Destin Florida Short Sales & Real Estate

"Did you get the contract signed by your seller?”  The offer expired yesterday!

"Why won’t your buyer sign the document?”  We need it now for short sale approval!

"Your seller did not sign the earnest money release!”  We’ll go to court.

Guess what?  You cannot make your buyer or seller DO anything.  You can relay a message.  You can make a suggestion. You can advise they speak to an attorney.  But you cannot MAKE them do anything.  

This week I had two unfortunate calls from other brokers.  One stated his buyer would go to court and it would be "ugly” if my seller does not sign a release of contract.  The other broker called one of my agents and threatened that if our buyer didn’t sign a document, he would be in violation of the contract.

Well, you know what? That is not my decision nor your decision to make.  That’s the buyer’s or seller’s decision.  They can choose not to sign, they can choose not to respond by deadlines and they can choose to take no action.  All you can do is tell them what the deadlines are (that they should be able to read on their own) or relay a request.  Sure, you can relay a threat, too. 

All too often I see agents act like attorneys.  I see them get emotional and insert themselves into contracts.  They are treading on dangerous territory.  The Realtor Code of Ethics states we cannot practice law. 

Article 13

Realtors^® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.

So, skip the strong arms tactics. We all wish our sellers and buyers would comply with contracts and deadlines.  Sometimes they don’t.  Leave the deciding to the client.

It's Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

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Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. 

We often hear stories about buyers defaulting on contracts to purchase real estate.  They "walk", they don't deposit their earnest money, they don't apply for their mortgage on time, they don't close by the closing date.  But how often do you hear about SELLERS defaulting?

First, let's get the definition of default. According to the Florida Association of Realtors Residential Sale and Purchase Contract, Default is: "Seller fails, refuses or neglects to perform this contract".

I am not an attorney, but some examples of what seller default might be:   failing to act on a required repair item, neglecting to remove tenants if specified in the contract, refusing to close. 

Well, I had two cases in the last week.  One example: I represent the buyer and the seller has decided not to do a required wood rot repair.  The seller claims "he has done enough improvements" and is not doing any others.  "The buyer should be happy." 

According to the Florida contract, in the case of seller default, the buyer may "choose to receive a refund of buyer's deposit, without waiving the right to seek damages, or to seek specific performance".  The contract goes on to outline the methods of dispute resolution.

The question is, with such a "minor" default, who would bother?  If the wood rot is $100, should the buyer delay the closing to go through mediation, especially when he needs a home?  If the seller did not leave the house broom-clean, if he failed to remove tenants on time, if he removed a small "attachment", should the buyer go to arbitration?  If the closing were delayed a few days, and their is no per diem penalty paid, oh well?

In Florida, on both the buyer and seller side, these are not uncommon occurences.  The problem is, if no one enforces the contract, nothing will change.  You see, it is not normal custom in Northwest Florida to have individual attorney representation for our closings, like many other states.  Thus, in the case of a default, the buyer or seller would have to spend extra monies to hire an attorney.  They usually won't.

That is why Florida real estate transactions tend to have many of these nuisance defaults, and no one bothers. What say you?

It's Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Destin Florida Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Wendy's Destin Real Estate Blog

Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. 

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The Florida Association of Realtors uses two different versions of the purchase and sale agreement.  One is called " FAR  (Florida Association of Realtors)" the other " FAR BAR" (Florida Bar Association).  In different parts of the state, real estate agent communities have their own customs as to which version they use.  In my Destin FL area, for example, the FAR contract is more common.  But a few towns over, in Pensacola, the FAR BAR is prevalent.  Now the Florida Association of Realtors is proposing to combine both contracts and make further changes.  The decision whether to proceed with the new contract will be made on August 23, during the FAR Annual Convention & Trade Expo.  I have reviewed the 21 proposed changes and sent my comments in to my board at the Emerald Coast Association of Realtors.  You should  do the same, as your input is requested.

Here are my thoughts on the changes:

1.     Paragraph 1. d.  I find it odd that personal property check boxes include “shed” and other items that might be potentially removed, but don’t include “Window Coverings ”.  The new version states window covering automatically stay. If the contract is taking the stance on questioning items that typically stay, like a shed, it should do the same with window coverings for the sake of consistency

2.     125% escrow for repairs not completed – implies that buyer MUST close if repairs are not done by seller .   As a buyer, I would be leery to close – what if the air conditioner did not work? Close anyway?  Wait six months for the seller to repair? It might never be repaired, as the money sits in escrow.  Forcing a buyer to accept that term is far too much micro-management of a contract between buyer and seller.  I would line it out if I were representing a buyer.  This should be removed from the contract.  Ditto to RISK of LOSS provision, which also forces the buyer to accept the property after fire or other casualty, and just accept an escrow until repairs are made.

3.   If seller has a title policy, he shall provide a copy to buyer and closing agent within 5 days .  Most sellers have one, but can they find it?  Most cannot find all their paperwork, so the seller would be in default of the contract if he couldn’t find it.  It would be “nice” if they provided it, but to stipulate it in the contract is excessive and not realistic.  Remove this requirement.   

4.  If the seller has a survey, to provide to title agent within 5 days .  I suppose that could cause issues if a seller has one, but cannot find it. VERY typical…  Thus buyer could claim seller is in default…  if they don’t comply.  This should be removed.

5.   Define “financial failure” of lender … The new contract version says a buyer can get his deposit back if the closing is not funded due to "financial failure" of his lender.  I can see a situation where funds didn’t make it to closing on time, so hypothetically, the lender failed financially.  This needs to be more clear.   Lender “out-of-business” or something more specific should be used here. Another example, a bank was taken over or merged.  That might also fit the definition of “financial failure”- but in essence, the closing could still be funded.  That might be used as an excuse for a buyer not to close.

6.   Change to closing to occur on or BEFORE closing date as mutually agreed .  This comes up again and again.  Otherwise, the contract says closing must occur ON an exact date.

7.   Remove same county closing restriction We often have closings one county away.   It should state, “unless otherwise agreed between buyer and seller.”

Finally, ONE POINT that is mentioned nowhere in our Florida purchase and sale agreement- Buyer or Seller shall pay a per diem penalty should they not meet the closing date.  Other states have that, and I believe it is the cause of sloppy closing date adherence in Florida.

What are your observations on the new Florida real estate contract proposal?

 It's Wendy!

I am primarily a listing agent in the Destin Florida market.  In a normal week, I receive several offers on my properties all around the Emerald Coast.  How many of these contracts are filled out correctly?   Nary a one.  Today I received an offer on a home in Niceville Florida.  It was hard to even figure out what the offer was. First, the buyer's agent wrote the purchase price on the contract line labeled "deposit".  She left the "purchase price" line blank. Next she checked off  "cash with no financing".   Next to that she checked "VA financing".  She wrote in a closing date of March 31, about three weeks from now, but allowed the short sale lender 90 days to approved the contract.  Are you starting to see something amiss here?

To top it off, she included her own comparative market analysis to justify her buyer's price.  As if I would forward her price opinion to my seller, to supercede the one I did for them.  What was she thinking?

I emailed the agent back, asking:

1. Is the earnest money "deposit" of $200,000 "really" the offer amount?

2. Are the buyers paying "cash" or doing "VA financing", as you checked both?

3. Do the buyer expect to close in three weeks, but allow the lender three months to make the decision? 

I have not nit-picked agents' contracts too much in the past, but this year, I am done with being so nice. Now is the prime time to elevate the profession of selling real estate.  Fill out your contracts correctly -- or expect a lot of cross-outs and initials until you get it right.

It's Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Search All Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Destin Real Estate Blog

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com

Call Wendy Rulnick, Destin real estate agent, to list and sell your home or condo or help you buy a home or rental property on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.   Wendy is a short sale and pre-foreclosure specialist and can help you sell or buy a short sale property in and around Destin Florida and the Emerald Coast.

All Rights Reserved. *Lesson #1 in Real Estate:  Learn How to Fill Out a Contract * Contact Wendy Rulnick regarding Destin Florida real estate and vicinity. Copyright © 2009 by Wendy Rulnick.

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