House Closings

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
Comments Off on Caveat Emptor- Buyers Beware!

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
Comments Off on How To Win A Bidding War!

Pros and Cons of Escalation Clauses

An escalation clause is language inserted into a purchase offer for a home that’s intended to make sure a buyer is the highest bidder. It’s typically used when a buyer and their real estate agent strongly believe a house will receive multiple offers.

An escalation clause states that the buyer will pay a certain amount of money above the highest offer the seller receives. It generally includes a ceiling cap to make sure the buyer doesn’t agree to pay more money than they can afford.

An escalation clause can be a powerful technique when used correctly, but unfortunately it is seldom used as effectively as it could be. Such a clause increases, or escalates, a contract above its originally offered Sales or Contract Price when the Home Seller has received another Contract. The intent of the Clause is to crush competing contracts by automatically and incrementally increasing the buyer’s offer price by a pre-determined amount above other offer(s).

Typically, there are three distinct parts to any escalation clause that’s included in a real estate contract.

Proof of a bona fide offer: You can rest easy knowing that sellers can’t just use an escalation clause as an excuse to make you pay a higher sale price. When the contract asks for “proof of a bona fide offer,” it means that the listing agent must be able to prove that another offer came in with a purchase price higher than your original suggestion. Typically, the listing agent will send over a copy of the page from the other buyer’s purchase agreement that shows the higher price. However, any identifying information for the other buyer will be redacted.

An escalation amount: The escalation clause should also include an amount by which you’d like to outbid any higher offers.

A price cap: The price cap represents the maximum amount you’re willing to pay for the property, or how high you’re willing to allow your offer to go. If an offer is submitted that is higher than this amount, be aware that your offer may be taken out of the running.

Pros of Using an Escalation Clause

Including an escalation clause in your offer indicates to the sellers that you’re truly invested in buying the property. It shows that you’re willing to go above and beyond what’s required in order to become the home’s new owner.
Some buyers love the idea of negotiating; others don’t. If you fall into the latter group, including an escalation clause in your offer might be a smart idea. Since it gives the seller a solid idea of your positioning upfront, it cuts down on the back-and-forth that needs to happen between you and the sellers.
If the market conditions are highly competitive — a “Seller’s Market” — or the particular property is head and shouldersabove the rest, or both, you as a Home Buyer are likely going to find yourself competing for the home against other would-be homeowners.
Using an escalation clause will continually bump up the price you pay, but only if there are other offers that trigger it.

Cons of Using an Escalation Clause

If a buyer includes a maximum price in an escalation clause, the seller will immediately know the buyer’s top price thereby compromising the buyer’s bargaining position. By providing a price cap for your escalation clause, you’re essentially telling the sellers how much you are willing to pay for the home, and there’s nothing to stop them from simply presenting you with a counteroffer at that price.
An offer containing an escalation clause may not become enforceable until a specific price is entered into the contract and the buyer sees the price the seller has specified.
The seller may fabricate a fictitious offer in order to drive up the sales price for a buyer who uses an escalation clause.
Real estate brokers are prohibited from drafting escalation clauses, because doing so would constitute the unauthorized practice of law. Hiring an attorney is recommended but will increase the buyer’s costs.
If multiple buyers were to include escalation clauses in their offers, a bidding war may follow. If no buyer is willing to commit to a specific price, then no contract is ever formed and no property is sold.
Since the use of an escalation clause implies that a prospective buyer is willing to pay more than other buyers, it may motivate sellers to seek higher prices, a disadvantage to the buyer using the escalation clause.
While the use of escalation clauses may lead to higher sales prices, a benefit to the sellers, they could also discourage buyers who do not want to use escalation clauses.
A broker who discloses the price/terms of an offer without the buyer’s consent or otherwise gives one party an unfair advantage over another risks disciplinary action by the Commission. A seller’s best response in a multiple offer situation where one or more of the buyers is using an escalation clause will likely be to invite all buyers to make their highest and best offers. That way, each buyer is given an opportunity to buy the property at the price and terms he or she is willing to pay and the seller will receive the best offer from each buyer rather than an incremental offer from a buyer who wants to offer slightly more than a competing buyer.

Don’t make the mistake of thinking the Highest Contract Price will always win; other TERMS of a contract can often prove more valuable to the Sellers.

Having a knowledgeable Exclusive Buyers Agent is invaluable for situations like this and for understanding the risks and possible benefits of opening negotiations in this manner. The seller has the right not to respond to any offer, whether or not it contains an escalation clause.

Filed under: Blog, Boca Raton real estate, contracts, Exclusive Buyer Agency, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Home Buyer Advice, Home Buyers, Homebuyer Advice, House Closings, International Home Buyers, International investors, Real Estate, Real Estate Closings, Real Estate Investment, real estate news, Real estate trends, South Florida Real Estate by Kim Bregman
Comments Off on Pros and Cons of Escalation Clauses

Tips for Buying a Home in a Seller’s Market

Buying a home in a Seller’s market always has its challenges. But when you’re trying to do it in a seller’s market, the difficulty can reach a new level. When the market favors the seller, time is of the essence. Multiple offers happen with more regularity in a seller’s market than a buyer’s market, because a seller’s market is defined in part by low inventory and a surplus of home buyers. A beautiful home that is priced well can attract more than one offer.

In a seller’s market, you should always assume you’re competing against several other offers. However, that doesn’t mean you can’t buy a new home in a seller’s market, when there are more buyers than homes, and sellers can afford to hold out for higher offers. You just need to make sure you do it right and arm yourself with the right information:

Here are a few things to consider as you prepare your offer when buying in a seller’s market:

Choose an Experienced REALTOR: In sports and in business, it’s important to have the best players on your team when facing fierce competition. In a seller’s market, that means choosing a real estate agent who not only has proven expertise in the neighborhoods you’re interested in but is also highly responsive and efficient. Make sure to use an Exclusive Buyer’s Agent that owes you a fiduciary and works in your best interest.

Demonstrate Credit Worthiness: You should get Pre-Approved for a home mortgage with a local lender before touring homes if you need to get financing. By obtaining a pre-approval for a mortgage before you start home shopping, you’ll know how much buying power you have. Your offer may have far more credibility than competing ones where buyers didn’t take this step.

Lower Your Expectations: When the inventory of homes is limited, you probably can’t afford to wait for the perfect house to hit the market. Prepare yourself to adjust your expectations. It makes the most sense to make exceptions to your criteria for things that can be changed. For example, you can renovate or add a bathroom someday, but you can’t change the home’s location or lot size.

Make your Best Offer first, be Ready to Bid: Make your best offer but be prepared for it not to be your final offer. High home prices can lead to home appraisals that don’t climb as fast, leaving lenders to not fund the loan. Home buyers should have money set aside the pay the difference between a contracted purchase price and the appraisal.

By Prepared to Make Concessions: Your relative lack of power in a seller’s market doesn’t just affect the question of price. It carries over to every other aspect of the deal, too. Shorten the inspection period, be flexible on closing dates; you should be prepared to accommodate the seller’s needs even if it is an inconvenience to you.

Don’t be that buyer who wants to wait until the weekend to view a home in a seller’s market. By the weekend, that home could be sold. Try to be one of the first showings. Sellers usually don’t enjoy having buyers come through their homes at all hours of the day, so most would like to see their home sold quickly. If you write a good, fast, and clean offer, your chances of acceptance are far better than those of a buyer who is unprepared or is unrealistic on price.

Finally, don’t get carried away with the pressure to buy, even in a seller’s market. Remember that a home decision has a long-term impact on your financial future. It may be better to let a house go than make a poor decision that’s expensive to change.

Filed under: Blog, Boca Raton real estate, contracts, downtown boca raton, Exclusive Buyer Agency, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Home Buyer Advice, Home Buyers, Home Financing, Homebuyer Advice, House Closings, Real Estate, Real Estate Closings, Real Estate Investment, real estate news, Real estate trends, Relocation, South Florida Real Estate by Kim Bregman
Comments Off on Tips for Buying a Home in a Seller’s Market

Keeping Home Buyers Safe During COVID-19 Pandemic

How I Keep Buyers Safe During The COVID-19 Pandemic:

Buying a home is never a simple undertaking. Even at the best of times, house hunting comes with lots of built-in stressors, from mortgage approvals to bidding wars and beyond. But house-hunting during the corona-virus pandemic? That changes the game entirely.

Although it’s a scary time to be out and about checking out real estate, it is still possible to do so and stay relatively safe. The industry has rapidly adapted, introducing approaches that minimize exposure to the virus.

A trusted Exclusive Buyers Agent is always a key ingredient in a successful home-buying experience. During the COVID-19 pandemic, this asset is absolutely non-negotiable.

Virtual Showings:

Many agents are now working remotely and conducting most of their business virtually. Instead of Open Houses, just ask me to provide you with a Virtual Tour of the property using Facebook, Skype or WeChat. Also remember that listing pictures may not tell the whole story. Special camera lenses and creative angles often make rooms appear larger than they actually are. Look out for potentially distorted pictures (which often have angles that curve somewhat) and learn to take such shots with a grain of salt. Listing agents only take photos of the positive aspects of the home. I will review the entire home with you and provide you with a constructive and truthful assessment of the condition , location and if it meets your needs.

Home Tours:

If you want to tour a property, I can provide you with masks, hand sanitizers and shoe covers. During the tour, it’s also now customary me to open all doors, so that home buyers can explore closets and other enclosed spaces without touching anything as they look.

If you do make an offer that’s accepted and you head to the closing table, real estate agents and attorneys are also adapting to remote closings.

Remote Mortgage Approval

One smart way to stay safe right now is to work with a loan officer who is set up to work remotely. Most lenders have already made the entire mortgage process digital. There is no need for you to meet a lender or show up at a closing table any longer.

Remote Home Inspections

I am offering clients the option of doing a remote inspection, where I am with the inspector in the property alone and review the findings with Buyers virtually. The Inspector and I walk you through the home’s deficiencies and operations in advance of sending you a formal report.

Virtual Home Appraisals

Home appraisals required by a lender generally include a site visit, which is not possible in some parts of the country where this is not considered an essential service. Luckily, appraisals pertain only to those getting loans, so cash buyers can skip this process entirely. But if you are getting a mortgage, fear not, virtual appraisals are generally accepted by most lenders today.

Remote Home Closings

In-person home closings—where all parties come together to sign contracts, swap keys, and shake hands—are, for the most part, not happening right now. Mobile closers are going to the Buyers for the final execution of documents. They are practicing safe social distance practices and there is no “closing table” any longer. Keys will be brought to you personally or couriered.

There is no limit the the services and adaptability that Optima Properties offers its clients…..we are currently assisting in the lot selection, model selection, and construction of a home virtutally for several clients who will not see their new home until the day they move in.

Filed under: Blog, Boca Raton real estate, coronavirus, COVID-19, Exclusive Buyer Agency, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Home Buyer Advice, Home Buyers, home safety, Homebuyer Advice, House Closings, Real Estate, Real Estate Closings, Real Estate Investment, real estate news, Relocation, South Florida Real Estate by Kim Bregman
Comments Off on Keeping Home Buyers Safe During COVID-19 Pandemic

Things To Do The First Week After You Move

Moving into your new dream house can be a daunting task. Between unpacking, cleaning and trying to find that stray roll of toilet paper, it may feel like you have lost your mind in a sea of bubble wrap. That is why I wanted to share simple things that you should do that first month of living in your new home. These items may feel like back burner tasks but really, they will help you sleep better at night in your new abode and make you feel like your new place is less like a new house and more like your new home.

Change the Locks: Security is the number one concern of most people in a new environment. You can easily switch out your locks and deadbolts to your new home to protect your valuables, your family and of course, yourself. Now is the time to consider the finish and the options are endless! When it comes to exterior locks, make sure you choose something that looks timeless and can be cleaned easily. A new security system is also a good idea. The options for this are endless as well. Systems with online monitoring, iPhone compatibility, thermostat control and even video monitors for the interior as well as your baby nursery are super helpful. Even if the room is empty now, it won’t be in the future – so go ahead and secure it!

Remove Toilet Seats: By removing your toilet seats, you will be able to really deep clean under the bolts and hinges. After a thorough scrubbing, you can reinstall your existing seat or choose to shop for a new one (new versions with night lights, padding or even child sized attachments are now available!)

Change the Garage Door Code: Similar to the locks, but this is applicable if your garage door has a remote mounted on the outside of the door. It is easy to change the code, simply look up the user manual for your specific opener online. If your home comes with a smart garage door opener, make sure to download the app and get it set up with your phone too.

Replace the Fire Extinguisher: Emergencies happen, knowing that you have a working fire extinguisher if needed is essential.

Change the Smoke Detector Batteries or Units: Avoid the dreaded 3am chirping by changing the batteries when you first move in and mark your calendar for every 6 months to swap them out again. If the house is older than 10 years old, consider replacing the entire unit (possibly a combined carbon monoxide and smoke detector unit).

Change the AC Filter: A five-minute project that can prevent loads of headache down the road. An old filter can make your AC work harder which can lead to it running inefficiently or breaking.

Set up the Thermostat Schedule: Unless you like the exact same temperature and live on the same schedule as the previous owners, you’re going to want to set up the thermostat. Better yet, replace it with smart thermostat and start building out your smart home!

Clean the Dryer Vent: It is unknown when the vent was last cleaned. In order to prevent using the new fire extinguisher, clean out the dryer vent of years of lint!

Find all the Shut-Off Locations: Hopefully you never need to use these in an emergency situation; however, if it does happen, you don’t want to use that time to search for the shutoffs.

Change Your Address: The first address to change is with USPS. This will ensure that anything you miss will get forwarded. I was also able to select a checkbox to update my voter registration at the confirmation screen. Another important address update is on your driver’s license and car registrations.

Make a List of Emergency Numbers: The point of an emergency contact list is that it’s there when you need it. Now that you’re in a new location, you need a new list with local phone numbers and addresses for the police department, nearby hospitals, the fire department, and other emergency services. Don’t wait until you need them in a hurry.

Collect your Moving Receipts: For any home move, it`s a good idea to keep all of your receipts for moving expenses, just in case you`re able to write off your move. If you haven`t done that yet, now`s the time to gather your receipts and documentation and make notes about what each item is for as well as any additional information that may be helpful at tax time.

Meet your Neighbors and Enjoy your New Home!

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 Maintenance, Homebuyer Advice, House Closings, Real Estate, real estate news, Relocation, South Florida Real Estate by Kim Bregman
Comments Off on Things To Do The First Week After You Move

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
Comments Off on COVID-19 Real Estate Home Buying Process

Guidance for Moving During COVID-19

The novel coronavirus (COVID-19) has put a stop to the normal routines of everyday life both in the U.S. and abroad. And while social distancing is the course of action to take until told otherwise, moves aren’t always something that can wait. Real estate is considered an essential service in all states and there are many services providers to assist you in facilitating a move to a new home.

By taking extra safety precautions and minimizing social contact, you can still move safely. If you are about to move, you can still pull it off with a little extra planning and a few precautionary steps.

Here are some tips for making your move as safe, seamless and stress-free as possible.

Moving Companies:

There have not been any notable shutdowns of service among major moving companies. That being said, decisions about closures may be left to individual franchise owners. If you have already scheduled your move and haven’t heard anything, assume that your moving company is still providing services unless told otherwise, but still call just to confirm.

If you’re worried about moving during a pandemic for a move that is still upcoming and for which you haven’t scheduled movers, it’s hard to say what will and will not be available in the months to come. For now, continue to do research on companies and ask directly what steps are being taken when you reach out. What has changed at this point is largely going to be related to the customer experience itself, including frequent hand washing among movers and no physical contact between movers and clients.

If you need to select a moving company, ask for a virtual quote and see if the company offers fully contactless service. Forgo handshakes, for obvious reasons. A smile and a generous tip (sent through Venmo, PayPal or another contactless digital platform) are a welcome substitute. These companies have virtual estimate procedures available for competitive quotes

Moving companies are taking the coronavirus pandemic very seriously. To that end, companies across the country have put into place protocols designed to protect their employees and their customers. These include:

Following federal and local guidelines around social distancing and sanitization
Conducting virtual surveys instead of in-home surveys to provide estimates
Frequently sanitizing trucks and equipment
Practicing social distancing with customers and, as much as possible, among moving teams
Wearing masks and gloves
Keeping trucks stocked with hand sanitizer

All of these practices help ensure that moving services can remain available in a safe way.

Car shipping companies open during COVID-19 outbreak

Company	Status	Additional info
AmeriFreight	Open	Learn more
Montway Auto Transport	Open	Learn more
Sherpa Auto Transport	Open	Learn more
Ship a Car Direct	Open	Learn more
uShip	Open	Learn more

Interstate moving companies open during COVID-19 outbreak

Company	Status	Additional info
Allied Van Lines	Open	Learn more
American Van Lines	Open	Learn more
Expedia Van Lines	Open	Learn more
First National Van Lines	Open	Learn more
International Van Lines	Open	Learn more
Interstate Moving & Relocation Group	Open	Learn more
North American Van Lines	Open	Learn more
PODS	Open	Learn more
Silver Star Moving Group	Open	Learn more
United Van Lines	Open	Learn more

Storage Services

Same as moving companies, major storage companies continue to run operations. What you might be able to expect however is limited hours of accessibility and/or a reduction in the number of customers who are able to access their units at any one time. Storage companies should also be following proper hygiene practices, including sanitization of access pads and the requisite six feet or more of space between customer and customer and customer and employee.

Storage companies open during COVID-19 outbreak

Company	Status	Additional info
CubeSmart	Open	Learn more
Extra Space Storage	Open	Learn more
Public Storage	Open	Learn more

What If I’m Moving By Myself?

The process of a DIY move looks pretty much the same now as it did before COVID-19, minus the ability to have a couple friends come over and lend a hand in exchange for pizza. Some additional things that you will want to do however include keeping hand sanitizer, soap, and paper towels accessible at all times, we well as making a detailed plan for both your departure and arrival.

Major rental truck companies continue to be in service, as they are considered essential for transportation and personal mobility needs. Again, what may be different is the experience, since companies like Enterprise and U-Haul have put into place their own protocols for physical distancing. This means that your pick-up and drop-off location may not be at the branch office, and that you’ll have to make your reservation online or over the phone instead of in person.

If you rent, talk to your current landlord about how you can safely drop off keys and collect your security deposit, and talk to your new landlord about the process for a safe move in. Putting in a blueprint of steps ahead of time will help you maintain social distancing during your DIY move and answer any questions you might have about the process.

Truck rental companies open during COVID-19 outbreak

Company	Status	Additional info
Budget	Open	Learn more
Enterprise	Open	Learn more
Penske	Open	Learn more
The Home Depot	Open	Learn more
U-Haul	Open	Learn more

How to Prepare For Your Move

One silver lining is that social distancing means that you might have more time to devote to organizing your home prior to your move and getting rid of the things you no longer want or need. If you plan on donating items like clothing, linens, furniture, shelf stable non-perishables, etc., call the place that you would like to donate to ahead of time and see what their policies are. While many people are in need during this time, it’s likely not going be quite as easy as just driving to your nearest donation center and dropping stuff of (but that doesn’t mean you shouldn’t do it).

Junk removal companies open during COVID-19 outbreak

Company	Status	Additional info
1-800-GOT-JUNK	Open	Learn more
College Hunks Hauling Junk	Open	Learn more
LoadUp	Open	Learn more
Waste Management Dumpster Rentals	Open	Learn more

To prepare for a move amidst COVID-19, be sure to keep the following steps in mind:

Contact your movers

This is important to confirm your reservation and discuss best practices for moving day. Moving companies are putting in lots of safeguards to help protect their clients, and it helps to be on the same page as them in terms of what is expected.

Buy all of your supplies at once

You are going to want to get it right with just one trip to the store, so make sure you know exactly what you’re going to need for your move. Don’t use free or recycled moving boxes. The coronavirus can live on cardboard for as long as 24 hours, so now is not the time to be picking up free moving supplies from places that are recycling them. Boxes that you already have in your home are fine, but if you need any extras then you’ll need to go to the store and buy them new (even better if you can then purchase them through self-checkout). Better yet, order all your moving supplies online and have them shipped to your residence. Clean as you pack. Use this opportunity to sanitize your belongings, wiping items down with disinfectant. If you don’t have any, you can make one with a solution of one tablespoon bleach to one gallon of water.

Finish packing at least 24 hours before the movers arrive

Coronavirus can last a long time on surfaces, including up to 24 hours on cardboard boxes. Your movers will be wearing gloves, but for everyone’s safety you should still have your boxes packed and sitting untouched at least a day before your movers arrive.

Provide hygiene products for your movers.

To aid your movers in following necessary hygiene practices, be sure to leave out products that they can use while they transport your items to and from the moving truck. That includes soap and paper towels by the sink, and hand sanitizer by the door that they’ll be entering and exiting through. If you’re concerned about having enough supplies, let your moving company know so they can be sure to bring them along for use during the move.

Be transparent and flexible

In advance of your move, reach out to your neighbors — especially if you live in an apartment building — and share the date and time you plan to move. This gives everyone in your direct vicinity an opportunity to avoid unnecessary contact and let you know if your timing is a problem.

When you move into a new home, deep clean it

Be sure to deep clean and sanitize your new home before you move into it. Here are a few resources and tips to help:

CDC’s recommendations on how to clean and sanitize your home

Use disinfectant wipes for quick cleanings over the most high-touch areas – doorknobs, sinks, cabinet pulls, refrigerators, etc.
Use disinfectant sprays for areas that can’t be wiped clean. You can use Lysol, for example, on your couches and mattresses which will touch many surfaces during a move (the ground, the inside of a truck, etc.).
Use this CDC bleach mixture recommendation on your new tile floors. Use a disinfecting wet mop cloth on your hardwood floors As you unpack, be sure to also disinfect your computer and accessories (keyboards can get pretty gross – here’s how to clean them), your television remote controls, credit cards, wallet, and more.

If you have an extra minute, here are some additional things to consider

Prioritize your internet setup. Scheduling an internet installation date at your new home is critical for staying connected to friends and family. There are 1-2 hour call wait times at cable and internet providers right now, as more and more people call to increase speeds and bandwidth. You can’t bank on getting an appointment as easily as you have in the past. Additionally, consider a high bandwidth plan to account for changes in working from home, video calls, multi-device streaming, etc.
Stocking your kitchen full of groceries will feel a bit different this time around. Try Shipt or Instacart, or delivery options from your local grocery store.

Additional resources:

While planning your move, continue to monitor the health and safety guidelines set out by the World Health Organization (WHO)and the Centers for Disease Control and Prevention (CDC).
For tips on infection prevention, visit gov.

Moving is stressful under the best of circumstances; this is a scary time and certainly takes moving stress to the next level. With some planning and organization, you can relocate and stay safe even in an environment with a pandemic.

Filed under: Blog, Boca Raton real estate, coronavirus, Down Sizing, Exclusive Buyer Agency, Exclusive Buyer Agent, First Time Homebuyers, Home Buyer Advice, Home Buyers, home safety, Homebuyer Advice, House Closings, International Home Buyers, Real Estate, Real Estate Closings, real estate news, South Florida Real Estate by Kim Bregman
Comments Off on Guidance for Moving During COVID-19

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!

‌

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
Comments Off on Virtual Home Buying Made Easy!

FIRPTA Withholding – Foreign Investment in Real Property Tax Act

FIRPTA (Foreign Investment in Real Property Tax Act) Withholding is the Withholding of Tax on Dispositions of United States Real Property Interests

The disposition of a U.S. real property interest by a foreign person (the transferor) is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding.

FIRPTA authorized the United States to tax foreign persons on dispositions of U.S. real property interests.

Persons purchasing U.S. real property interests (“transferee”) from foreign persons, certain purchasers’ agents, and settlement officers are required to withhold 15% of the amount realized.

Withholding is intended to ensure U.S. taxation of gains realized on disposition of such interests. The transferee/buyer is the withholding agent. If you are the transferee/buyer you must find out if the transferor is a foreign person. If the transferor is a foreign person and you fail to withhold, you may be held liable for the tax.

One of the most common exceptions to FIRPTA withholding is that the transferee (purchaser/buyer) is not required to withhold tax in a situation in which the purchaser/buyer purchases real estate for use as his home and the purchase price is not more than $300,000. However, buyers should be aware that while they may meet the withholding exemption they are still responsible for the seller’s tax liability, interest and penalties should the seller not file a US income tax return to report the sale and pay any relevant taxes.

Note to Non-Resident Buyers – If you purchase property from a non-resident seller and an exception to FIRPTA withholding does not apply then you must ensure that FIRPTA is satisfied as part of the closing. Check your settlement statement prior to closing where you should see 15% of the sales price withheld on the seller’s side of the settlement statement. Request a copy of the withholding certificate from the closing agent and, if withholding was calculated, request a copy of forms 8288, 8288-A and front and back of cancelled check. Retain these documents in a safe place along with your settlement statement and other closing documents.

Foreign Investment in Real Property Tax Act (FIRPTA) Withholding

U.S. Tax law requires that a non-resident alien who sells an interest in U.S. real property is subject to withholding, for tax purposes, of 15% of the gross sales price (i.e. $45,000 on a property with a sales price of $300,000). The withheld amount is required to be forwarded to the IRS, by the Closing Agent, within 20 days of the date of closing. These funds are held until the IRS is satisfied that all taxes due by the non-resident are paid. In order to apply for a refund you can either:-

File U.S. tax returns for each year that rental income was received, reporting all income and expenses; file a final U.S. tax return in the year following the year of sale, to report the sale and recover the balance of cleared funds. This process can take up to eighteen months depending on when, during the tax year, the property is sold.

File prior year tax returns (where required) plus an application for early release of cleared withholding on or before the date of closing. By making this submission, the 10% withholding remains with the Closing Agent whilst the IRS processes the Withholding Application and issues a Withholding Certificate for the cleared funds – usually around 90 days.

Please note that applying for and receiving a Withholding Certificate does not eliminate your requirement to file a final U.S. income tax return to report the sale transaction. In fact, when your final tax return is filed you may receive a further tax refund depending on the number of owners and length of time that the property was held.

In order to ensure a timely release of your funds it is extremely important that the following is obtained PRIOR to closing:-

Buyer’s names, address and SSNs – if U.S. Citizens

Buyer’s names, address and ITINs – if non residents

Or, if the buyers are non residents and do not have ITINs, the buyer’s completed Form W-7 (one per buyer) and authenticated copy of the picture page of their passport(s)

Without this information the Application for a Withholding Certificate and early refund will be rejected. We suggest that you request your Realtor prepare your sales contract contingent upon the buyers providing the above information.

Who’s responsible for FIRPTA withholding on the sale of U.S. property?

Foreign Investment in Real Property Tax Act (FIRPTA) was established in 1980 to ensure the withholding of estimated amount of taxes which may be due on the gain from the disposition or transfer of a U.S. real property interest from a foreign person.

If you purchase U.S. real property from a foreign individual or corporation then you are required to make sure that the seller pays any taxes due on the property. The buyer must execute or have executed the correct forms including the sellers name, address and social security number or individual taxpayer identification number. 15% of the gross sales price must be withheld and submitted to IRS or held in escrow whilst an application for reduced FIRPTA withholding is timely filed and processed.

If the buyer does not take care of the withholding and the seller is a foreign entity who leaves without paying their tax then 15% will be taken from the buyer.

Most buyers are unaware that it is their responsibility to determine if the transferor/seller is a foreign person and subject to FIRPTA withholding. In reality, the settlement agent (Title Company or Attorney) may be instructed to deduct the 15% and submit to IRS or hold in escrow whilst an application for reduced FIRPTA withholding is submitted to IRS for processing.

Filed under: 20 Blogs, Blog, Boca Raton real estate, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Foreign Home Buyers, Foreign Nationals, Home Buyer Advice, Home Buyers, Homebuyer Advice, House Closings, International Home Buyers, International investors, Real Estate, Real Estate Closings, Real Estate Investment, real estate news, Real estate trends, South Florida Real Estate, Tax deductions by Kim Bregman
Comments Off on FIRPTA Withholding – Foreign Investment in Real Property Tax Act