What are CDD fees?
CDD stands for Community Development District. In some newer communities, it is an annual cost to a home owner that is paid as part of the annual tax bill. It is usually made up of 2 parts. A repayment of a bond for the community development - usually over a 30 year period, and an-ongoing maintenance and upkeep of some of the infrastructure - much like a homeowners association fee. (You may note an item on MLS listings that displays if the property has CDD: Yes or No.)
The fees are included in the overall real estate tax field which is auto-populated directly from the tax record. (Occasionally, listing agents break it out and list the tax amount only in the tax field and the CDD cost in a separate field so when a property has a CDD fee,we always like to confirm it is included.)
Also, as a note, many communities that have a CDD fee have lower association fees because some of the normal costs associated with the association are covered as part of the CDD fee. It is always a good practice to get all the info so you can compare apples to apples.
And lastly, the bond portion of the CDD fee can normally be paid off in advance. The percentage of the overall CDD fee varies between communities. We can assist you in getting and analyzing the CDD info.
Florida Homestead Exemption
Owners of a single family residence in Florida can take advantage of an exemption of up to $50,0000 of the assessed value of a property if they claim the property as their primary residence and meet some additional qualification criteria.
Click here to read an overview of the Homestead Exemption on the Sarasota County website; https://www.sc-pa.com/homestead/overview/
There are some nuances and benefits to homesteading including a max increase allowed of only 3% of the assessed value in any year.
And, contrary to a popular belief, there is no timeframe specified on how much an owner has to reside in a home to be able to claim the exemption.
Once you purchase a home, it is important to register for your homestead exemption (if you intend to utilize it) because it is not automatically placed on a property.
When putting in an offer to purchase residential real estate in this area, the standard practice is for a buyer to submit it in contract form so that all the terms are very clearly spelled out.
* As a note, for Sarasota and Manatee County, it is typical for the BUYER to select and pay for the title work (other counties may differ).
There are 2 main contracts used in this area; the FARBAR standard Contract and the FARBAR AS-IS with Right to Inspect.
The main differences are:
The standard contract has a built in maintenance requirement for any repair items found by a licensed inspector. It a very defined list outlined in the contract of functional maintenance items and excludes cosmetic issues.
There is also a defined limit to what the seller is contractually obligated to pay for these repairs – the default limit amount is set at 1.5% of purchase price (but often times that limit is reduced during negotiations.)
There are also limits set for WDO (wood destroying organisms) and for permit issues.
The As-Is with Right to Inspect contract does not have any contractual obligation of the seller to repair any maintenance, WDO, or permit issues. The emphasis on this contract really is on the “right to inspect and cancel”. With that clause, the buyer, at his/her sole discretion, has the right to cancel this contract within the timeframe of the inspection contingency (standard timeframe is defaulted in the contract to 15 calendar days). Since the buyer has that option, it does provide an opportunity for the buyer to request that the seller address any issues that are uncovered do to the underlying option that the buyer has to cancel.
We have a very solid understanding of the contracts and can assist buyer/sellers in a strategy that reduces potential stress and financial risk.
What is the deal with flood insurance?
A flood policy protects the owner of a home or condo from water damage that rises from the ground up or indirect losses arising out of that flood water. A quick note, water damage that comes in through a broken window is not considered flood even though it is still water damage.
Florida is divided into different categories of flood zones - basically by how likely a specific area is to flood. In a nutshell, the X zone is the good zone, and the AE zone is the more likely to flood zone. There are other variations of these 2 zones, but these are the two mostly likely you will see in the Sarasota and surrounding area.
A lender will not require you to have flood insurance in an X zone, but you may want to anyhow. You likely will find it to be relatively inexpensive for that added peace of mind.
Conversely, a lender will require you to have flood insurance in an AE zone. (If you pay cash for a property, that will be completely up to you to carry a flood policy or, for that matter, even a standard hazard policy.)
The flood policy is a secondary policy to standard hazard home owners or condo insurance. The premium is based on which zone the property is in and the elevation of that specif property. As a note, a flood premium policy may not be overly expensive even in the AE zone if that property is elevated in relation to the flood level.
In order to get an accurate estimate of flood costs on a property in an AE zone that is not currently carrying flood insurance, the new buyer will likely be required to get an elevation certificate which can be done at the same time as a survey.
Most MLS listings have the flood zone depicted, but we always double check and your insurance provider will confirm as well.
To read more about flood, visit www.floodsmart.gov
In today’s Sarasota market, a significant number of buyers pay for their properties with cash - it is in excess of 60% of purchases.
You might wonder what is the significant difference between cash and a financed transaction? The biggest difference between the two from a seller's point of view is the potential risk of losing a buyer. In a cash transaction, typically there may be a "due diligence" period in which the buyer can cancel the contract and in most cases will be able to get his/her deposit back. That period is generally 15 days or less. After which, if the buyer cancels, the seller likely has a claim to the deposit. In a financed transaction, the buyer may not only has that same potential "due diligence" period up front, but will likely have a finance contingency that is typically 30 days in which, should the buyer have an issue with finalizing their financing, they likely will be able to cancel the contract and get their deposit back. The potential loss of time is the real driving issue that make cash offers more attractive in most cases.
And a cash offer can potentially provide the seller with a quicker, or more convenient time frame for closing because they are not bound by the lenders underwriting process.
If a financed buyer wants to increase his/her odds of getting a contract, here are some things to consider:
There are other nuances and issues that may impact the seller's willingness to work with a financed transaction. We have a lot of experience with both buyers and sellers and can help you navigate the transaction process.
So you decided to pursue a new construction home or condo. You might wonder if it is beneficial to register an agent as your buyer's agent with the developer, or, more importantly, is there any downside to registering someone.
Here is a detailed list of the potential negative things that can occur by registering a buyer's agent:
And here is a detailed list of the positive things that can benefit you by registering an agent:
1. No cost to buyer. The developer's in Sarasota area market very heavily to realtors and pay them a commission directly. That commission has already been budgeted in the project and the buyer does not realize any reduction in negotiating power or what they get for their purchase price.
2. Buyer representation. Keep in mind the on-site rep works for the developer. A good agent can help in negotiating acceptable terms and incentives while limiting risks.
3. For out of the area buyers, the agent can be the eyes and the ears for the buyer during the build process.
4. As a buyer's agent for new construction, we will provide up to 1% of the purchase price back to the buyer to be used toward their closing costs.
Don't go it alone, let us help.
Real Estate Taxes in the Sarasota and Surrounding Areas
Generally, in the current market, we are seeing the annual real estate taxes are running between 1.0% and 1.2% of the homes market value. That obviously can vary based on several factors, but overall, Florida has much cheaper Real Estate taxes as a percentage of home values than most other states.
When looking at the Real Estate Taxes for specific listings, it is a good idea to keep in mind a few factors including;