Can a Hurricane affect my closing?

The answer is YES, and it likely will!

Just imagine this scenario. You and your Realtor found the perfect home.  You are scheduled to close on Friday just in time to unpack a few boxes and start your new job on Monday.  You received quotes from three insurance companies for homeowners insurance, and decided on one.   However, you decided to wait until two days before closing to finalize and bind the policy (and pay for it).  The Sunday before closing, a storm develops and looks like it may approach Florida at some point within the next week.  Your insurance company decides to stop binding policies, which means you won’t be able to get insurance the day you close on your new home.  Since the home will not be insured, your mortgage lender says they will not fund your loan until you obtain insurance.  You are now stuck finding a hotel to stay in so that you can start your new job on Monday.   To compound the situation, your insurance company informs you that they will not begin issuing new policies until several days after the storm has passed.  Once your insurance company lifts their moratorium on issuing policies, they inform you that your new home must be re-inspected before they will issue the policy.  Further compounding the complications, your mortgage lender also informs you that the home must be reappraised before they will close the loan.  What will you do?

This is a likely scenario during Hurricane Season in Florida, and many inexperienced real estate agents don’t advise buyers and sellers about this possibility, and how to avoid it.

If you are a buyer or seller who is working with an experienced, knowledgeable Realtor in Florida, you may have heard them mention something called “The Box.” For years, insurance companies have suspended binding coverage once a named storm enters “The Box”, which is a geographic region surrounding the State.  Between June 1^st and November 30th, Florida enters our Hurricane Season.  If a named Tropical Storm or Hurricane entered a zone referred to as “The Box”, homeowners insurance companies would suspend binding coverage.

It is still surprising to many people that most insurance companies stop binding policies in the event that a named storm is threatening Florida, specifically if a Tropical Storm, Hurricane Watch or Warning has been issued by the National Weather Service for any part of our state. While a few insurance companies, like Tower Hill, still have their version of the “box” to watch out for, many have evolved their procedures and stop issuing new policies or making changes to existing policies once a storm watch or warning is issued for a specific coast, or in some cases, a specific county.   “It’s always a good idea to talk to the agent you’re working with when storms approach”, says Insurance Broker Zane Lefko with John Galt Insurance Agency, “Once we have a hurricane watch, most insurance companies will begin suspending binding authority on new policies.”

If the buyer of a home is purchasing the home with a mortgage or other financing, the lender most likely will require that the buyer obtain homeowners insurance on the home.   Many buyers wait to “bind” their insurance policies either the day before or the day of closing.   If the insurance company will not bind the policy because of a named storm, the closing most likely will not happen.   Fortunately, most contracts provide a clause for this situation called Force Majeure.

Force Majeure is unforeseeable circumstances that prevent someone from fulfilling a contract.   Since the named storm is an act of nature, and not the fault of either the buyer or the seller, the Force Majeure clause in the contract typically goes into effect.   The FAR/BAR As Is Residential Contract for Sale and Purchase, a contract often used by real estate professionals in Florida, defines Force Majeure as "hurricanes, floods, extreme weather, earthquakes, fire, or other acts of God, unusual transportation delays, or wars, insurrections, or actions of terrorism" and provides that "All time periods, including Closing Date, will be extended a reasonable time up to 7 days after the Force Majeure no longer prevents performance under this Contract, provided, however, if such Force Majeure continues to prevent performance under this Contract more than 30 days beyond Closing Date, then either party may terminate this Contract..." 

This means that during an active hurricane season, it IS still possible for a buyer to lose their perfect home or for a seller to lose the sale of their home because a buyer didn't bind their insurance soon enough.  Of course, if this worse case scenario didn't happen, simply delaying a closing can cause hardship and issues for some buyers and sellers, even under the best of circumstances.

The National Oceanic and Atmospheric Administration (NOAA) is predicting a likely range of 13 to 19 named storms during the 2020 Hurricane Season, of which 6 to 10 could become hurricanes.  The first named storm of the season, Arthur, already occurred earlier in May before the official start of Hurricane Season. 

To prevent these closing issues, a good Realtor will advise a buyer to lock in their insurance and obtain an insurance binder as soon as possible, and BEFORE the closing date.  Once a closing date is scheduled, buyers should contact their insurance agent and purchase a policy as early as possible during Florida’s Hurricane Season.  Don’t delay! Bind right away!

Zane Lefko is a Licensed Insurance Broker with The Lefko Group at John Galt Insurance Agency and has worked with several of the Bobby Poth Homes Team clients and customers. 

We all know that homeowners, in most cases, carry insurance policies protecting their property.  These policies insure their home or property, and often the contents of the home or property, in the event of damage or disaster.   What many renters don’t realize is that these policies, in most cases, do not cover any of the renter’s belongings. 

What does this mean for you as a renter?   If the property being rented is destroyed or damaged due to a fire, windstorm, or busted pipes, the landlord’s insurance will pay to repair the property, but will not pay to replace your couch, clothing, or computer.  Additionally, your lease likely states that the landlord is not responsible for damage to these items.   Unless you have a renter’s insurance policy, you are also going to be responsible for your own moving expenses in the event the home you are renting is damaged.  According to State Farm Insurance Agent David Vargas “Many renters don’t realize they aren’t protected until it’s too late.”

Vargas, whose State Farm office is located in the heart of St. Petersburg, Florida, points out that the biggest component of renter’s insurance is what they call “Loss of Use”, “If the renter is displaced due to a loss, we pay up to 35% of the cost to relocate them and cover their relocation rent.   But, that is by no means the extent of their coverage”, says Vargas.  “Renters insurance can also cover property when it’s not even in a tenant’s home.  Say, for example, a laptop or expensive camera equipment is stolen while the renter is on vacation, it’s often considered insured property and in many cases is still protected by the insurance policy whether or not it’s inside the dwelling.” 

A good renter’s insurance policy can often be obtained for an average of $18.00 per month, a small price to pay to protect thousands of dollars in personal belongings.  Not all policies are created equal, however.  Before paying for a policy, a renter should always look at the fine print.   It’s important to ask your insurance professional what it covers, and make sure you understand the specifics of the policy.   It’s also important to take inventory of what you own.   A renter’s policy is likely going to cover the replacement cost of items, so determine how much it would cost to replace the items you own.   You may be surprised that it can be as high as $20,000 or more when you factor in the cost to replace your items with similar ones.  If you are a pet owner, check to make sure you are covered for liability in the event that the pet causes damage to property or people.  According to Vargas, “Our State Farm policies do not exclude any breed of dog.  Renters should always check to make sure this is the case before they pay for a policy.”

When Hurricane Irma made its way through Florida in 2017, many residents in the St. Petersburg and Tampa Bay area, as well as throughout the state, were without power for several weeks.  Many families lost food in their fridge, which can be costly if you are living paycheck to paycheck and meal-planning.  Neighborhoods were rallying together to feed families.  These perishable contents in their fridge likely would have been covered under a renter’s insurance policy.  “Also, their policies may have paid for them to relocate to a property comparable to the one they were living in”, according to Vargas.  “In a state like Florida, especially during our active hurricane season, it’s even more important that renters talk to an insurance professional to make sure they are covered.”

Written by Bobby Poth is the Broker/Owner of Poth & Associates Real Estate and Packard Property Management Group in St. Petersburg, FL and can be reached at bpoth@pothandassociates.com.

David Vargas is a State Farm Insurance Agent and owner of David Vargas- State Farm Insurance in St. Petersburg, Fl and can be reached at david@davidinsured.com.  

It’s August in Florida and a hurricane is approaching Florida’s Gulf Coast. You bought your home three years ago, and since it wasn’t in a flood hazard area that required you to carry flood insurance, you didn’t purchase a flood insurance policy. You’re living in St. Petersburg, Florida, which is a peninsula on a peninsula, so your city is surrounded by water. Before you know it, the water levels have risen, and water has creeped into your house. You think “No problem, I’ll file an insurance claim”, and that’s where the trouble starts. Your insurance agent says “Bob, I’m sorry this has happened to you, but your homeowner’s insurance does not cover the water damage.” You frustratingly hang up the phone and review your policy and realize that your insurance agent is correct, those rising waters were not covered!

Most homeowner’s insurance policies do NOT cover flood damage to homes. According to floordmart.gov, more than 20 percent of flood claims come from properties outside high-risk flood zones. According to State Farm Insurance Agent David Vargas “Many property owners who are not in a high-risk area qualify for Preferred Risk Policy rates, which can be as low as $400.00 per year.” These preferred areas include flood hazard zones B, C, X, AR, and A99 zones.

As a real estate company, Poth & Associates Real Estate always recommends that our clients carry flood insurance, even when it’s not required. “A homeowner can’t prevent a flood, but they can prevent a financial disaster by making sure they are insured”, says Poth & Associates Real Estate Agent Stephanie Pia, “houses off the water can flood just as easily as houses on the water, so I encourage everyone to protect their investment.”

According to Vargas, this is a smart idea. “When you look at the number of flood insurance claims filed by homeowners who are not in high flood risk areas, it just makes sense to protect yourself.” According to FEMA’s National Flood Insurance Program, Federal disaster assistance is only made available when there is a Presidential Disaster Declaration, and most flood events do not result in a declaration. Federal disaster aid typically comes in the form of low-interest disaster loans that must be repaid. According to Vargas, this is where the importance of flood insurance comes in. “FEMA’s low-interest loans are often around $5,000, and one-inch of water damage can cause over $25,000 in damage to someone’s home” says Vargas, “Flood insurance would cover that damage, and the cost of those repairs does not have to be repaid.”

It’s not just homeowner’s that should be protected. Renters may also qualify for flood insurance policies. In addition to renter’s insurance, renters can also purchase an NFIP flood insurance policy to protect their belongings if a flood disaster occurs.

As we enter Florida’s Hurricane Season, many insurance and real estate agents are reminding their clients about the importance of Flood Insurance. “We are sending emails to clients to remind them to check their insurance policies to make sure they are protected”, said Pia.

Post written by Bobby Poth, Broker/Owner of Poth & Associates Real Estate in St. Petersburg, FL. bpoth@pothandassociates.com.

David Vargas is a State Farm Insurance Agent and owner of David Vargas- State Farm Insurance in St. Petersburg, Fl and can be reached at david@davidinsured.com. Stephanie Pia is a licensed Sales Associate with Poth & Associates Real Estate in St. Petersburg, FL and can be reached at spia@pothandassociates.com.  

On Saturday, June 22, Poth & Associates Real Estate agents, clients, customers, and supporters participated in the 17th Annual St. Pete Pride Parade.   Our team is committed to fair housing for ALL people, regardless of Race, Color, National Origin, Religion, Sex, Familial Status, Disability, Sexual Orientation, or Gender Identity.  We are proud to include categories in our company non-discrimination policy that are not yet included in either Federal or Florida fair housing laws.  Here are some pictures of our fun!

St. Petersburg, FL ranks #3 for TOP LGBT PLACES TO LIVE!  With St. Petersburg and cities around the country celebrating PRIDE month, we feel it's fitting to post a link to this fantastic article!  

https://www.realtor.com/news/trends/top-places-for-lgbtq-folks-to-live/

"St. Petersburg's inclusion on this list may come as a surprise—it's definitely not Miami or Fort Lauderdale. But this vacationer and retiree paradise boasts a high percentage of same-sex couples and gay bars, and received a rare perfect score on the Human Rights Campaign's index.

Last year, Mayor Rick Kriseman declared March 31 Transgender Day of Visibility. The city's gay pride parade, Florida's largest, culminates in fireworks over the waterfront downtown. There's also no shortage of quaint, gay-owned bed-and-breakfasts, including one aptly named GayStPete House, for those who plan to make a weekend out of it.

St. Petersburg is one of the most affordable cities on our list for home buyers. And while there isn't one main gayborhood, there are several go-to areas. The Grand Central District, which hosts that annual parade, is an urban village just west of downtown that's home to art galleries, antiques stores, and an LGBTQ Welcome Center. Housing is a mix of older, one- and two-story homes and newly constructed modern-style homes and condos.

Another gay-friendly neighborhood is Broadwater, a secluded community near beaches and restaurants. It sits on the Boca Ciega Bay Aquatic Preserve. Broadwater's three-bedroom, two-bathroom homes start in the low- to mid-$300,000s."

Can a Hurricane affect my closing?

The answer is YES, and it likely will!

Just imagine this scenario. You and your Realtor found the perfect home.  You are scheduled to close on Friday just in time to unpack a few boxes and start your new job on Monday.  You received quotes from three insurance companies for homeowners insurance, and decided on one.   However, you decided to wait until two days before closing to finalize and bind the policy (and pay for it).  The Sunday before closing, a storm develops and looks like it may approach Florida at some point within the next week.  Your insurance company decides to stop binding policies, which means you won’t be able to get insurance the day you close on your new home.  Since the home will not be insured, your mortgage lender says they will not fund your loan until you obtain insurance.  You are now stuck finding a hotel to stay in so that you can start your new job on Monday.

This is a likely scenario during Hurricane Season in Florida, and many inexperienced real estate agents don’t advise buyers and sellers about this possibility, and how to avoid it.

If you are a buyer or seller who is working with an experienced, knowledgeable Realtor in Florida, you may have heard them mention something called “The Box.” For years, insurance companies have suspended binding coverage once a named storm enters “The Box”, which is a geographic region surrounding the State.  Between June 1^st and November 30th, Florida enters our Hurricane Season.  If a named Tropical Storm or Hurricane entered a zone referred to as “The Box”, homeowners insurance companies would suspend binding coverage.

While there is no longer a “box” to watch out for, it is still surprising to many people that most insurance companies stop binding policies in the event that a named storm is threatening Florida, specifically if a Tropical Storm, Hurricane Watch or Warning has been issued by the National Weather Service for any part of our state.  “It’s always a good idea to talk to the agent you’re working with when storms approach”, says Insurance Broker Zane Lefko with John Galt Insurance Agency, “Once we have a hurricane watch, most insurance companies will begin suspending binding authority on new policies.”

If the buyer of a home is purchasing the home with a mortgage or other financing, the lender most likely will require that the buyer obtain homeowners insurance on the home.   Many buyers wait to “bind” their insurance policies either the day before or the day of closing.   If the insurance company will not bind the policy because of a named storm, the closing most likely will not happen.   Fortunately, most contracts provide a clause for this situation called Force Majeure.

Force Majeure is unforeseeable circumstances that prevent someone from fulfilling a contract.   Since the named storm is an act of nature, and not the fault of either the buyer or the seller, the Force Majeure clause in the contract typically goes into effect.   The FAR/BAR As Is Residential Contract for Sale and Purchase, a contract often used by real estate professionals in Florida, defines Force Majeure as "hurricanes, floods, extreme weather, earthquakes, fire, or other acts of God, unusual transportation delays, or wars, insurrections, or actions of terrorism" and provides that "All time periods, including Closing Date, will be extended a reasonable time up to 7 days after the Force Majeure no longer prevents performance under this Contract, provided, however, if such Force Majeure continues to prevent performance under this Contract more than 30 days beyond Closing Date, then either party may terminate this Contract..." 

This means that during an active hurricane season, it is possible for a buyer to lose their perfect home or for a seller to lose the sale of their home because a buyer didn't bind their insurance soon enough.  Of course, if this worse case scenario didn't happen, simply delaying a closing can cause hardship and issues for some buyers and sellers, even under the best of circumstances.

To prevent these issues, a good Realtor will advise a buyer to lock in their insurance and obtain an insurance binder as soon as possible, and BEFORE the closing date.  Once a closing date is scheduled, buyers should contact their insurance agent and purchase a policy as early as possible during Florida’s Hurricane Season.  Don’t delay! Bind right away!

Zane Lefko is a Licensed Insurance Broker with The Lefko Group at John Galt Insurance Agency and has worked with several of the BP Real Estate Team’s clients.

When a property is listed for sale, the owner of the property is expected to complete a Seller’s Disclosure form. This form is signed by all parties to the transaction, including the buyer of the property.

Although most buyers pay for their own home inspections on the property, they also rely on the disclosure from the seller to discover any known issues or past issues with the property. We are routinely asked “Should I disclose this issue to the buyer?”, or “Can I just cover this up?” This answer is: NO! Disclose, Disclose, Disclose! Under Florida Law, in many cases a buyer can sue for damages, and even rescind a transaction, when known issues with a home are not disclosed.

We recently talked to a homeowner who had issues with a new home that she purchased. After moving into the home, the pipes backed up and flooded the master bedroom. After calling several plumbing companies, the homeowner discovered that just a few months before she closed, one of the plumbing companies had recommended (in writing) that the home’s pipes be hydro-jetted at a cost of over $2,000.00. The seller did not disclose this on the Seller’s Disclosure form, and in fact, they did not indicate that there had been any issues at all with the plumbing. The new owner has now hired an attorney to go after the former owner for the cost of repairs.

Another important point to remember is that although a seller may not have experienced any issues with the property, if a buyer’s home inspection reveals material defects in the property, and they provide the seller with a copy of the inspection but fail to purchase the property, those issues must be disclosed to future buyers. If a future owner discovers that the seller was informed of material defects and failed to disclose them, they may have a claim against the former owner.

The requirement to disclose known defects of a property even applies to properties being sold “as-is”. Selling a property “as-is” simply means that the buyer is agreeing to buy the property in its existing condition, without the seller having to make any repairs to it. This “as-is” clause does not mean that the seller is absolved from disclosing known defects, or the liability that comes with not disclosing defects.

As a rule of thumb, DISCLOSE, DISCLOSE, DISCLOSE!

Every homeowner wants their home to sell as quickly as possible for “top dollar”, but they often overlook simple things that can help them accomplish that goal.   If I had a nickel for every time I was asked “Should I remodel my bathroom?” or “Should I paint this front door?” I would be able to retire quire comfortably in Costa Rica right now.   So, I have compiled a list of ten things you can do to prepare your house for its future owner.

1. Put away the nick-nacks and family photos! I know that wall covered in your daughters baby photos and awards warms your heart, but it’s just going to cause a potential buyer to think “I am going to have to repair all those nail holes!” If you do have photos displayed in areas such as a mantel, side table, etc., consider using photos of your family enjoying your home. If a potential buyer sees a beautiful family picture next to the Christmas tree in that perfect spot in your living room, or a family having fun in the backyard pool, they are more likely to imagine hosting their own family events in the same space. Use your select photo display areas to show the future homeowner how much you love your home.
2. Clean your closets and drawers! You know that guest room closet that is bursting at the seams or “junk drawer” in your kitchen that is full of pens, notepads, receipts, and flashlights? Clean them out as if you are moving tomorrow. While you may not qualify to be featured on an episode of Hoarders, potential buyers still want to see the size of closets and picture their clothes in them. They want to open drawers and see how they close. I know it sounds crazy, but it’s true. If your kitchen drawers or closets explode when a buyer opens them, they will remember THAT instead of the good things about your home.
3. Have your home “deep cleaned”. For a small amount of money, you can hire someone to come in and professionally clean your home (including that oven that has never been cleaned!). If you don’t think a potential buyer can be turned off by your refrigerator, you are mistaken. As an added benefit to a potential buyer, consider allowing your Realtor to “throw in” having your home professionally cleaned before the next buyer moves in. This can be done during negotiations if you have gotten a price that is suitable to you. A good will gesture can go a long way.
4. Fix your mailbox and clean the front door! A dated, rusty, dirty, or dented mail box is unattractive. While it sounds like a minor detail, details affect perception and perception affects price! If your mail box is close to your front door, make sure the entrance is clear, clean, and attractive. A nice, inexpensive coat of paint goes a long way! Your front door and entrance to your home will be the first and last thing a buyer will see when viewing your home.
5. Pressure-wash your driveway. We live in an age where most families have at least two cars in Florida. In the Tampa Bay/St. Pete area, parking is a premium! Your driveway will look larger and more inviting if it has been freshly cleaned. Your home will also look more inviting, and a potential buyer will appreciate how well your home is cared for. It’s one more thing a buyer will not have to worry about when they move in, and that is a selling feature!
6. If you have already moved out of your home, consider having all of the interior walls painted with a neutral color (think builder beige or a clean, soft white).   While many buyers want to add their personal touch to a home, having a freshly painted blank canvass allows a buyer to personalize on their own timeline. Your home will also feel newer, cleaner, and ready to move into.
7. Keep your yard maintained. Nothing screams “I don’t care” more than an overgrown yard. Whether you are living in your home still or you have already moved out and into your new place, it is essential that your yard stay kept. Curb appeal goes a long way when it comes to a buyer falling in love with a home- and in today’s market, one of the keys to a buyer feeling like they are getting a “good deal” is them LOVING your home.
8. Be careful with the smells! If a potential buyer walks into a home and finds a lit candle in every room, or an air freshener in every outlet, they will assume you are covering something up. It is much better to buy a small air purifier and place it in a drafty area…or use the cookie trick! Buy some “break and bake” cookie dough at the store, and bake a couple of cookies before the buyers arrive at your home. Be sure to cover them with plastic wrap on an attractive plate before you leave the house. As long as you don’t burn the cookies, this works quite well. When a potential buyer goes to the next home they will still smell the freshly baked cookies from yours! If you want to go through the effort of making cookies from scratch, just be sure to call me to come over and discuss the showings around desert time.
9. Give your Realtor copies of any operating manuals for your appliances, maintenance and warranty information, notes about paint colors, and recent utility bills. Your Realtor can determine which items to use to “entice” potential buyers and set your home apart from the rest. This will also let potential buyers know that you are serious about selling your home.
10. Consider having a home inspection done. Home inspections can run anywhere from $150-several hundred dollars depending on the inspector and the size and construction of the home. If you can have an inspection done before you put your house up for sale, it is well worth the investment. Many homeowners don’t want to have this done because they “don’t want to know about any issues”, but my opinion is that this is a flawed way of thinking. Most buyers will have an inspection done, which means they will discover any issues with your house. When they discover those issues they will either ask you to repair or replace them by a licensed contractor, or they will want to deduct the cost of those repairs from what they are willing to pay for your house. If the buyer walks away, you now have to disclose those issues to all future buyers. Often, issues are minor and can be fixed inexpensively on your own (think sprinkler heads) which can save you hundreds or thousands of dollars down the road. If there are repairs that exceed your budget (ex. roof issues), you can shop for quotes and be prepared for negotiations. You can then let potential buyers know of the repairs that were made and show them a clean inspection! For buyers who have been shopping for a while, this peace of mind is priceless. Remember, surprises waste everyone’s time and they cost you money in the end!

While this list is not EVERYTHING you can do to get your house ready for sale, these items will definitely help give your home an advantage above its competition.   If you are considering selling your home in the Tampa/St. Pete area, I would be more than happy to come take a look at your home and help you sell it! I can be reached at 352-697-2522 or at Bobby@BobbyPoth.com. If you are not in the Tampa/St. Pete area, I would be happy to refer you to a qualified, licensed real estate professional in your area!

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