3 Closing Mistakes in Bird Key
Avoid These Costly Closing Mistakes in Bird Key
Quick Answer
Three common closing mistakes in Bird Key can jeopardize your real estate deal: insurance binding failures, HOA approval delays, and unexpected appraisal gaps. Florida’s Office of Insurance Regulation and HOA statutory processes can create significant hurdles if not navigated correctly. For example, an insurance binder denial can force a buyer to bring an additional $50,000 to the table unexpectedly. Discovering these issues late can lead to deal termination or costly renegotiations. Call me at 941.400.8735 or reach out directly to Michael Renick – I’ll share my approach with you.
What Actually Breaks Deals in Florida
Insurance Binding Failures
The problem arises when insurance binders are denied just days before closing, often due to the unique barrier-island risks associated with Bird Key. Governed by Florida’s Office of Insurance Regulation, these denials can occur if the property doesn’t meet specific underwriting criteria. In one instance, a buyer was forced to scramble for a new policy at a much higher premium, risking the entire deal. The consequence is a potential loss of the deposit or the need to bring in unexpected cash to cover the shortfall.
Purchasing a home can be a time-consuming and stressful venture: visiting prospective homes; identifying the pros and cons of each property; deciding which properties are right for you; final visit at these properties; making an offer (and counteroffer); dealing with the Sellers realtor; reviewing the Agreement For Sale; finding an attorney; finding a home inspection company; and acquiring home and flood insurance. Then the difficult task starts, working with a bank and filling out all the paperwork (Ugh!). Mike and Eric were very helpful throughout the process and kept us informed of our requirements and responsibilities for each deadline.
– bshea20047, Zillow Review
HOA Approval Delays
HOA approval processes can bottleneck transactions, especially in communities like Bird Key with stringent requirements. Governed by Florida Statute 720, these approvals can take longer than anticipated, particularly if the HOA has a backlog or requires additional documentation. I once witnessed a deal fall apart because the HOA approval came through a week after the scheduled closing date, leading to the buyer walking away. The consequence is not just a lost deal but also potential legal ramifications if deadlines are missed.
Unexpected Appraisal Gaps
Appraisal gaps can occur when the property’s appraised value falls short of the purchase price, a common issue in Bird Key’s competitive market. This is often a result of lender underwriting systems that adhere strictly to appraisal conditions. I recall a case where the appraisal came in $30,000 below the agreed price, forcing the buyer to renegotiate or cover the gap out-of-pocket. The consequence is a potential deal collapse or the need for additional funds that the buyer may not have anticipated.
Where It Usually Blows Up
These issues typically surface during the final stages of the transaction, often just days before closing. This timing is brutal because all parties are financially and emotionally committed, and any disruption can lead to significant losses. Buyers or sellers stand to lose deposits, incur additional costs, or face legal disputes when these problems are discovered late in the process.
We had a great recommendation for Mike Renick and Eric even before we were in the Sarasota area from a former client of his summering in Baltimore whom we happen to meet. When we decided to actively start looking for a place in the Sarasota area, I spoke to Mike over the phone and he was truly courteous and welcoming. When we came down in person, he first took the time to get to know my wife and I personally to better gauge what would work best for us. Since we had limited time, he was unsparing of his own time to efficiently but thoroughly show us the inventory that would work best for us. He patiently explained the pricing rational and the factors that go into these considerations. He helped us through the closing procedures and assisted us in issues such as homeowners and flood insurance. The bottom line– we bought a place that was utterly perfect for us due to his extraordinary effort. We met Eric toward the end of our process, as he was on vacation initially, but I could readily see he is a man of great knowledge and integrity and capability, as was Mike. I highly and without any reservation recommend Mike and Eric to anyone in the market for Sarasota area real estate. You will not be disappointed!
– Ronald ginsberg, Google Review
What I Tell Clients Before They Risk Money
- Verify Insurance Early: Ensure your insurance binder is confirmed well before closing to avoid last-minute denials.
- Check HOA Timelines: Understand the HOA approval process and timelines to prevent unexpected delays.
- Order an Early Appraisal: Get an appraisal early in the process to identify potential gaps and address them upfront.
- Review Statutory Requirements: Familiarize yourself with Florida Statutes 718 and 720 to understand your rights and obligations.
- Prepare for Contingencies: Have a financial buffer to cover unexpected costs like appraisal gaps or higher insurance premiums.
Let’s continue this conversation.
Call me at 941.400.8735 or schedule a 15-minute call. I’ll tell you what I would look for.
Call 941.400.8735 or Schedule a Call
Questions Clients Actually Ask
What happens if my insurance binder is denied?
If your insurance binder is denied, it can delay or even derail your closing. Without proper insurance, lenders typically won’t proceed with the transaction, potentially leading to a loss of your deposit or the need for costly last-minute solutions.
How can HOA approval delays affect my closing?
HOA approval delays can push your closing date back, which might result in penalties or even contract termination if deadlines are missed. It’s crucial to understand the HOA’s timeline and requirements to avoid these pitfalls.
What should I do if there’s an appraisal gap?
If there’s an appraisal gap, you may need to renegotiate the purchase price or bring additional funds to the table. This situation can be financially straining and may require quick decision-making to keep the deal alive.
What To Do Right Now
Request a copy of the HOA’s rules and approval process early in your transaction to understand potential delays and requirements.
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