5 Financing Risks in Siesta Key
5 Financing Risks in Siesta Key
Quick Answer
Financing risks in Siesta Key can derail your real estate deal if not managed carefully. Florida’s unique systems, like the condo questionnaire and insurance binding requirements, create specific challenges. For example, a deal I handled fell apart when the insurance binder was denied just days before closing due to the property’s location on a barrier island. Discovering such issues late can lead to lost deposits and forced 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: In Florida, especially on barrier islands like Siesta Key, securing an insurance binder can be a nightmare. The Office of Insurance Regulation oversees these policies, but local factors like hurricane risk can lead insurers to deny coverage at the last minute. I once saw a deal collapse three days before closing because the insurer pulled out, leaving the buyer without required coverage. The consequence was a lost deposit and a scramble to find alternative financing.
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
Condo Approval Delays: Florida Statute 718 governs condo associations, which can be a bottleneck in the approval process. During one transaction, the condo association delayed approval due to incomplete reserve studies, a requirement post-Surfside. This delay pushed the closing date back, causing the buyer to incur additional costs and nearly lose their financing lock-in rate. The pressure of these delays can force buyers into costly decisions or even contract termination.
Where It Usually Blows Up
These issues often surface during the final stages of the transaction, such as underwriting or just before closing. This timing is brutal because buyers have already invested significant time and money into the process. When problems like insurance denials or condo approval delays arise late, buyers risk losing their deposits, face increased costs, or must renegotiate terms under pressure.
What I Tell Clients Before They Risk Money
- Insurance Check: Verify insurance availability early, especially for barrier island properties.
- Condo Questionnaire: Ensure the condo association has completed all necessary documentation.
- Reserve Studies: Confirm that reserve studies are up-to-date to avoid approval delays.
- Underwriting Conditions: Meet all lender conditions well before the closing date.
- Appraisal Gaps: Be prepared to cover any appraisal shortfalls with additional cash.
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, you may not be able to close on the property, as lenders typically require proof of insurance. This can lead to losing your deposit and having to renegotiate terms under less favorable conditions.
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
How do condo approvals affect my deal?
Condo approvals are governed by Florida Statute 718, and delays can push back your closing date. This can result in increased costs, such as extended rate locks or temporary housing, and in some cases, it can jeopardize the entire transaction.
What To Do Right Now
Contact your insurance agent and lender early in the process to confirm that all requirements will be met well before closing.
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