Rich Cornelius

BUYERS: FREQUESTLY ASKED QUESTIONS

What Does a Title Company Do?

Orchestrates everything leading to the closing, issues title insurance to the
new owner and the lender, conducts the closing and handles post-closing
requirements.

· Works with Seller's lender to pay off mortgage(s)

· Works with Buyer's lender to set up new mortgage

· Conducts the closing

· Disperses funds, records deed and mortgage, sends signed loan documents to lender

· Issues the title insurance policy

What Should I do Before Closing?

· Apply for your loan and provide all necessary documents to lender.

· Make arrangements for Homeowner's Insurance as soon as possible.

· Have the Utilities placed in your name effective the day of closing.

· If you are using a Power of Attorney, have the title company review the document ahead of time. The Lender and Sunbelt Title must approve it before closing. Bring the Original Power of Attorney document to closing.

What Should I Bring to Closing?

· Your spouse if this will be your primary residence.

· A Cashier's check made payable to Sunbelt Title Agency if you are required to bring funds to closing. State law will not allow personal checks over $500.00 to be accepted. - or -

Wiring instructions can be obtained from Sunbelt Title.

· Government issued photo ID such as Driver's License, Passport or Military ID and your Social Security Number or Green Card.

· Original Power of Attorney document, if applicable.

What Happens at Closing?

The Closing is the final step toward owning your new home:

· Buyer signs closing and mortgage papers, brings funds and receives keys to property.

· Seller signs closing papers, gives keys to buyer & collects funds from sale of house.

· Title company disperses funds, pays off seller's mortgage, records new deed and mortgage.

· In about an hour everyone leaves happy.

What is Title Insurance?

· Unlike other insurance which protects what might happen in the future, title insurance protects you from what has happened in the past by searching public records.

· Provides coverage for losses due to defects in the title that occurred prior to your ownership.

· Protects against things such as unpaid taxes & liens, judgments, fraud & forgery or other issues that might go undetected until after closing. These could affect your ownership and investment.

What does Title Insurance Cost?

· Title Insurance is a one-time fee regulated by the State and is paid at Closing.

· The cost varies because it is based on the purchase price of the property.

· In this region, the seller customarily pays for the owner's policy which protects new owner. The buyer pays for the policy that covers the lender.

· Example: $100,000 purchase price = $575 for the owner's policy. The lender's policy is just $25.

· The protection lasts as long as you or your heirs retain an interest in the property.

What Expenses Should I Expect?

· Closing Fee

· Lender's Policy

· Endorsements to Lender's Policy, if applicable

· Recording Fee for the Warranty Deed and Mortgage

· Documentary Stamps on the Mortgage

· Intangible Tax on the Mortgage

· Survey, Termite Inspection, Condo Approval Fee, HOA Dues and Transfer Fee, if applicable

· Home Inspection Fee, usually paid at time of inspection

· First Year Homeowner's Insurance (and Flood Insurance, if applicable)

· Lender Fees. Appraisal and credit report are usually paid at time of application.

• Recording Fee for the Assignment of Mortgage, if applicable

Well, now is the time buyers begin the transition to our area OR within our area. Invariably, buyers with children are usually very curious about which schools their children will attend and rightly so. In Florida, they have adopted a school "grading" system which assists residents with determining which schools are succeeding and which might be struggling.

Florida schools grades can be found at http://schoolgrades.fldoe.org/

Let's say you have narrowed down where you want to live and beautiful Pinellas county, with it's miles of pristine coastline, numerous county parks, great infrastructure, and lovely residents is where you want to be. However, you have researched schools and found the schools you want your child(ren) to attend. As you look at homes, you wonder "How do I know what schools they will attend?". Well, here's your answer:

https://sap.pinellas.k12.fl.us/PubInfo/

Type in the number and street of the prospective property and you will know what zone you are in. ****This does not guarantee assignment to this school**** You will want to verify with the district exactly what school your children will attend.

Similarly, Pasco County Schools has a website will tell you what schools your home is zoned for:

http://webdb.pasco.k12.fl.us/fmi/iwp/cgi?-db=PascoBoundaries&-loadframes

And finally, Hillsborough County Schools allows parents to view assigned schools at:

http://www.sdhc.k12.fl.us/choice/attendance.asp

I wanted to take a moment and speak to buyer, sellers, and homeowners in general about a subject that makes us cringe...no, not our 401k's....

...termites. Yes, those creatures that are almost invisible until you find out you have them, and then you think you see them anywhere. Let's start with some basics...

There are 3 kinds of termites specific to our area:

Subterranean (aka Formosa)

1. Drywood
2. Dampwood

For our purposes, we'll stick to subs and drywoods because they are most relevant to property owners (and those soon to be).

Subterraneans are the most aggressive form of termites in that they can demolish a home in months, thanks in large part to their voracious appetites and large colonies. Subs attack a home from the ground - foundation cracks, wall fissures, pipes, and untreated wood touching the ground are common avenues for subs. They have even been known to build "mud tubes" to protect them from the elements as they travel across non-wood materials.

Drywoods are a very common termite in Florida and if you were to have any infestation, you would want these guys. They come uninvited, eat very slowly, and sometimes move on to greener pastures (read: your neighbor's home). Drywoods travel via flying...when they swarm Jan-May (depending on temp and rain), pairs travel to new areas to start colonies. With block homes, drywoods typically fly up into the eaves and will get in the attic, which is all wood.

That info is nice to know, but how does that help YOU??? Good question. The first thing I have learned is NOT to fear these little buggers (excuse the pun). Once you understand them and how they exist, they are more of a slightly expensive nuisance than anything else (caught early enough, that is).

The 2^nd thing to know is that their presence does not signify the end of the world, or your transaction, for that matter. Real Estate contracts have Wood-Destroying Organism (WDO) clauses in them that provide for treatment should termites or wood decay be discovered. Educated Buyers and Sellers know that tenting your average 1500 - 2000 sf Florida ranch will run about $1000 - $1500, normally comes with a multiyear warranty, and can be done before a new buyer moves in. Buyers of SFH should always get a termite inspection - they cost $50 - $75 and can be done concurrent with a regular home inspection. Please know that Florida law has changed with respect to inspectors - inspection reports are considered valid for that day ONLY, as termites can appear as the inspector pulls away in his car.

3^rd, ALL homeowners and homebuyers need to know what to look for when viewing a home, in addition to having an inspection completed. Mud tubes on the exterior, "galleries" of eaten-through wood, mustard-colored round pellets (drywood), wings, and debris around windows and doors are all indication of current or past termite infestation. One of the biggest problems with termites is that they eat wood JUST BELOW the surface, sometimes keeping the problem hidden for months and years.

APRIL HOME/CONDO SALES NUMBERS FOR THE TAMPA BAY AREA!

It is my personal belief, given the unemployment rate, plummeting incomes, and the inflation just around the corner, that our market has quite a bit of time ahead of it before it "turns the corner". However, April sales numbers are surprisingly strong, given the last 6 tumultuous months.

However, strong is a relative word. 9 out of every 100 homes sold in April...quite a difference from the meteoric (and now unsustainable) 30 to 40 homes per 100 sold in 2005 - 2006. Single family homes, which make up roughly twice as much of the Tampa Bay market as condos do, registered the strongest performance, most likely owing the the fact that prices have receded to 2002 & 2003 levels.

Beach properties are still weak, but much stronger than recent prior months. Final sales prices for all classes of homes are in the low 80% range...meaning that if you list your home, on average you will sell it at around 80% of it's initial listed value...Sellers, take note!!!

TAMPA BAY AREA (tri-county) Homes Condos Total Units

Total Units Available: 21,748 10,440 32188

Total Units Pending: 3,352 922 4,274

Total Units Sold: 1,942 585 2,527

Absorption rate: 8.93% 5.6% 7.85%

Avg Days on Market 100 days 111 days 103 days

Months of Inventory 11.2 mons 17.8 mons 12.7 mons

Sold vs List Price % 93% 91% 93%

Sold vs Original List Price % 83% 80% 82%

PINELLAS COUNTY Homes Condos Total Units

Total Units Available: 7,675 6,122 13,797

Total Units Pending: 1086 460 1546

Total Units Sold: 645 301 946

Absorption rate: 8.40% 4.92% 6.86%

Avg Days on Market 94 days 120 days 102 days

Months of Inventory 11.9 mons 20.3 mons 14.6 mons

Sold vs List Price % 92% 90% 92%

Sold vs Original List Price % 82% 81% 82%

N. BEACHES (476-478, 370-375) Homes Condos Total Units

Total Units Available: 677 1772 2,449

Total Units Pending: 55 100 155

Total Units Sold: 46 69 115

Absorption rate: 6.79% 3.89% 4.70%

Avg Days on Market 93 days 146 days 125 days

Months of Inventory 14.7 mons 25.7 mons 21.3 mons

Sold vs List Price % 92% 91% 91%

Sold vs Original List Price % 83% 80% 82%

Just what are sellers required to disclose to you, the buyer, as you contemplate purchasing their property? According to the state of Florida, sellers MUST disclose any fact that MATERIALLY AFFECTS the value of the property.

So what does that mean? What about that stuck window in the guest BR? Or the time the pipe backed up and the toilet flooded? Does a seller have to disclose that someone PASSED AWAY in the home?

The answers are YES, YES, and NO!

I counsel my sellers to disclose ANYTHING that they think might affect the value of their property in the buyer's eyes. Does that include the stuck window? Yeah, it should. Here's why:

1. Buyers are appreciative of a seller being forthright and honest, no matter how trivial it may seem. Most buyers are understanding of a window that won't open or a toilet flooding or a roof leak that was repaired, etc.
2. There is a good chance a material defect will come out on a home inspection and the Buyer's will find out anyway. In some cases, depending on the way the defect is described to the Buyer by the home inspector, it may cause them to cancel the contract.

To go back to the question about disclosing someone's death in the residence, Florida has ruled that home sellers DO NOT have to disclose that fact as it does not MATERIALLY affect the value of the home. It may creep some people out, but that alone does not meet the statutory requirements for disclosure.

In real estate, the age-old adage is: LOCATION, LOCATION, LOCATION.

the new real estate adage that keeps people out of hot water is: DISCLOSE, DISCLOSE, DISCLOSE.

The most efficient and legally accepted way to tell a buyer about anything that materially affects the home's value is through written "Seller's Disclosures". Normally, when a client expresses interest in a certain property, their agent requests the written seller's disclosures before making an offer or just to get better insight on the property. The disclosures can be anywhere from 1 - 5+ pages and will include areas such as land, structure, plumbing, electrical, roof, mold, and other areas.

The NEWEST disclosure is CHINESE DRYWALL. Primarily affecting homes built from 2003 - 2007, this drywall has excess organic material within it and gives off corrosive vapors. Lawsuits are already starting to fly over this issue...