It’s Tax Season!

Posted on September 27, 2021 | Leave a comment

If you have a closing between now and the end of December, remember there may be an extra twist at closing that listing agents need to make sure their sellers understand.

In most cases where a homeowner has a mortgage, the lender will escrow their taxes through the year in order to make sure the yearly taxes are paid correctly in November. This time of the year, there is a gap between when a lender will roll up the escrowed funds to pay the taxes, send it to the correct county, and the county records reflect that the payment is complete.

Here is where the “twist” takes place. Usually by early November, the homeowner should receive notification by the holder of their mortgage that all the escrowed money has been rolled up and the taxes paid, but over at the county tax collector’s office, they do not show it has been paid yet.

There are a variety of reasons for this delay, but at the closing table we have to go by what the county tax records say, regardless of what documentation the seller’s mortgage holder provides.

We will send the payment for the taxes if at the time of closing the taxes are reflecting due and payable. If our payment arrives at the county first, the lender will issue the refund, or vice versa.

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A Survey is not a Pizza

Posted on April 14, 2021 | Leave a comment

Ordering a survey is not like ordering a pizza. Not every survey is the same, they take different times and talents to complete … and they don’t all cost the same.

Even if one is not required, we recommend that every closing have a survey. Old surveys often can be used if no changes have been made to the property, but if there have been, most likely a new one will be needed.

There is just too much risk involved if you don’t have a survey. There are a few things to keep in mind early in a transaction that can impact how soon your survey can be completed and how much it will cost:

– Type of Property: Lot and block can be done the fastest, metes and bounds, longer.

– Size of Property: Big properties, especially if there have been additions to them over the years from neighboring parcels, can take a few visits and cost significantly more.

– Weather: Hurricanes or extended rainy periods can cause some properties to be inaccessible.

– Date of closing: If you are scheduled for a Friday or the last three days of the month, so are a lot of other people. Surveyors can get backed up, especially during the summer rush.

Make sure you discuss with your customers and settlement service providers at the very start of the transaction the path to an acceptable survey … and give the transaction some wiggle room for success.

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Writing a Contract? Get Out Your Calendar

Posted on March 10, 2021 | Leave a comment

The vast majority of problems, conflicts and stress we see in the closing process are with closings that are scheduled on Fridays or the last three days of the month.

That is true all year but is especially true in the spring and summer when the real estate business in our market is busiest.

2021’s busy season started early, so everyone needs to make sure when putting dates and expectations in their contracts, they plan for success by avoiding those problem days.

Everything works back from the closing date, and for a lot of reasons, people like to close on those no-go days. As a result, lenders, surveyors, home inspectors – all your partners in your real estate business – are trying to work through an uneven pipeline demand. This creates bottlenecks; bottlenecks cause unexpected delays and last-minute surprises no one wants.

You can help them, your customers, and yourself by trying to schedule mid-week closings and closings near the 10th and 20th of the month. There will be fewer opportunities for delay, and a better chance for that smooth and successful real estate experience that generates years of referral business for you.

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Homestead Filing: the Time is Now

Posted on February 18, 2021 | Leave a comment

Time is running short!

If you haven’t already, now is a great time to touch base with your buyers who took legal possession of their property, by recorded deed, and reside on the property by January 1st. They have until March 1st to timely file their application for homestead exemption to the appropriate county.

Each county in our area has slightly different procedures. Some of the links and procedures have changed for a few of the counties from previous years.

In Duval County, you can find more information and apply online at the following link:
http://www.coj.net/departments/property-appraiser/exemptions.aspx

Like Duval, if you meet certain conditions, in St. Johns County you can apply online. Qualifications are outlined at their exemptions website: https://www.sjcpa.us/exemptions/

Nassau County also allows online application similar to St. Johns:
http://www.nassauflpa.com/Exemptions/Homestead-Exemption

In Clay County, you can find a link to the application to fill out ahead of time that you must deliver to the Property Appraiser here: https://ccpao.com/real-property/

Putnam County applications must be made in person. Their website isn’t as helpful as other counties, but is good to review their requirements: http://pa.putnam-fl.com/index.php/exemptions/

Flagler County has an even more challenging and still generally an offline process as described: http://flaglerpa.com/docs/Exemptions-Website.pdf

To save time driving to the offices in Bunnell, homeowners should just call (386) 313‐4150 with their questions first.

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What is a Good Minimum Binder?

Posted on February 17, 2021 | Leave a comment

Does your seller want the ability to keep the binder deposit if the buyer cannot fulfill their obligations in the contract? If so, make sure they know the different processes depending on who holds the binder.

The best place to hold a binder is with a real estate brokerage. If there is a binder dispute, as described in the NEFAR Purchase and Sale Agreement lines 276-278, “…the broker holding the binder deposit(s) may request the issuance of an Escrow Disbursement Order from the Florida Division of Real Estate.”

If the binder is held by an attorney or title company and there is a binder dispute, then the only option is interpleader. An interpleader involves lawyers, courts, and judges.

Look at lines 275-276, “…the interpleader’s attorney’s fees and costs shall be deducted and paid from the binder deposit(s)…”

Interpleaders usually have legal costs between $1,000-$2,500. It can go higher. Legal costs come out of the binder. If your binder is $1,000 and the buyer doesn’t agree to release it to the seller, there will be no binder left for the seller to collect from.

This is one of the reasons we recommend a strong binder of at least $3,000. That way, there is something worth fighting over, in this case the remaining $1,500-$2,000 after legal fees, at best.

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Don’t Let the Cyber Grinch Steal Christmas!

Posted on November 20, 2020 | Leave a comment

Be careful with your closings between Thanksgiving and New Year’s Day.

Everyone involved in the real estate business – including buyers and sellers – will be busy, distracted, and overscheduled … as are cyber criminals except for the distracted part; they are 100% focused on blowing up your deal and stealing buyers’ funds and sellers’ proceeds.

According to the FBI, Florida is #2 behind California in the number of cyber crime victims and total reported losses.

Talk carefully with your customers and settlement services provider on how “money is going to move” during the transaction.

Remember; you’re not being paranoid if people are actually out to get you.

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Buyer Short a Few Bucks at the Closing Table?

Posted on September 23, 2020 | Leave a comment

If it hasn’t happened to you yet, it will at some point. For a whole host of reason, mostly involved with hearing the wrong number, getting 3, 5, and 8 confused, or other innocent human oops, a buyer may not bring enough to the table.

The standard way to accept funds for closing is by cashiers check or wire. For significant amounts of money, closing can be delayed as another check it brought or wire is sent in, but what if there are just a few dollars missing?

Florida Administrative Code 69O-186.008 gives settlement services providers another option for small amounts. As per paragraph 1.(g), personal checks are acceptable the day of closing if;

“The deposit is made by a personal check in an amount not to exceed $500 when the title insurance agent or title insurer has a reasonable and prudent belief that the instrument will clear and constitute collected funds in the trust account within a reasonable period of time.”

We can’t accept a personal check for more than $500, but for $21.37? We can do that.

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No Worries if you Plan Right for the International Buyer: Part 2

Posted on September 15, 2020 | Leave a comment

If you have a buyer who is overseas or not a USA national and they don’t have an account at a bank in the USA, do you know how they are going to access their proceeds for closing?

If they have an account at an USA bank, there won’t be a problem. If their money is overseas, there could be significant issues.

First, we require buyer’s funds in US Dollars to close. We can accept, in some cases, a wire from a non-USA banking institution in US Dollars, but not all. If your buyer wants to use a foreign bank, get their banking information to us and we will let you know if their bank qualifies. If their bank is OK, ensure you have our “International Wiring Instructions.” Allow more time as well. Unlike wire transfers coming from inside the USA, international wires can take from 3 to 7 working days before they are available for closing.

If buyers want to avoid a wire and use a certified check, then it needs to be from a USA banking institution.

The best plan is to have your buyers use a US bank and have their funds transferred early on so it is ready at closing day.

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TRIM Notices are Out!

Posted on September 11, 2020 | Leave a comment

The Truth in Millage (TRIM) notices are out for all the counties in our area.

Make sure your sellers have reviewed their most recent TRIM notice so we can avoid any surprises at the closing table when the prorations are done.

A few other details to remember;

1. We use the highest figure on the notices for prorations.

2. CDD are prorated separately.

3. Some non-ad valorem fees are separate.

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No Worries if you Plan Right for the International Buyer: Part 1

Posted on August 28, 2020 | Leave a comment

Do you have a non-USA citizen buyer? No worries, there are just a couple of things you need to keep in mind to make sure the transaction goes as smooth as any other transaction.

Some people think that there are “FIRPTA” issues (Foreign Investment in Real Property Tax Act of 1980) if their buyer is a foreign national, but there isn’t. FIRPTA only comes directly in to play if the seller is a foreign national, but that is another Title Tip for another day.

There are two items that are a must for your international buyer to have a successful closing. The first is the easiest, identification.

If they don’t have an ID issued by the USA, that is OK. The passport they are issued by their nation is all they usually need for identification at the closing table. If it is good enough for Uncle Sam, it is good enough for everyone else. If anything else is needed, such as when the seller is a foreign national as well, we will let you know.

The second part is a bit trickier, the purchase money. We’ll cover that next week in Part II.

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