Avoid Contract Errors in Sarasota

Avoid Contract Errors in Sarasota

What Actually Breaks Deals in Florida

Condo Association Approvals

The problem often arises when buyers assume condo association approvals are a formality. Florida Statute 718 requires specific financial disclosures, and associations can deny applications based on these. In one deal, a buyer was denied approval due to the association’s financial instability, leading to a contract collapse. The consequence was a lost deposit and the need to find a new property quickly.

We recently closed on our dream home due to Eric Teoh’s market knowledge and expertise. His grasp of the market and his hands on approach were instrumental to our successful purchase. Eric had remarkable market information available at a moment’s notice. He skillfully assisted us in preparing our strategy. He interfaced with our seller, assisting while remaining professional. I wholeheartedly recommend Eric Teoh as a valuable resource in any Sarasota real estate transaction.

– N Isaacson, Google Review

Insurance Binding Failures

Insurance issues are another common deal-breaker, especially on barrier islands like Longboat Key. The Office of Insurance Regulation oversees policies, and binding can be denied if the property doesn’t meet certain criteria. In a recent transaction, an insurance binder was denied days before closing due to a roof inspection failure. This resulted in a delayed closing and additional costs for the buyer to secure alternative coverage.

Where It Usually Blows Up

The most brutal timing for these issues is during the final stages of underwriting. At this point, buyers have often invested significant time and money, and discovering problems can lead to financial losses or missed opportunities. When issues surface late, buyers might lose their earnest money deposit or face costly renegotiations. Sellers, on the other hand, risk having to relist their property, potentially at a lower price if the market shifts.

What I Tell Clients Before They Risk Money

1. Review Condo Documents Early: Ensure all condo association documents are reviewed during the inspection period.
2. Secure Insurance Quotes in Advance: Obtain insurance quotes before the inspection period ends to avoid last-minute surprises.
3. Understand Lender Requirements: Clarify all lender conditions upfront to prevent underwriting delays.
4. Check Permit and Code Compliance: Verify that the property complies with local building codes to avoid costly repairs.
5. Confirm Association Approval Process: Understand the timeline and requirements for condo or HOA approvals to avoid unexpected denials.

Questions Clients Actually Ask

What happens if the condo association denies my application?

If your application is denied, the contract can be terminated, and you might lose your deposit. Florida Statute 718 requires associations to provide specific reasons for denial, which can sometimes be challenged or negotiated.

Can I back out if insurance is denied?

Yes, if insurance is denied and you can’t secure coverage, you may have grounds to terminate the contract. However, this must be done within the contingencies outlined in the contract to avoid losing your deposit.

What To Do Right Now

Engage a real estate attorney to review all contract documents and contingencies before signing.

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

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To read more about what Michael shares with his clients:

https://blog.teamrenick.com/