Deed Restrictions

Deed restrictions in this area limit the use or mandate certain guidelines of a property for the main goal of protecting home values and ensuring that owners can enjoy their property.  They are put into place and enforced by the home owners association which is made up of owners of that particular community. 

Some of the typical restrictions may be: 

• No RV's or Boats stored on lot
• No sheds
• Type of roof 
• Maintaining yard and home
• Rental restrictions

Others may include:

• No parking on street overnight
• No trucks in driveway overnight
• Certain style and color of mailboxes
• No above ground pools

Although some people do not like to have mandates or limitations on the use of their home, it is important to keep in mind that most of the restrictions are there to protect the home values of the owners.  Although the listing agents can provide a lot of the deed restrictions on a listing, it is still important for potential buyers to review the HOA documents and guidelines prior to purchasing a home (or within the due diligence period).     

In putting in the offer,  the standard practice is for a buyer to submit it in contract form so that all the terms are very clearly spelled out.  We will need the following details / info in submitting the offer:

Single Family Homeowners Insurance and Hurricane or Wind Coverage

Homeowners insurance in the Sarasota area is made up of standard hazard coverages and hurricane or wind coverage.  The hurricane part of it typically has a different deductible.  When getting insurance quotes, home buyers normally will need a wind mitigation report which is essentially a document that is provided by an inspector that is a roof inspection and window and door openings.  Owners receive a discount for hurricane shutters and or impact glass, and the way the roof is installed.  

Generally new policies, except on homes that are newly constructed, will require a wind mitigation report which can be completed by your home inspector at the same time that the home is being inspected during the course of working through the purchase process.  Some inspectors charge a nominal fee in addition to their home inspection fees.   

The age of a roof and the age of  hot water heaters are becoming a significant issue with buying homes in this area.  Underwriters are really starting to tighten their criteria on new policies - insurance agents are finding it difficult to find adequate policies on homes with 20 plus year old shingle roofs, and 25 plus year old tile roofs.  

Without adequate insurance, lenders will not be able to finalize the loan.  Additionally, lenders will have their roof inspectors inspect the roof soon after close of a property and underwriters do have the option to cancel a policy or require an owner to put on a new roof within a specified period of time. 

We make every effort to ensure that our clients are aware of these potential pitfalls / financial considerations prior to negotiating for a home.  

Buying a FSBO

Should you use an agent when considering a home that is For Sale by Owner?  

When looking at them, here are a few things to consider:

Use a buyer's agent. Typically FSBO's are prepared and willing to work with a buyer who is represented with an agent and they normally will agree to compensate the agent through a typical buyer's commission.  The peace of mind that a good buyer's agent will provide in negotiating and protecting your interest in all aspects of the purchase process is extremely valuable to you.  FSBO's are rarely priced appropriately so having an agent on your side gives you access to comparable sales data to help you negotiate the right price.

Home inspection.  A home inspection can identify any potential issues before you go through with the sale.  A good buyer's agent will have access to professional inspectors and can protect your interest through inspection contingencies built within the contract.

Other contingencies to your contract. Contingencies protect your financial interests and provide you with a means to rectify or get out of a  transaction should things not go as planned or issues arise. As an example, what happens if the property does not appraise? 

We have a strong track record of working with buyers who have decided to purchase a FSBO, so get in touch with us today if you have one in your sights.  

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 for any/all subdivisions of interest.  

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/exemptions/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 long an owner has to reside in a home on an annual basis 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 due 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:

        Get preapproved and provide a copy of the preapproval letter.

       Work with a good lender.  We recommend a local lender.  Most listing agents recognize that a lender who is not familiar with the local market and Florida transactions can slow down the process. Sometimes the bigger financial institutions are not the best for this market.

        A larger down payment or deposit sometimes can influence a seller's perception of a financed deal.

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:

1.  (None)

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. 

Don't go it alone, let us help.