3 Red Flags in Venice Contracts
Beware These 3 Red Flags in Venice Contracts
Quick Answer
Yes, there are three major red flags in Venice contracts that can jeopardize your deal. First, the Florida Statute 718 requires condo associations to provide an estoppel certificate, which can reveal unexpected fees or pending assessments. For example, discovering a $5,000 special assessment just days before closing can derail your financial plans. If these issues are uncovered late, you may face closing delays or even lose your deposit. 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
One major issue is the insurance binding process, especially on barrier islands like Venice. Due to coastal risks, insurance companies may deny coverage at the last minute, leaving buyers scrambling to secure a policy. I once saw a deal fall apart when the insurer pulled out two days before closing, forcing the buyer to either pay a significantly higher premium or walk away. This is governed by the Florida Office of Insurance Regulation, which oversees these insurance practices.
Another red flag is the HOA approval process, which can be a bottleneck. In Venice, some associations require extensive background checks and interviews, which can delay the closing. I had a client who was forced to renegotiate terms because the HOA approval came in late, impacting their financing timeline. This process is governed by the statutory requirements for HOAs in Florida.
Mike and Eric keeped an eye on my condo at Seaplace while I was away for the summer. I was so relieved to find these two agreed to do it. The nice fact was that their service is free. As Mike explained it, this is all part of their business model;performing services above and beyond for clients. You just don’t find this type of client service anywhere anymore. Always around when we needed them.
– N6194H, Zillow Review
Lastly, appraisal gaps can be a deal-breaker. In a hot market, properties in Venice often appraise for less than the agreed purchase price, leading to financing issues. I witnessed a buyer have to bring an additional $20,000 to the table when the appraisal came in low, or risk losing the property. This is a critical issue tied to lender underwriting systems.
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 buyers have already invested significant time and money into the process, including inspections and appraisals. When these red flags emerge late, buyers can lose their deposits, face unexpected costs, or even see the entire deal collapse.
What I Tell Clients Before They Risk Money
- Review Estoppel Certificates Early: Always request and review the estoppel certificate as soon as possible to uncover any hidden fees or assessments.
- Secure Insurance Binding in Advance: Confirm your insurance policy is fully bound well before closing to avoid last-minute denials.
- Understand HOA Approval Timelines: Know the specific approval process and timeline for your HOA to prevent unexpected delays.
- Prepare for Appraisal Gaps: Have a financial cushion ready in case the appraisal comes in lower than the purchase price.
- Verify Lender Conditions: Double-check all lender conditions are met well before the closing date to avoid financing issues.
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
My home buying experience with Mike and Eric continues to exceed my expectations, even long after the sale. Not only did they deal with me honestly and efficiently for the sale itself, their service didn’t stop there. They continue to keep an eye on my condo when I’m not there and have even referred rental clients to me, which has worked out very well! This is well beyond the norm in the real estate industry. Good, old fashioned service. I will be calling them again for my next purchase, for sure!
– ppugielli, Zillow Review
Questions Clients Actually Ask
What happens if the estoppel certificate reveals a special assessment?
If the estoppel certificate reveals a special assessment, you could be on the hook for thousands of dollars unexpectedly. This is why it’s crucial to review this document early in the process to decide whether to proceed with the purchase or renegotiate terms.
How can I avoid insurance issues at the last minute?
To avoid last-minute insurance issues, make sure your policy is fully bound well in advance of the closing date. The Florida Office of Insurance Regulation can provide guidance on approved insurers and policy requirements.
What should I do if the appraisal comes in low?
If the appraisal comes in low, you may need to bring additional cash to the closing table or renegotiate the purchase price. This is a common issue in hot markets like Venice and is tied to lender underwriting systems.
What To Do Right Now
Request the estoppel certificate from the condo association as soon as your offer is accepted to identify any potential financial liabilities.
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