public record of the transaction.

Loan discount point fees

When locking your interest rate with your lender, you’re allowed to buy down the rate. To do this, you pay “points” — essentially, paying interest in advance. One point is equal to 1% of the loan; but that does not translate to a 1% drop in interest rate. Not all buyers choose to buy down their interest rate, but when they do, the rates vary by lender.

Homeowners’ insurance

As a stipulation of your financing, you will be required to purchase homeowners’ insurance. You will continue to pay the insurance premium on a yearly or twice-yearly basis directly to your insurer, or monthly via an escrow payment that is part of your monthly mortgage payment to your loan servicer. Homeowners insurance policy fees range based on the amount of coverage and the size of the property.

Property taxes

Your property taxes will be prorated based on your closing date. Some buyers pay their taxes in lump sums annually or biannually. If you don’t pay this way, you might escrow the taxes, which means they would be included as an escrow line item in your monthly mortgage payment to your loan servicer. Property taxes are paid in arrears in Florida.

Mortgage insurance premiums

If your loan amount is more than 20% of the value of the home, you are typically required to pay insurance to protect your lender’s investment. Mortgage insurance is generally escrowed but may vary from lender to lender. Some lenders will also charge a one-time application fee for mortgage insurance.

Flood insurance

Depending on the location of your property, you may also be obligated to purchase flood insurance to help protect your lender’s investment. Flood insurance policies range by risk level, based on location and are a Federal Program and the pricing cannot be competitively shopped for.

What are the closing costs for cash buyers?

Cash buyers are still required to pay for things like notary fees, property taxes, recording fees, and other local, county and state fees. Unlike a buyer who is using financing, cash buyers won’t have to pay any mortgage-related fees. But most cash buyers still opt to pay for things like appraisals, inspections, and owner’s title insurance.

Closing costs can vary depending on where you live in Florida, the type of property you buy and how much it sells for. While the seller forks over some money, the buyer pays for the bulk of the fees and taxes, which typically add up to 2.5% of the average sale price depending on the time of year you close ( proration sensitive).

Filed under: 2022 Real Estate, appraisal, Blog, Boca Raton real estate, closing costs, contracts, Exclusive Buyer Agency, Exclusive Buyer Agent, First Time Homebuyers, Flood Insurance, Florida Real Estate, Foreign Home Buyers, Home Buyer Advice, Home Buyers, Home Financing, home Inspections, Homebuyer Advice, Homeowners Insurance, House Closings, Mortgage Information, Mortgage Interest Deductions, Real Estate, Real Estate Closings, Real Estate Investment, real estate news, Relocation, South Florida Real Estate, Tax deductions, Title Insurance, Uncategorized by Kim Bregman
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“Buyer Beware” of Newly Renovated Homes

‘Renovate’, according to the Merriam-Webster Dictionary means “ renew, restore, refresh, and rejuvenate all mean to make like new.” When the phrase “completely remodeled or renovated” is used in the description of a listing, many homebuyers expect the entire house to be completely updated. But in residential real estate, a house advertised as “completely remodeled” may have several big-ticket items, such as the roof, HVAC system, appliances, pool, and windows that are either original or close end of their useful life.

This is particularly true with investor “Fix and Flips”. Buyers may find a newly flipped home more appealing because much of it feels new – but not all flips are the same. In any given price range, every property you’re going to look at will have its pros and cons. You certainly don’t need to avoid properties that are being flipped, but there are some things to watch out for if you’re looking at one.

You can easily tell if the home is a flip by looking at the property records. If the home is back on the market just a few months after being purchased by a new owner, odds are it’s a flip. Flipped houses may seem up-to-date on the surface, but shiny new finishes can sometimes mask shoddy work. If you’re looking at a property that is being flipped, you’ll want to be sure to get it thoroughly inspected before you close and set aside money for any problems that may crop up because of renovations that were done on a tight budget and by an unlicensed contractor.

“Let the buyer beware” or “Caveat Emptor” exists for a reason. Home inspections do not necessary note the useful life left on roof, appliances and ACs since they are only checking to ensure that they are in “working order and free of defects”. With that in mind, here’s what to look for when a home is described as “completely remodeled” or represented as “new”.

Electrical:

The standard for household power used to be 60 amps. Today modern homes need as much as 200 amps to run all the electrical needs. High-definition televisions, computers, air conditioners, generators, and home automation devices require lots of power to run. Have a home inspector check the entry cable coming into the house and the electrical panel. If the house has original or outdated wiring, consider upgrading for safety and function purposes.

Electrical outlets all under the electrical upgrade category but it’s important to pay close attention to the electrical outlets in a home. We still see the old-fashioned 2 prong outlets in older homes. These older outlets do not have the ground wires to protect people and electrical devices in case of a fault. Today’s modern houses should have the 3 prong outlets for safety and function purposes. In kitchen, bathrooms, and exterior locations, look for GFCI outlets. These outlets protect against electrical shock. They have a test and reset button. GFCI’s are now code in all new construction.

Roof:

Depending on the size of a house and the style of shingles, a new roof can cost between $50-$100 per square foot of roof or more. The age of a roof is a very important consideration when buying a house. Your Exclusive Buyer Agent will find out from the Seller the age of the roof or will run a permit search in advance of writing an offer. If you move ahead with the purchase of the home, make sure your home inspector gives you an estimate on the remaining life of the roof not just how old it is.

. GFCI’s are now code in all new construction.

Water Heater & HVAC:

Most water heaters and AC units have an 8- to 12-year lifespan. If the heater is a high-quality water heater, it may last longer. Take a picture of the HVAC label and Google it to determine the age. If the unit has been well maintained, there will be a label from an HVAC company with service dates. Again, this can be done when you are touring a home. If you decide to purchase a house and schedule a home inspection, the inspector will confirm the age and condition of the HVAC unit and water heater.

Plumbing:

Plumbing problems can be very expensive. When you are touring a house that you like, turn on the faucets to check pressure. Look under sinks for signs of water issues. Look up at the ceiling to see if there are any stains. You can’t always see a plumbing problem but it’s a good idea to ask the seller if they have a record of plumbing maintenance, past leaks or insurance claims.

Foundation:

Look at the house exterior for signs of moisture or cracks. Examine the landscaping to see how well the yard is graded. Water should be moving away from the house, not toward the foundation. Again, this advice is for homebuyers as they tour a property of interest. Does the home have gutters directing the water way from the property?

General Warning Signs:

Seller has a spotty memory ….
Or says things like, “I haven’t lived here long.”
Offers no real estate disclosure form
New paint, tile, or flooring here and there

Landlords, flippers, and rehabbers often claim they don’t know a property well because they haven’t lived there — but all of them know a building’s ins and outs better than the buyer, especially if they have done work to the property.

Almost all states have a disclosure form where sellers address a property’s age and condition; its water source; the nature of its sanitary sewer system; and any structural defects, as well as matters such as lead paint or termites.

Florida, has a “Caveat Emptor” or “Buyer Beware” rule, which still requires the seller or seller’s agent to disclose anything that impacts the buyer’s health or safety but only if asked. In the case of a transactional agent, only if they have asked the Seller to tell them. There is no legal obligation to fill out a Sellers Disclosure Form and many Transactional Brokerages have a policy to NOT provide one.

What To Do:

Read the home inspector’s report carefully, including between the lines when the inspector uses phrases like, “a lot of issues” or “a major issue.” Ask your exclusive buyer agent to prod the sellers for more details. If the inspector couldn’t access certain places, ask why.
Ask for a disclosure form. Push for more answers to your questions. When a listing agent refuses to provide the standard disclosure form, I put all the questions in the form on an email and make it an Exhibit to the contract. The Seller has a legal obligation to answer questions asked directly.

Warning Sign #1: Cosmetic Cover-ups:

Fresh paint is a wonderful way to mask deficiencies. Paint can cover cracks in the walls or ceilings, mold, and water stains. New bathroom and kitchen tile hides cracks and structural damage. New carpeting is a recommended fix to cover floor tiles containing asbestos, poor sub-floors or previous leaks, but buyers likely still want to know what’s underneath.

What To Do:

Ask for receipts, permits, warranties and other documentation, such as photos taken during the renovations to authenticate that the work was done properly.

Warning Sign #2: Downplaying Problems:

Some sellers opt to move once a house reaches a certain age and requires major investment in maintenance and replacements.

Phrases like, “It’s always been that way,” “That’s not a big deal,” or “Show me a house that doesn’t have a problem.” ” It was that way when we bought it”

While these statements might be true, they can be indicators of large problems.

What To Do:

Look for signs of irregular maintenance, such as dusty air vents, old filters in the AC system, clogged gutters, and dying grass, just to name a few. Politely but firmly ask for more details, receipts, and documentation about anything the homeowner waves away.

Warning Sign #3: Camouflaging Decor

Some buyers will try to disguise things they can’t fix with whatever’s at hand. Large area rugs hide defects in flooring. Artwork hangs over wall cracks and holes, and strategically placed landscaping hides exterior foundation cracks. Acid washing a pool will delay determining the age and condition of the finish. Candles and air-fresheners can mask odors of nicotine, mold, pets, and other musty smells that a homebuyer might not detect until they move into the home. Having the music playing inside or outside the home can mask road or airport noise.

These items may be discovered at walk-through but by that time you have a loan in place and have lost weeks and waived your contingencies. It will then be a fight to secure credits at closing or close in escrow.

What To Do:

Ask to turn off the music or remove the scents and return at a later date during the inspection period.
Request that items be cleared from walls and garage to accommodate the inspector.
Don’t be rushed though the final walk-through. Is there anything that has deteriorated since the inspection? Anything that was hidden or unobservable?

Fix It, or Forget It?

It if the inspection uncovers things the seller didn’t originally disclose or explain in detail, you legally have the right to cancel the contract during the Contractual Inspection Period…..never waive this contingency. You and your agent also can negotiate for the seller to do the repairs or reduce the price so you can handle them yourself.

Filed under: Blog, Boca Raton real estate, contracts, Exclusive Buyer Agency, Exclusive Buyer Agent, First Time Homebuyers, Home Buyer Advice, Home Buyers, home Inspections, Home Maintenance, home safety, Homebuyer Advice, Real Estate, Real Estate Investment, real estate news, South Florida Real Estate, Uncategorized, What Buyers Should Check When Buying an Older Home by Kim Bregman
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Caveat Emptor- Buyers Beware!

Caveat Emptor, “Let the buyer beware.” is a real estate principle that warns buyers to “beware” and do their due diligence. It is of paramount importance, for Florida real estate buyers, since the majority of real estate agents are transactional agents. When a purchase contract for property says the buyer is to take the property “as is,” the seller truly means “as is.” Under the doctrine of caveat emptor, property buyers are held responsible for inspecting the quality and condition of the land or building before the final execution of the purchase contract.

If the buyer does not exercise due diligence during the Inspection Contingency Period and fails to examine the property, then the seller is shielded from liability for any defects. Additionally, the burden of proof is on the buyer to show that the seller actively concealed a material defect.

Florida courts continue to adhere to caveat emptor, which was reaffirmed in the Florida Fourth District Court of Appeals decision for Florida Holding 4800, LLC v. Lauderhill Mall Investment.There are three exceptions to the caveat emptor doctrine in Florida, including (1) where the purchaser has been prevented from making an independent inspection of the property due to a trick or artifice, (2) where the purchaser does not have an equal opportunity to become apprised of the fact, and (3) where one of the parties attempts to disclose facts and fails to reveal the whole truth. Nonetheless, these exceptions are difficult to claim in court because the buyer has the burden of proving that the seller actively hid the material fact to sidestep any “as-is” language of a contract. Additionally, oral representations by the seller regarding the property’s condition are explicitly contradicted by any “as is” language in the written agreement. This notion rests on the buyer’s inherent ability to inspect the property and withdraw from the property agreement if the quality of the land or building does not meet their expectations.

There are two forms of representation available under a Broker license held by a real estate professional according to Florida law: the Single Agent and the Transaction Broker. These two relationships entitle the buyer or seller to different upheld duties by the real estate professional. Full disclosure applies exclusively to single agent brokers. Limited confidentiality is a transaction broker duty.

A Single Agent is defined by Florida Statutes Chapter 475, Part I as a broker who represents either the buyer or seller of real estate, but not in the same transaction. It is the highest form, providing the most confidence to the customer that the Realtor represents only the customer’s interest. In the case of an Exclusive Buyer Agent the buyer is their CLIENT and the single agent owes the buyer a fiduciary duty.

https://www.optimaproperties.com/buyer-representation/

The duties of a single agent that must be fully described and disclosed in writing to a buyer or seller in agreements for representation include the following:

Dealing honestly and fairly
Loyalty
Confidentiality
Obedience
Full disclosure
Accounting for all funds
Skill, care, and diligence in the transaction
Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing
Disclosing all known facts that materially affect the value of residential real property and are not readily observable

Disclosure of these duties must be made before or during entrance into a listing/representation agreement, or before the showing of property.

A transactional agent is defined as a real estate agent who provides limited representation to a buyer, a seller or both, in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent.

Section 475.278(1)(b), Florida Statutes, presumes that a licensee is operating as a transaction broker, unless the customer and broker establish a single agent or no brokerage relationship, in writing.

Most U.S. states now require a Sellers Disclosure Form, often called “disclosure notices,” “property disclosures,” or “property condition statements.” On these forms, sellers must advise the potential buyer of any material defect they’re aware of in the home — usually within a few days of finalizing the purchase agreement or sales contract. Filling out this form is NOT a legal requirement in Florida and many real estate transactional brokerages are taking the position that they are not going to provide a written disclosure from the Seller.

Before deciding to finalize a Contract for Sale the Buyer is provided with an Inspection Contingency Period. You are advised to include some of all the following in your due diligence.

· Conducting professional inspections of the building and its systems. This could include roof inspections, electrical inspections, HVAC inspections, WDO Inspections, and more.

· Reviewing the property’s records, including its past owners, title, deed, property survey, and other important documents. Make sure to look for past code violations, too.

· Having the property’s value professionally appraised. Your lender might require this anyway if you’re financing the property.

· Reviewing the property’s compliance with local zoning and land-use regulations.

· Having an environmental assessment conducted on the lot and the building. Are there hazardous materials in the building, like lead-based paints? You’ll also want to know if the property is in a flood zone.

· If you plan to renovate the property you’re buying, bringing in a contractor or consultant is also a smart move. You’ll want to assess the property’s condition as well as the potential repair costs and structural feasibility of the project.

As a home buyer in Florida, you should only seek out an Exclusive Buyer Agent. They owe you a fiduciary duty and are charged with full disclosure of all known facts regarding the property, community and hold your interest in strict confidence. They will work for you to get all the answers you need to make a valid and informed purchase decision.

Filed under: Blog, Boca Raton real estate, contracts, Exclusive Buyer Agency, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Foreign Home Buyers, Home Buyer Advice, Home Buyers, home Inspections, Homebuyer Advice, House Closings, International Home Buyers, International investors, Real Estate, Real Estate Closings, Real Estate Investment, real estate news, Real estate trends, Relocation, Retirement, South Florida Real Estate, Title Insurance by Kim Bregman
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How To Win A Bidding War!

A bidding war is when at least two prospective buyers have made legitimate offers for a home that are similar and the Seller wants to select the best offer and terms for themselves. Bidding wars are common—in most of 2020, over half of home offers presented have faced competitive bids, according to Redfin’s study. Although historically low interest rates have sparked buying activity recently, some neighborhoods are always sought-after and attract multiple offers whenever a home comes up for sale. Exclusive Buyer Agents are experts in winning bidding wars and getting credits during the due diligence period.

Expect to be in a bidding war In a hot housing market, it’s often not enough to quickly make an offer on a house but to have the highest price and best terms.

Here are a dozen ways you can get an edge on the competition.

Offer to Pay in Cash

If you have the ability to offer an all-cash bid, you gain a distinct advantage because you eliminate the possibility of a mortgage falling through before closing. Buying with cash will make the process go quicker because you won’t need to go through the approval process with a lender, who would also request an appraisal. If you can’t cover the entire purchase price in cash, you could agree to a larger down payment on the house, which increases your approval odds and might make your bid more attractive.

Get Pre-Approved

Pre-approval is a step most buyers will take anyway, but it’s absolutely essential for anyone in a competitive bidding situation. Pre-qualification is not enough, as it doesn’t show that the lender conducted the same amount of due diligence—such as checking your earnings and doing a hard credit check—that a pre-approval would require.

Know Your Financial Limits

When you’re preparing for a bidding war, think of it like an auction—you need to know how much house you can afford before you actually bid. Once you know the maximum amount you’re willing to bid, you can include an escalation clause in your purchase offer to ensure you can instantly counteract any other bid. An escalation clause lets you increase your bid to avoid being outbid by another buyer up to a specified amount.

Provide More Earnest Money

Buyers typically provide 1% to 5% of the purchase price as earnest money—a form of a security deposit—in a purchase contract, which gives sellers the assurance that you will follow through with the purchase. If you bail out on the contract without citing a contingency, you will likely lose the earnest money. If you put down more than the typical earnest money amount, it will tell the seller that you’re determined to follow through to the closing.

Be open to making offers sight-unseen

Speed is key in a seller’s market as competitive as this one. If you’re interested in a home but live far away or just haven’t been able to tour it, you can still throw your hat in the ring. Video tours and 3D walk-throughs have made sight-unseen offers much more feasible. Almost two-thirds (63%) of people who bought a home last year made an offer on a property that they hadn’t seen in person.

Remove Some or All Contingencies

When you make an offer to purchase a house, you know the deal could fall through for numerous reasons, and you don’t want to lose your earnest money because of it. That’s why you include contingencies in the purchase contract; if the home inspection uncovers major problems or you can’t sell your current home in time to close on the new one, you can get out of the contract without penalty. Almost no offers contingent on the sale of a home will win a bidding war. Sell your home, rent and then start trying to get a home under contract. Simultaneous closings are so 1990’s.

If you can’t waive contingencies, sweeten them for the seller. Opt to expedite the contingency timeline.

Be Flexible on the Move-in Date

First-time home buyers and those who have already sold their previous home might be in a position to be flexible with the sellers on their move-in date. A seller might ask for more time if they have concerns about potential delays for a new home build. In this case, they could go through the closing and then rent the home back from you for a few weeks or a month. This flexibility could be as valuable—if not more valuable—than a higher bid on the house.

Start low, bid high

A lot of successful buyers today win by making an offer that exceeds the asking price…in fact it is expected. This also means that a lot of buyers end up exceeding their budgets. To prevent this, only search for homes that are listed 10-15% below what you can afford, so that you can make an over list price offer.

Offer to pay some of the seller’s costs

Home buyers can make their offers more competitive by offering to pay for expenses that are typically covered at least partially by the seller.

Write a Personal Note

Home sellers, especially ones who have lived in a home for a long period of time, can sometimes be swayed by a personal note that explains why you believe this is the home of your dreams. For example, you might know that the current owner raised a family in the home, and you can discuss how you hope to do the same. It might seem a bit over the top, but it’s certainly worth a try when not much separates your offer from others. And yes—sometimes it works. Avoid putting any personal information in the letter that may expose the Seller of real estate agents from violating Fair Housing laws.

Prepare to lose before you win

With more than half of offers facing competition these days, it’s more likely than not that you’ll get into a bidding war if you’re in the market for a home. It’s also wise to know when to walk away. It’s OK to put your search on hold if you reach the point where you’re not comfortable making the aggressive offers that are often necessary to win in today’s market. You don’t want to end up with buyer’s remorse, after all.

Use an experienced Exclusive Buyer Agent that has been successful with winning bidding wars and speak with their references. Be prepared to ask to be in a Back Up position if you lose the bid. The market is too competitive and offers move too fast for novices to be effective at winning bidding wars in a multiple offer situation.

Filed under: Blog, Boca Raton real estate, contracts, Exclusive Buyer Agency, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Foreign Home Buyers, Home Buyer Advice, Home Buyers, Home Financing, home Inspections, Homebuyer Advice, House Closings, International Home Buyers, International investors, Real Estate, Real Estate Investment, real estate news, Real estate trends, Relocation, South Florida Real Estate by Kim Bregman
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COVID-19 Real Estate Home Buying Process

COVID-19 Real Estate Home Buying Process

With the current COVID-19 pandemic, the federal government has labeled residential and commercial real estate as an essential business. Yet, COVID-19 has changed how real estate is conducted not only with how Realtors are showing properties but also how real estate transactions are closed.

One thing is certainly sure: being an “essential” business does not necessarily mean business as usual.

Pre-Closing

The New National Association of Realtors (NAR) guidelines follow and strictly adhere to all CDC safety guidelines. NAR supports and encourages that all brokerage firms order their agents to shelter in place and avoid all social interaction.

Such stay at home mandates and social distancing regulations have pushed real estate agents to become creative. Instead of having open houses, real estate agents are using virtual property showings, and Facebook live open houses. There are programs for customers to even design their home using digital tools, watching videos of the construction as their property is being built. Realtors are doing initial showings over video chat services like Face Time, Skype or Zoom.

Contract

Perhaps the real challenge COVID-19 poses to home buying is not necessarily shopping for the home—rather, it is closing on one.

Issues with contracts focusing on force majeure clauses, or clauses that provide for a delay or opportunity to get out of underlying obligations in the event of unforeseen or uncontrollable events have been an emerging issue during this pandemic.

The development of the COVID-19 Extension Addendum to Contract allows for time periods and dates to be extended as a result of the Corona-virus pandemic.

Closing

Once contract issues are overcome, the closing itself has evolved due to this crisis.

Make sure that you or the Seller only use an escrow and Title company that is capable of handling the closing. Specifically ask whether they use online or mobile notaries. Also determine if the local recorder’s office uses electronic recording and whether the title company is equipped to record the deed electronically.

Many documents in the closing process require a notary, and notarization is normally required to be done-in person. The Florida legislature and Governor signed into law effective January 1, 2020, a new law that allows for what is called remote online notarization (RON). This is a huge game-changer in the State of Florida, particularly in the area of real estate closings. No longer do parties all have to get together at a certain set time around the conference room and execute documents. Now, from the comfort of your own home, provided that you have your own laptop or smart phone, you can execute documents online and remotely and have those documents notarized. While the technology is new, it is not that new. It is the same technology that is used to validate your passport or driver’s license when you go through security at an airport. This validation technology is now being used for remote online notarization (RON).

If, for example, you are in another state and are closing on real estate located in Florida, or, perhaps, you are in a profession (such as being a doctor and on call) that makes it difficult to attend a closing, you can now remotely video into the closing and notarize your documents from the comfort wherever you might be. Documents are produced online for your review, and at the point that you are prepared to execute those documents, you can do so remotely. A notary is present at the time online, not physically with you, and that notary is then able to confirm and validate that you executed the documents without any duress or coercion.

There is a caveat, however, and that is that while remote online notarization, in theory, should work all over the world, it really is more of a domestic service for people within the United States. It is difficult for the technology, at this stage, to validate foreign credentials.

Appraisals and home inspections are other aspects of residential real estate closings are evolving during this pandemic. The Federal Housing Finance Agency is allowing alternative appraisal methods such as “drive by” appraisals where appraisers drive through the neighborhood and walk around a property without going into it. They are also doing “desktop” appraisals using public data to generate property values.

The loan process will likely take longer than in the past and I am encouraging my buyers to agree to no less than a 60 days closing if a loan is needed. You need to take this into consideration with your home buying timeline if you need to close on a property by a certain date.

Moving during a Pandemic

I recently published an entire BLOG article on this subject which you can read here along with other articles that you may find informative.

Filed under: Blog, Boca Raton real estate, coronavirus, Exclusive Buyer Agency, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Foreign Home Buyers, Home Buyer Advice, Home Buyers, Home Financing, home Inspections, home safety, Homebuyer Advice, House Closings, International Home Buyers, International investors, Real Estate, Real Estate Closings, Real Estate Investment, real estate news, Relocation, South Florida Real Estate by Kim Bregman
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Virtual Home Buying Made Easy!

Gov. Ron DeSantis enacted stay-at-home orders for Florida effective April 3, but the order considers real estate an “essential service,” so Realtors may continue to operate under limits set by CDC guidelines.

Under the issued Homeland Security guidance, “residential and commercial real services” are included on a 15-page list of essential services. These cover settlement services and government offices that conduct title searches, notaries, and mortgage and recording services, as well as construction. The advisory letter was created by the Homeland Security’s Cybersecurity & Infrastructure Security Agency.

Optima Properties is able to continue to service your needs as a Buyer.

Showings:

In-person showings are considered a health risk. We can

Zoom, Facetime, or Skype showings

Online Video Tours are available on active listings currently and more are being developed every day.

Contracts:

Digital Signing of all Contract Documents
Zoom, Facetime or Skype Contract Review

Deposits:

Wired Earnest Money Deposits
Following Wire Fraud Protection ( Voice to Voice Confirmation)

Property Inspections:

Electronic Delivery of Inspection Reports
Zoom, Facetime or Skype Inspection Review

Mobile Notary:

Mobile Notary and Virtual Closings Now Available

House Key Delivery:

Non Contract Key Delivery Service Post Closing

Please contact me for all your Real Estate Related Needs.

Stay Home and Stay Safe!

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Filed under: Blog, Boca Raton real estate, contracts, coronavirus, Exclusive Buyer Agency, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Home Buyer Advice, Home Buyers, Home Financing, home Inspections, Homebuyer Advice, House Closings, Mortgage Information, Real Estate, Real Estate Closings, real estate news, South Florida Real Estate by Kim Bregman
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Tips for Buying a Fixer-Upper

Fixer-uppers have long had their fans. Some investors love the idea of making major repairs that increase a home’s value and then reselling the property for profit. Others want a low-priced starter home and don’t mind making gradual improvements over time.

Buyers must do their due diligence so that they understand their total investment in the property and the cash requirements; since most repairs cannot be financed. An Exclusive Buyer Agent’s goal is to help buyers avoid making expensive mistakes.

While repair issues, un-permitted work, or liens might not derail a sale on its own, they warrant a call to an expert who can assess the problem, offer solutions or give repair estimates.

Warning Signs Before Purchasing a Fixer-Upper:

Consider the amount of time and the amount of cash you have to address obvious deficiencies with the property.
Does the property smell damp? From mold to warping, moisture can cause considerable damage to homes, even making them uninhabitable. The first clue is that moisture smells. Besides damage to the house, moisture can adversely affect a homeowner or tenant’s health.
Stuck windows and doors. These can also be a sign of moisture or that a house is settling due to age or structural shifting. Both are problematic.
Sloping or sagging floors. Both indicate structural problems beyond just aging. Buyers should find out if framing, joists or sub-flooring need replacement.
Foundation problems. One small crack can be just the beginning of many cracks and can signal that a house could eventually crumble.
Inward grading, poor drainage and short downspouts. Improperly installed or clogged gutters and downspouts all may cause water to enter a house.
Bad roof. An old roof may leak but it’s not always the shingles or tiles that are the culprit. Sometimes, it’s what’s underneath – sheathing, trusses, beams and rafters. The sellers should disclose when the roof was installed.
Outdated wiring and fuses. Because homeowners rely on so much technology today, outdated wiring may, in worst cases, start a fire. Often, dated electric boxes make the home un-insurable.
Outdated plumbing. Toilets that don’t flush properly, sinks and showers that lack adequate pressure or have leaks, and water heaters that don’t provide enough hot water signal a need for attention. Not to mention the condition of the pipes from the home to the street.
Termite damage and wood rot. Buyers may spot blisters in wood flooring, hollow sections of wood, and even the bugs themselves. An exterminator can determine the extent of the damage and estimate repair costs.
High energy bills. This should alert buyers to the cost of cooling the home. Due diligence can tell them whether their Ac handlers, insulation, or doors and windows are inefficient and need to be sealed, repaired or replaced.
Historic home designation and zoning rules. Municipal guidelines may restrict buyers from making certain improvements to their home and property.

Filed under: Blog, Boca Raton real estate, Down Sizing, Exclusive Buyer Agency, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Home Buyer Advice, Home Buyers, home Inspections, Home Maintenance, Homebuyer Advice, International Home Buyers, International investors, Real Estate, Real Estate Investment, real estate news, Real estate trends, Relocation, South Florida Real Estate, What Buyers Should Check When Buying an Older Home by Kim Bregman
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What Home Buyers Can Learn From a Seller’s Disclosure Statement

Any responsible buyer wants to know everything about the home they’re buying before signing on the dotted line. After all, this is probably the biggest purchase you will ever make, so due diligence is a must. The majority of the real estate agents in Florida are Transactional Agents and do not owe the Buyer a fiduciary duty, An Exclusive Buyer Agent does and will work for the buyer to determine all the information known about the property and advise you on inspections, permit searches, etc. Reviewing the Seller’s Disclosure is the first step in this process.

A Seller’s Disclosure in the State of Florida Is a standard form that is essentially a checklist in which a seller indicates the condition of the different features of a property, any known problems affecting the property, and any pending legal issues. This could include things like knowledge of lead-based paint, water damage, pest damage, past repairs, past insurance claims, any history of property line disputes, etc.

Typically, a seller’s disclosure form is filled out by the seller along with their listing paperwork. When buyer’s agents go into the Multiple Listing Service (MLS) to look up potential properties for their clients, that disclosure statement should be available or can be requested from the listing agent.

I am increasingly running into situations wheretransactional brokerage firms are taking the position that since a Seller’s Disclosure is NOT required by law that are not asking the sellers of their listings to fill one out. The first line of the SPDR provides “Notice to Licensee and Seller”; the less they know, the easier it is to make a “deal”. They are relying on the fact that other transactional agents working with buyers will feel the same and not ask for a Sellers Disclosure.

Although sellers aren’t required to complete this specific SPDR form, a residential seller does have to comply with the rule established in Johnson v. Davis. In that case, the Florida Supreme Court held that “where the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer.” These material facts are sometimes referred to as latent defects. In addition, in Rayner vs. Wise Realty Co. of Tallahassee, the First District Court of Appeal provided that this same disclosure requirement applies to residential properties that are being sold as is.

In cases were the listing agent does not provide a Sellers Disclosure I request that the Seller answer all my questions in writing and provide a comprehensive list of questions that encompasses everything asked on the SPDR and more.

A seller’s disclosure form is NOT a substitute for a home inspection. Remember, sellers are required to disclosure only problems they know about. Most homeowners don’t go in their attic very often, and have probably never been up on their roof, and they aren’t required to do so before filling out the disclosure. While this document can provide a lot of valuable information, the home inspection is another layer of protection for a buyer.

The importance of this disclosure statement is just one of the many reasons why it’s critical for buyers and sellers to use an Exclusive Buyer Agent ( EBA) during any real estate transaction. EBAs are up-to-date on the latest laws and regulations and are very experienced with the complex documents and paperwork. They can help walk buyers through the disclosure so they understand all aspects of the home they’re buying and recommend the appropriate home inspections ( WDO, Radon, Leak Testing, Mold, and more) to ensure that any hidden defects are found in advance of the purchase.

Filed under: Blog, contracts, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Home Buyer Advice, Home Buyers, home Inspections, Homebuyer Advice, House Closings, Real Estate, Real Estate Closings, Real Estate Investment, real estate news, Real estate trends, South Florida Real Estate, Uncategorized by Kim Bregman
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