New Form Required on Florida Home Sales

A new form just arrived June 1st informing buyers of what the homeowners insurance and flood insurance may cost, and if the cost exceeds the amount disclosed then buyer may have a right to cancel contract.

New Form Required on Florida Home Sales
Homeowners and Flood Insurance Disclosure in Florida

There have been significant changes to homeowners and flood insurance policies and costs in the past few years and some are quite surprised at the hoops they must jump through to obtain affordable insurance.

The Ellis Team is strongly encouraging our sellers to provide an elevation certificate so we can obtain upfront what the flood insurance costs will be.  Without the elevation certificate insurance agents are forced to quote off the base elevation which can be much costlier.  Some buyers were surprised to find out flood insurance was tens of thousands of dollars on a property.  This is one reason the National Association of Realtors urged Congress to make changes to the flood program.

These changes are in effect now, but having the elevation certificate helps.  Many people don’t realize the buyer can assume the seller’s flood policy.  This is worth examining as well.

Homeowners insurance has seen its share of changes too.  Wind mitigation surveys can significantly reduce policy premiums on homes, especially homes built before 2002.   Older homes are getting costlier to insure because they were built to lesser codes.

I called Peter Craig over at Pacific Crest Insurance as he has been bailing us out and saving deals for us from surprised buyers brought in by other agents who didn’t know about inspections and saving money.  Peter told me about a company that is charging $800 to nail in clips so that the insurance companies will reduce premiums. If the home has certain features like hurricane clips or straps the premium is reduced.  Homes built before 1985 typically don’t have either so having nails put in helps with costs.

He also told me about a survey company that does elevation certificates quickly.  We ordered one for a property because the seller didn’t have one and got it back within a few days.  I think the seller paid $130 or so for the certificate, but it saved his deal and saved the buyer thousands on insurance.

Many buyers qualify for the home, but when they find out the homeowners and flood insurance costs are so high without these discounts they no longer qualify.  I’ve talked with several agents who have lost deals because buyers no longer qualified for the home.  It’s knocking them out on their ratios on the monthly payment.

Sellers used to not care because it was the buyer’s issue, but that’s no longer the case.  It’s not about if the buyer pays more in insurance, it’s about whether the buyer can still qualify for the home.  Most buyers buy as much as they qualify for, but when insurance costs are double or triple what the lender used for their monthly payment, it knocks them out of the deal.  Now sellers care, and if they don’t, they soon will when they start losing deals on their home.  Even if the buyer hasn’t bought as much as they can afford, they still shy away when they see high yearly insurance premiums they weren’t prepared for.

Now the new disclosure addresses this upfront, which is a good thing.  For it to work properly, getting quotes before you find the buyer is essential, so I’d recommend real estate agents find a good insurance agent and do the research on each listing before you find the buyer. Having the elevation certificate is crucial.  A wind mitigation report is helpful as well.

It’s so much easier to sell a home once than several times.  Getting this information upfront can save deals and get the sellers on their way to their next property and get buyers into their home the first time.  It’s more work on the front end, but it will help keep deals together and save work on the back end.

 

Good luck and Happy House Hunting!

Preview our Latest Listing in High Definition
1528 Pinecrest Rd

Cypress Lake Country Club

Fort Myers, FL 33919

Whether you’re ready to list your home today or just get an update on prices, we’re here to help. To get your home listed and marketed in High Definition simply call the Ellis Team at RE/MAX Realty Group 239-489-4042 or email us at Brett@topagent.com or Sande@topagent.com To search the MLS visit TopAgent.com  To learn more about Hi Def video for your home visit HomesinHD.TV

Visit our Google+ Business Page

Search the MLS

Search For Homes in Reflection Lakes Fort Myers

View Larger Map

Feel free to view our Virtual Tours .

By Brett Ellis

Fort Myers Real Estate Agent

7910 Summerlin Lakes Dr

Fort Myers, FL 33907

For the 3rd month in a row median sales prices increased in SW Florida.  Median sales prices are up 24.8% over last year so it’s safe to assume all properties in SW Florida are sky rocketing, right?  Not so fast.  Media prices county-wide are increasing, but that doesn’t mean every property is going up.

September 2013 Real Estate Sales Numbers Just Released for SW Florida

September 2013 Real Estate Sales Numbers Just Released for SW Florida

Average sales prices are coming down.  Since April the average sales price is down about $60,000.  So how can two sets of data tell two very different stories?  The answer is, they’re not telling two stories.

Average sales price is influenced by high end sales.  If there are several multi-million dollar sales it can skew the average up.  When using the median price, it really doesn’t.  Let’s say for example there are 10 sales of 5 million dollars+.  That’s at least $50 million in sales in just those 5 sales.  By using the average, that adds $50 million to the total number, but by using the median it just counts as 5 sales at the top.  Remember, median sales are the number in which half the sales occur at or below a certain price and the other half are at or above that price.  When we use average they all get thrown in together and divided by the total.

The average price is more seasonal because that’s when our high end buyers are visiting Florida and purchasing higher end homes.  This is why you’ll always see the peak of the average market around March-May.  They typically go to contract January through April and close March through May, sometimes even June.

Realtors like to use the median price because it’s more stable and less affected by a few sales.  Median prices have been fairly constant to the upside.  Even the median can have fluctuations if certain closings get delayed.  A government shutdown for instance could delay certain types of loans which would disrupt closings.  One year we had flood insurance coverage lapse and we couldn’t close until the program opened up again.

Speaking of government shutdown, the government is open since last time we wrote an article.  Yeah!!!!  Don’t hold your breath though as we might be right at it again in a few months.  November is shaping up to be a big month for the Ellis Team.  Let’s hope that’s indicative of the entire market.  Buyers have been particularly active in recent months.  October has been a good month too, but November is shaping up to be fantastic.

Inventory is on the upswing, which is good.  We need more inventory to sell.  We’ve even been going out to developers and builders looking over their inventory as sometimes we just don’t have much to sell in certain price points with certain features.

If you’re considering selling, now might be a good time to call us. 239-489-4042  We recently listed a home that was previously on the market but failed to sell with another Realtor.  We raised the price and marketed it using our advanced marketing system and it sold in 19 days.  If you price it correctly and market it where the buyers are, it should sell today.  Call us while prices are rising and before interest rates creep up next year.  Good luck and Happy Home Selling!

To search the MLS for properties go to www.TopAgent.com or give us a call at 239-489-4042     Good luck and Happy House Hunting!!!

Feel free to view our Virtual Tours .

Visit our Google+ Business Page

 

I recently attended the Star Power convention in Denver where the presidents or founders of RE/MAX, Prudential, Coldwell Banker, and Keller Williams spoke about where the market is today and where it’s going.  Dave Liniger from RE/MAX stated that nationwide we have a market fueled by investors and first time home buyers, but we’re lacking the move-up buyer in this market.  Jim Gillespie from Coldwell Banker agreed, and shared some interesting stories from Capitol Hill on his efforts to change the First Time Home Buyer Tax Credit to help the entire market.

 

It’s well known that tax codes effects home buying activity.  Look no further than the interest deduction and you can see why whatever Congress does impacts the entire market.  We can also look at the cash for clunkers program as an example in another industry.  The problem with only offering the credit to First Time Home Buyers is they will buy, but there’s no incentive for anyone who is selling to sell and move up.  So we end up with a bottom forming on entry level homes and stagnation in the mid level and secondary home market, which arguably needs more help than any other segment in SW Florida.

Percent of Distressed Sales in Fort Myers, Cape Coral, Lehigh Acres
Percent of Distressed Sales in Fort Myers, Cape Coral, Lehigh Acres

 

As you can see from the attached chart, 87% of Lehigh Sales and 74% of Cape Coral home sales have been distressed in the last 3 months, as this is where the majority of entry level speculator homes were built.  Fort Myers to a lesser extent stands at 62%, and that number grew last month.  By distressed we mean either a short sale or foreclosure sale.  This has put pressure on median sale prices, and illustrates that first time home buyers and investors are the majority of the buyers right now.

 

Jim Gillespie and others are lobbying Congress for a $15,000 tax credit for all buyers.  The $8,000 tax credit for First Time buyers is set to expire December 1, but we’ve heard this may get extended in October if the economy doesn’t pick up steam by then.  But what about helping the overall market, not just one segment?  We’ve helped solidify to some extent the entry level market, and we’ve done nothing for the mid market on up.  We’re talking $200,000 market and up in Lee County, the same market that used to be $400,000-$600,000 a few years ago.  Yester year’s prices aren’t coming back, as the market has done a reset.  However, we could inject infusion into this segment as well and keep it from further declines and get this economy moving again.  Real estate has led the US economy out of each recession, and it stands to reason it will do it again.  21% of the nation’s GDP is real estate related.  If the economy is the #1 issue right now, then what are we waiting for?

 

Could you just imagine the new activity that would occur if there was a $15,000 tax credit for all buyers?  Imagine how many people from up north could come by a 2nd home in Florida, or how many move-up buyers might pull the trigger and move, especially with today’s bargains.  A recent study showed nationwide a real estate sale generates $63,101 back into the economy.  This is based on everything from new carpet sales, appliances, commissions, closing fees, plus the propensity of money at about 1.5%, meaning when you go out and spend, the vendor you just bought from also goes out and spends into the economy.

 

The truth is investors and first time home buyers were already buying in SW Florida before the tax credit.  Our buyers were limited to first time home buyers and investors only because the properties they’re buying were such great deals, and we’re happy the first time home buyers are getting a tax credit on top of a great deal.  I’m sure it has spurred even more buyers off the fence.  We would like to see all buyers benefit, and if we speeded up the recovery of the real estate market, not only would the economy benefit and we’d get people back to work, but we’d also protect banks from more foreclosures going forward.  We know foreclosures are about to pick back up again, and many will now be in that mid market and upper range.  Come on Congress, let’s make this happen, protect our banks, and get people moving again and get this economy and real estate market on solid ground again.

Late last week we released two additional charts containing the SW Florida real estate sales numbers, as well as the entire state of Florida.  The Fort Myers Single Family Homes chart shows the Fort Myers and Cape Coral home sales up 80% over last year, as well as single family home sales for the entire state of Florida. The Fort Myers Cape Coral Condo Sales chart shows the Fort Myers and Cape Coral July 2008 sales as compared to July of 2007, as well as the entire state of Florida.

Each month the Florida Association of Realtors releases official sales numbers for Fort Myers real estate, Cape Coral real estate, and several other metropolitan areas.

The Florida Association of Realtors reported home sales for Florida today. They reported a 9% slowdown in single family homes for the Fort Myers/Cape Coral area and a 44% slowdown in condo sales from February 2005. Single family home sales were down 9% from January 2006, and median price was down 2.54% from January 2006.

Condo sales were down 44% from February figures last year as mentioned above. Condo sales were down 14% from January 2006 numbers as well. Median price was actually up 12.78% over January 2006 numbers.

The Ellis Team at RE/MAX Realty Group has reported an increase in sales over last year. This is partially due to a "Flight to Quality" when the market conditions change. Consumers are no longer willing to settle for an agent or company who is perhaps the lowest price. Sellers are demanding more service, more advertising, and better negotiating skills, and just won’t settle for less. Sellers realize in a Hot market they could attempt to go with an agent who provided less services, because if the first deal fell through, there were other buyers waiting.

This isn’t true anymore. Sellers want aggressive marketing. They realize inventory has risen, and buyers now have choices. They want to be first in line, not at the back of the line. This is why pricing, and the choice of the Listing agent becomes crucial. It really does matter who you list your home with, what services they will provide, and what counseling you will get. The expertise you receive from a seasoned experienced agent varies vastly than from soomeone who hasn’t been in the business long enough to see up, down, and sideways housing cycles.

We’ll provide some of these differences in a subsequent post.