In this follow up to their first conversation, Jim welcomes back real estate attorney Reid McCullough for another round of legal insights—from handling foreign investors under FIRPTA to navigating local restrictions and homestead nuances. Get an inside look at how to protect yourself from common contract mistakes and ensure a smooth closing process, whether you’re buying or selling on Florida’s Suncoast.
Key Highlights
- FIRPTA & Foreign Sellers
- What It Is: The Foreign Investment in Real Property Tax Act (FIRPTA) requires buyers to withhold a percentage of the sale proceeds if the seller is not a U.S. resident.
- Buyer Beware: Penalties for non-compliance fall on the buyer. Proper disclosure and documentation are vital—often handled by the closing attorney.
- Local Regulations & Homestead
- Rental Rules: Sarasota County generally enforces a 30-day rental minimum; the City of Sarasota has a 7-day minimum. Violations can risk homestead exemptions and code enforcement complaints.
- Partial Homestead: Renting out any portion of your primary residence may reduce your homestead benefit, as the county adjusts taxable value accordingly.
- New FAR/BAR Contract Updates
- Closing Costs Split: The latest version allows title agents to allocate closing fees to both buyer and seller, reflecting shared benefits and clearer cost breakdowns.
- Financing Tweaks: “Loan approval” and conditions replaced the older “loan commitment” language, streamlining financing contingencies.
- Title & Closing Process
- Timeline: Within hours of receiving a signed contract, your title agent orders searches (title, lien, utility) and begins clearing title issues, often requiring 30 days or more.
- Complex Cases: Expect longer closing windows for short sales or commercial/SBA financing—sometimes up to 90 days or more.
- Negotiating Repairs Post-Inspection
- Contract Timelines: Missing escrow deposits or inspection deadlines can put you in default, costing you your deposit.
- Documentation & Maintenance: Document the property’s condition early and verify repairs/condition changes before closing to avoid unwanted surprises.
- Working with an Attorney
- When to Consult: For FSBO deals, foreign sellers/buyers, or complex negotiations, bringing an attorney on board early can save you costly pitfalls.
- Added Value: Attorneys can connect you with inspectors, negotiate lien payoffs, and clarify legal obligations for all parties before closing.
What’s Next?
Looking to buy or sell property on Florida’s Suncoast without falling into legal traps? Reach out to Jim at jim.ahearn@gmail.com or visit Jim Sells the Suncoast. For deeper legal guidance, contact Reid at (941) 484-9714. Safeguard your real estate deal—know the regulations, meet the deadlines, and close with confidence!
A Personal Note from Jim:
Hey there, I’m Jim Ahearn, your go-to real estate guide and host of Jim Sells The Suncoast podcast! 🎙️✨ Dreaming of Florida life? I’ve got you covered! As your dedicated buyer's agent, I’ll handle everything from walk-throughs to closing, making your home-buying journey as smooth as a Florida breeze.
Whether you're local or tuning in from afar, I’ll bring the Suncoast to you with virtual tours and expert advice. Let’s chat about your dream home and I'll connect you with all the right people to make it happen.
Ready to move to paradise? Drop me a line – I can’t wait to help! 🌴🏡
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Jim (00:01):
Greetings Suncoast.
It is my pleasure to have ReedMcCullough back with me again
for some wild and crazy anticsin the legal aspect of real
estate.
It's all over the board.
We're seeing a fantastic newyear, lots of things going on.
And you and I were talkingrecently about.
Some of the things happening inthis area, particularly global
(00:21):
investors and global buyerscoming in, whether it's from out
of the country, whether they'rebuying or selling.
So I thought we'd kick it off alittle bit there.
And some of the things that maybe unique to that, that you have
to take into account, whetheryou're buying or selling.
Reid (00:33):
Absolutely.
Yeah.
and thank you very much forhaving me back.
the conversation I was lookingforward to today regarding the
foreign investor and realproperty tax act.
That's the FERP tech, which wascreated in 1980 to help the
United States capture capitalgains when somebody sells
(00:54):
property in the United States,but does not Pay income tax in
the United States,
Jim (00:59):
And we see that here in Florida, it's a prime location,
people coming in it's fantasticplace to live, second home or
whatever.
So it has those connotationsthat impact you, whether you're
selling to somebody buying fromout of the area, or if you're
buying from somebody who ownsit, who happens to be out of the
area.
So it can happen both ways.
Reid (01:18):
That's correct.
Yeah.
It's definitely something to bemindful of both for buyers and
sellers.
And the as is FAR BAR contractcontemplates this that says in
standard V of the contract itsays that, the buyer
acknowledges when they sign thiscontract that they're going to
be on the hook for determiningthe status of the seller as a
(01:42):
foreign person and remitting thecorrect amount of the seller
proceeds.
So all of, because the U Scontemplates only, it only has
jurisdiction over Americans.
It puts all of the onus and allof the penalties on buyers.
So it's definitely something forbuyers to watch out for more
(02:04):
than anything else.
Jim (02:07):
So if I'm selling or buying from somebody else, how do I
determine this?
What are the steps that I wouldhave to take to know that this
impacts me?
Reid (02:16):
the number one issue is seller disclosure in part of the
lead up to the closing yourclosing agent collects
information from sellers,including their status as
nationals or foreign nationals.
And we also disclosed that toyou as the buyer's agent and the
(02:36):
buyer when there's an issue thatyou guys need to be aware of
sellers will.
Volunteer this, but not always,oftentimes we'll find ourselves
maybe surprised on a seller'sdisclosure.
Oh, we don't have a socialsecurity number.
Okay.
Why is that?
Oh, because we're not a U.
S.
Oh, great.
Good to know.
(02:58):
Yep.
Jim (02:59):
Bring out the paperwork.
Reid (03:00):
Exactly right.
Yeah.
And these are a couple of taxforms that get created and
signed.
They have the buyer's taxpayerI.
D.
number on their social or the T.
I.
N.
number if they're a company.
And those forms along with thecheck for 15 percent of the
gross proceeds baseline goes tothe I.
R.
S.
(03:20):
out in Ogden, Utah, where theyprocess these our job as closing
agents.
Is to make sure that the formsare all squared away and that
money goes straight from theclosing because penalties that
the irs levies on buyers thatdon't report this are real nasty
(03:40):
they are 15 of the sales pricePlus interest, plus late fees,
plus collection.
They'll get you.
We make it a point of pride thatall of our closings are smooth
and easy, that this doesn'tresult in any disruption to the
sale process.
Jim (03:57):
You know what, I think some of this points back to a lot of
people.
We'll try to go it alone.
That Hey, I can YouTube how todo it.
There's consequences for notgetting everything right.
That I is not dotted.
That T is not crossed.
You're potentially looking athundreds of thousands of dollars
in fines, et cetera.
Reid (04:17):
Yeah.
Forget about it.
Imagine if you signed a quickclaim deed to your neighbor and
he gave you his property for200, 000.
A handshake agreement.
I've seen this before.
if it came to pass that yourneighbor was Canadian or Mexican
or from German, for Christ'ssake.
Then you might find yourselfpaying 15%, that'd be 30, 000
(04:40):
extra in penalties.
Plus, I believe the default rateof interest right now is 15
percent per annum.
And there's no statute oflimitations on this.
The IRS can look backrealistically as long as they
want and say, Oh we're doing anaudit on your sale in 2007.
And we're going to hit you with15 percent on that 30, 000 year
(05:05):
on year compounded annually.
And now you're on the hook formore than the sale.
There's, yeah.
And we don't ask, this issomething your good realtor will
tell you, there's a rule forthis.
Let's talk to the attorney.
Let's talk to the tech becausethey can set that up correctly.
Jim (05:24):
And I think you brought up a good point there.
I think when people think offoreign investors or global and
people are buying, they don'tthink of Canadian people when
you're buying and selling, whichthere's quite a bit.
So it could easily sneak up onyou if you're not going through
the process.
Yes.
Okay.
Reid (05:40):
Yeah, or just, heck, there could be a somebody who lives
here months out of the year, butdoes not necessarily qualify for
one of the exemptions and, thereis a silver lining.
This is a big dark storm cloud,but.
The silver lining is there are anumber of exceptions that will
(06:02):
allow you to get away with, notget away with, but avoid
reporting FERPTA on transactionand those are good targeting
chips, honestly if yourtransaction is for 300, 000 or
less and you intend and youdeclare that you or your family
will reside in your home.
(06:22):
The property for a fraction ofthe time that it's occupied.
you can sign a waiver of theFERPA withholding, which would
the closing agent retains intheir file and that prevents the
requirement of remitting FERPA.
Above 300, 000, if you sign thatwaiver, you get 10 percent
withholding up to a milliondollars, and then above a
(06:43):
million, it's 15 percent nomatter what, but for most retail
residential transactions, atleast in Sarasota County, where
the average price is about halfa million bucks, there is some
savings that you can enjoythere.
And sometimes that's a goodbargaining trick, if the
properties owned by Canadians orby British or French, whatever,
and you present an offer, itmight not be the most attractive
(07:06):
offer that they're going to get,but you say on this contract,
I'm willing to sign an affidavithere and at closing that I will
reside in this property as myprimary residence or as a
vacation rental, whatever, aslong as I meet the occupancy
requirements.
Then they might consider youroffer more attractive.
Jim (07:25):
Oh, absolutely.
Let's cash out a pocket exam.
Reid (07:28):
the
Jim (07:28):
magic number of 330,
Reid (07:30):
Because 330, 000 at 15 percent withholding means the
seller walks away with 280, 500.
so if they got a property listedfor three 30, And you offer them
two 90, they're receiving 10,000 more accepting that offer
with your affidavit.
Then if they receive at theclosing table without the
(07:52):
affidavit at 50, 000 higher.
Jim (07:55):
Yeah.
Yeah.
You, everybody walks out ahead,knowing what's going on.
Yeah, professionals, man, useprofessionals while we're
talking regulations.
Are there any specific localregulations in Sarasota or
Manatee County that could affecta real estate transaction or
anything specific to this area?
Reid (08:17):
Okay.
So when you're talking aboutlike local municipal
regulations, people are thinkingabout Building standards and
rental rates, rentalrestrictions.
So the city of Sarasota, I knowhas a seven day rental minimum.
Last I checked Sarasota countywas 30 days, but they may have
(08:38):
updated that since then.
Yeah, 30 days is the minimumrental period for Sarasota
county Obviously, this is notstrongly enforced if you go on
Airbnb, but it's something to bemindful of because the county is
a reactionary the codeenforcement department, the
zoning department, all theseentities, they don't go out and
(09:00):
hunt the neighborhood forviolations, even though it feels
like that they're really onlyresponding to complaints.
And that's one thing that youwant to really be mindful of,
particularly if you're offeringa room in your home for sale.
I don't know if we touched onthis last week, but the
Homestead Tax Act, part of theFlorida Constitution, says that
(09:21):
for your primary residence, youget a chunk of your property tax
bill discounted.
Every year and your taxes getlocked in year on year to a
maximum of three percent annual.
This is one thing speaking toyour question regarding county
restrictions on ownership thatyou want to be mindful of in a
(09:42):
sale.
If you plan to buy a property asyour primary residence and rent
a room to your You are nottitled to a hundred percent on
that property.
You're only entitled tohomestead as to the fraction
that is not exclusively leasedout to your friend.
The math gets a little weirdbecause a fraction of your
(10:04):
property comes at market value,the rest of it is locked in.
But let's say you have a 3, 000square foot home and you lease
out 200 square feet of bedroom.
To one guy or with an en suitebag, whatever.
So you would get homestead for2800 square feet of your 3000
(10:24):
square foot home.
And then the county would do themath and say, all right, you're
entitled to this, but you haveto pay this.
It wouldn't be the 100 percenthomestead.
The reason I bring that up isbecause Airbnb Is a great source
of homestead violations for thecounty.
That if you list your propertyfor short term rental, that is
not your a hundred percenthomestead.
(10:46):
That is a fractional homestead.
Jim (10:48):
Oh, wow.
Yeah.
Reid (10:49):
And just like the IRS, Sarasota County likes its money.
And so the way they do that isthey remove your homestead cap
going back to the first yearthat they discovered that
property was available as arental or even a partial rental
and then hit you for 15 percentof the difference year on year
(11:10):
seems to be the magic number fortax penalty violations.
The other way they catch that iswith eviction records.
If you take someone to court toevict them from something that
was your homestead property,they have your sworn affidavit
that property was rented becausethat's a verified pleading.
And they say you swore to usthat this was your a hundred
percent homestead and then sworeto the court that it wasn't.
(11:32):
So they're going to thing it.
Jim (11:34):
But yeah, I think most people buying a home don't take
into effect, they're thinking Iown this house.
So it's a hundred percent minethinking size wise or whatever,
maybe not necessarily time wise.
So that time side.
Can have a huge impact, whichmeans if you're an investor,
you're looking for the Airbnb,disclose it and do it the right
(11:55):
way.
So it might be a little moreupfront, but you're probably
better long term.
Reid (12:01):
Yeah.
And in, in the context, goingback to foreign sellers, though,
all of the, Legislation relatedto buying and selling property
as a foreign individual or aforeign corporation.
That's federal legislation thatdoesn't happen.
That's not the, that's not thelocal.
And the best thing to to takeaway from that is to know that
(12:21):
there's a rule and to know toask a professional because, I
don't expect anybody to rememberthe, 16 possible exemptions, but
I expect people to know.
Okay.
All right.
Buying property from a foreignperson comes with weird rules
and regulations.
I should talk to my attorney.
I should talk to my tax account.
Make sure you got someonelooking out for you.
Jim (12:43):
Yep.
Yep.
Yeah.
Go back to the paper and verifyit because no one's going to
remember all of it.
Reid (12:49):
A hundred percent.
Yeah, absolutely.
It's weirdos like me who keepthis stuff upstairs.
And as you can see, it's not allof that.
You know what I mean?
I think every good attorney isshould be measured by how often
they review.
Yeah.
The information that they relyon in their practice, if I let
my, my, my knowledgecrystallize, time keeps marching
(13:09):
on.
There's new regulations thatcome out, last year there was a
new far bar contract thatchanged the way that closing
costs are allocated in closingstate.
And
Jim (13:17):
And that's a nice surprise it is, while we're talking,
let's go right into that.
So I know now we're, as opposedto one saying, Hey, I, I got the
closing, that's my title agentlooking out for me now.
It's split a little bit and somecosts can do both sides.
It is yeah.
Closing
Reid (13:35):
services in December.
The far bar committee inrecognition of the fact that
there is work that applies toboth parties they created this
new regime, which some peoplebought that because, they
didn't, frankly they weregetting the benefit of the
buyer's money or the seller'smoney, depending on the title.
(13:58):
For a long time.
And now the the New Far Barcontract permits closing agents
to allocate closing fees to bothsides of the closing state.
And, with mixed results, I thinksome and every.
Every title agent is different,and this isn't to disparage any
individual or any particularcompany.
I think different title agencieshave a different perception of
(14:21):
value in terms of where.
Where the real where the realwork accrues part of me,
Jim (14:28):
right?
Reid (14:28):
And I guess I looked at this change and I said, okay now
people are expecting to haveclosing costs allocated on both
sides of the closing statementwhat can we do to add value?
And so what I did was I lookedat the work that we're doing
around the state.
This is where, thankfully, we'vegrown out a little bit up and
down the Gulf Coast and into theinterior of Florida.
(14:50):
And I said, okay we have officesin these counties for every
county outside of that.
This closing fee is going tocover the cost of a mobile
notary to attend this closingand sign documents, et cetera,
and so forth.
And for for wire transfers, mybank hits me for a small wire
fee.
I said, for for what we're doingwe can absorb all of that.
(15:10):
So realtors that bring ustransactions and they want the
commissions wired sellers thatwant proceeds going to five
different investment accountsjust absorb that.
It's, because.
In my mind, if we're charging aclosing fee we should be
delivering measurable, valuableservice.
And I wanted to augment thatservice over the, we generate
(15:31):
closing documents, and if youwant to sign up, go figure it
out.
So yeah, that's, that's the waymy shop is respond to that.
I think I can't really speak toother folks.
I think there are different.
I think some shops actuallyparticularly Naples.
If you ever say transactionsdown in Naples their policy for
a long time was to stick closingfees on both sides of the
closing statement or and this, Ithink this was bad service.
(15:55):
There was a lot of there was alot of tradition of forcing the
sellers to get their ownattorneys at the buyer pick
title, for instance which wasinefficient.
It didn't really it didn't honorthe fact that That a title agent
a closing attorney is makingmoney doing what they do and
should reasonably, you knowallocate their fees accordingly
(16:17):
Anyhow, that's off that soapbox.
It got a little arcane But
Jim (16:22):
yeah, I think the idea maybe the idea was that both
sides are benefiting So, how dowe put the cost associated with
it?
So both sides?
Carry their fair weight, maybesomething along those lines
that, that we're doing.
Reid (16:36):
Yeah, exactly.
And that's, I think that'sbroadly good.
I use it as an excuse to addservices and to cut the price.
I discounted my closing fees bya hundred bucks from last year.
And and added, the mobilenotaries within the state and
the wire transfers and all thatgood stuff.
The, I think other, somecompanies just kept doing what
(16:56):
they were doing, that there'sbeen some people that react,
some people raise their fees,but it's definitely set a couple
of ripples through the thenetwork of contract parties.
I think the other big changethat we saw come out with
respect to this contract hasbeen with the There's been a lot
more, they tightened up thefinancing provisions.
(17:20):
Loan commitments are no longer athing.
Their loan approvals now and theapproval they take up the
language with respect to theconditions on the approved.
So I'm really actually, I'mreally happy about that because.
The far bar has been thisevolving living document over
time.
I'm really glad to see that thecommittee is bringing the
(17:43):
contract in line with theproblems we're facing today and,
including, including the fence,the far bar stuff we were
talking about recently, it's orthe purpose of part of me that
we're talking about recently.
Jim (17:54):
I think it's never a bad thing to get a little spotlight
on it.
Take a second, look at it andbring up some of these things
that most people.
Probably don't even payattention.
They signed the bottom andthey're like okay, I signed it.
So now let's talk about, some ofthese specifics so that
everybody is clear as to what'shappening versus, a document and
it's signed and don't worryabout it, they're paying it
(18:15):
well, that's great.
But what does that mean for me?
Reid (18:18):
Exactly.
Yep.
That's, and you're experiencingthe same thing, I'm sure on your
customer side with respect tothe the buyer broker agreements.
I guess those have sunk in alittle bit at this point, I
hope.
Jim (18:28):
Yeah.
I think, once you get past aboutsix months, all of a sudden
that's just standard issue.
And you move on, hopefully, whatdo you think what are you seeing
as the most common mistakesthat.
Buyers are seen as they'relooking for a home on the
Suncoast to make that offer.
What stands out or what is thecommon mistake?
(18:48):
Okay,
Reid (18:49):
So I have a little bit of a weird keyhole view of
transactions because they'realready, they're usually already
executed by the time they cometo me.
But I would say probably one ofthe one of the big mistakes I
see is people who think that,oh, so I don't know if I
mentioned this last week, lasttime we talked, but people who
(19:12):
who think that their verbalagreements will be honored at
closing people who think thatthey're like, but.
The escrow deposit doesn'tnecessarily need to come in when
they say it does.
That's a great big one for mebecause that's actually a
contract default entitling theseller to cancel and keep your
(19:33):
earnest money deposit.
So even if you haven't, soyou've got three days to make a
deposit and on day one, youdecide you don't want the
property.
Even if you even if you decide,if you send a notice on day five
but haven't made your escrowdeposit by day three, you're in
(19:53):
default of your contract.
Right?
And that's a, and people, Idon't use that term lightly
because people take itseriously.
I think that when you saysomebody's in default, they mean
that the seller has the right tosue you and they will win.
So I want to make sure thateverybody, no matter whether
you're concerned aboutinspections no matter whether
(20:14):
you're waiting for your loan tocome through follow your
contract timeline to the letteror to the number, but
Jim (20:20):
Regardless of you think you're going to cancel it at day
six and a seven day window, yougot to pay by day three, you
must pay and then cancel andthen get it back.
You can't.
I was going to get it back.
Anyway,
Reid (20:32):
that's what's going to make your deposits.
100%.
Yeah.
I think another just lookingthrough this and thinking about
it.
When so this is a little bitmore obscure, but if you're if
the listing offers a homewarranty which is this useful
product that kind of ensuresyour big appliances, your HVAC,
(20:54):
that sort of thing for a certainamount of time provides that if
something breaks down duringyour first year or two of
ownership that this homewarranty program will cover it,
which is nice.
Make sure it's honored on thecontract.
This is right under the closingcosts in line 184 of the new far
bar and make sure that you shopfor it because If you have the
(21:18):
entitlement to a home warranty,but you don't pick one out Then
the seller can either say youdidn't exercise that.
So I don't want to pay you.
Or they might just choose thebottom of the basement one,
because it says that it coststhe default languages at a cost
not to exceed blank.
So that might be 120 warrantyinstead of the 800 that you
(21:38):
bargained for.
And it's important to make surethat, that if you're entitled to
a home warranty first, okay.
That your contract says so andto the shop for one.
There's lots of providers Ithink old republic has home
warranties american home shieldthe popular one There's a bunch
i'm not a representative of anyof those entities
Jim (22:00):
But you know what and we did talk about this last time I
think it's still very true foranyone listening is read the
contract make sure it's in thereif you want the washer and dryer
Get it.
The contract needs to say washerand dryer is going with it,
otherwise that, that seller hasevery right to, we talked about
it, but it wasn't in thecontract.
So I'm taking it.
Reid (22:18):
Oh, there are, I can't tell you how many fights I've
tried.
I've had to defuse regardingstuff.
Not property.
Real estate's easy.
If it's bolted down to theproperty, it's part of the
property.
But the sale of tangible goodsthat is adjacent to a real
estate transaction very fewpeople get it right.
(22:40):
There, there is
Jim (22:42):
things we're seeing too.
Ring cameras, TV mounts on thewall, those kinds of things that
that buyer has every expectationthat's going to be included.
So
Reid (22:54):
TV mounts actually are part of the standard contract.
That's line 19.
So if that's not, if that's notthere when the seller moves that
seller has something to answerfor.
I remember a horror story sixyears ago in my practice, where
a seller pulled up a low boy along low trailer and got a
forklift and stole a shed.
(23:16):
They're like it wasn't bolteddown and I'm like,
Jim (23:19):
no, that's part of the problem.
Yeah.
If there's any question, makesure it's in writing.
If you're the buyer, make sureit's in there.
If you're the seller, whateverthey have in there, you must
convey.
Reid (23:31):
Absolutely.
Absolutely.
I, there's a good way to nailthis down is to create
inventories.
To just take a college ruletablet and a walk and walk
through the house, make a video,take a video, see everything you
want to see and then write itdown and have everybody sign
(23:53):
that.
Because that is what you willget at closing.
Yeah, it can get very hairy ifyou don't itemize Exactly what
you want.
Jim (24:04):
How do you as a real estate lawyer?
The buyers navigate thecomplexities of purchase
property.
Obviously you said some of themthey come to you afterwards
Somebody wants to enlist yourhelp as they go to buy property
What are the things that you cando for them and how can you help
them?
Reid (24:20):
Sure.
Right up front.
I'm not a realtor.
I don't hold a real estatelicense or a brokerage license.
I know some of my competitorsdo.
I don't really like competingwith the people who refer me
work.
But the what I do first is Iwalk them through their
contract, make sure they knowwhat they've signed up for first
And I make sure that they'rethat they have services lined up
(24:43):
for if they want to, if they'regetting an appraisal, if they're
getting an inspection if theyneed, termites, pool, septic,
sewer, a lot of what I do is I'mthe compulsive connector of
people, so I can send them outto these various people to get
quotes if they want to dorepairs or bring a contractor in
if they need to fix somethingup.
(25:03):
But most of what I'm doing isI'm.
For whoever brings me thecontract.
I am their representative intheir advocate, and it's my job,
not just to hold their handthrough the anxiety, provoking
interactions, the tensenegotiations, the conflict
sometimes, but also to, to makesure that they feel comfortable
(25:25):
with the whole process.
So there's a fair amount ofboiling down this high minded
arcane nonsense into simpleterms that people can
understand.
Jim (25:36):
Yep.
And I think it's importantpeople understand too, if you
have a question on what does thecontract really mean, or what
does this section say?
Speak to a lawyer because I'mnot a lawyer.
I can't practice law for me tointerpret that for you may or
may not be right.
And it's wrong on my part to tryto pass that off.
Reid (25:56):
Yeah.
Yeah.
That's, and that's exactly whatI, no, I don't necessarily,
admonish my realtor clients, butI always tell them like, all you
need to know is, yeah, there's arule for that.
Let me call the guy who knows.
Jim (26:07):
That's right.
Who's got the rule book.
He does.
Let me, yeah, it's nailed itthere.
So when should they consult withyou buyer or seller?
Is it or where are you seeingthe most benefit?
Is it.
Hey, I need a lawyer up frontdepending on the complexity and
maybe if it's an investor orsomething that's got a couple
extra steps to it.
Reid (26:27):
That's a great question.
And it depends on where you'restarting from.
If you've got, if you've got arealtor or if you're if you're
connected with one of anexisting real estate
relationship that's the firstplace to start a hundred
percent.
You're realtor.
Is most talented in the creationof the deal.
(26:47):
The negotiation.
You guys are not justprofessional salespeople.
You're professional negotiators.
And that's super good for havingsomeone to look out for your
interests.
Without any, and I'm notretained by the Florida Realtors
Board, but I can recommend thatbecause oftentimes I get tapped
after a deal is already signedand all I can do is interpret
(27:11):
and honor the contract to thebest of my ability and hopefully
in a light favor to my favorableto my client.
If you don't have a realtor, ifyou're being, let's say you've
got to deal with your neighborand, everybody's, you've already
agreed on a price.
That's, once you've got a verbalagreement or a verbal kind of
understanding of the terms,that's a great time to talk to
(27:33):
me.
If you're not, if you're notplanning on, and using the
services of a realtor, becausebecause, as an attorney in
involved in a for sale by ownerdeal I can help you not only
craft the contract, but I cancome up with some terms for
closing and payment and escrowfinance that make sense.
Because, usually theseagreements tend to be a bit
(27:57):
inarticulate.
They tend to be, oh, yeah, Jimtold me he sold me his place for
300, 000 and he carriedfinancing for two years.
How much is he going to financethe whole thing, or does he
actually need 100, 000 to payoff his e lock?
That's that's a big questionbecause there's risk with that
too, if you if you accept sellerfinancing, but the seller didn't
(28:17):
tell you that he's stillcarrying this mortgage payment.
The bank might call yourmortgage and suddenly you're
involved in a foreclosureproceeding for your brand new
house
Jim (28:26):
I think something else you bring to the table too is the
being able to lay out potentialoutlook comes from certain
things.
Hey, listen, you guys want to dothis?
Here's how you have to do it ifyou do it this way instead yeah,
this is a potential happeningand sometimes They're not good.
Reid (28:42):
I don't want to be Debbie Downer.
I think there's a I think one ofmy maxims is never say no, but
price yourself accordingly.
But I do come from litigation.
I, when I started my careerafter a brief stint in
commercial underwriting for agiant title insurance agent I
did two years of nasty stuff,foreclosure defense and PI and
(29:03):
divorce and civil lit.
And it was it was eyeopening, itgave me a real good.
Ballpark of not only what'sworth going forwards on, but
also what the timeline, the costand the expected outcome of
litigation, that's somethingthat, people don't, the sort of
subtext on all of thesecontracts that we negotiate and
(29:25):
we interact in through realestate is that the only way
these contracts are enforced.
Is in court.
And if you're if your party isnot willing to enforce their
contractual rights in court andbasically bluffing, so you gotta
(29:46):
make sure that people understandthat you're serious and that
their actual that there areremedies.
But you have to pursueotherwise, which is is a circle
circuitous way of saying thatthe best result of any conflict
is a negotiated peace.
Jim (30:00):
And here's the pathway forward that hopefully we go
through and it's smooth andthat's the ideal outcome.
Reid (30:05):
Yeah, absolutely.
And sometimes you gotta get alittle rough to get there.
But.
There's only a few things that Ialways recommend suing.
And it's usually high dollarescrow disputes.
When there's clear performanceissues.
(30:26):
The seller didn't show up andsign closing documents.
Now we have a specificperformance case.
Jim (30:30):
So let's go back a little bit.
You were talking in there aboutwhat you do as.
An attorney and title, what isthe timeline for that?
And what's entailed in that stepby step process going through
Hey, we've got a contract that'sboom, it hits your desk.
All right.
Closings in 30 days.
Reid (30:48):
Oh, yeah.
The first thing that, that justfrom our perspective, so you
want to open the door to thesausage factory the first thing
we do when we get a contract iswe triage it.
How are we, how fast are weclosing, what needs to be done?
Who are we interacting?
The within an hour of receivinga contract during the workday,
of course, we do sleep sometimesduring, within an hour of
(31:10):
receiving a contract we've got,A title search running a lean
search.
We've got welcome emails toeverybody.
We've got Wire instructions foryou to wire your deposit in if
you're a partner and we've gotinformation sheets which are
clickable pdfs That tell us howto enter your personal
(31:31):
information.
So we get your closing backwithin a couple days usually
we'll have a title search backdepending on the the speed of my
underwriter and from there we doan examination.
We make sure that any mortgagesare being satisfied.
Any means are being addressed.
If usually our lean searcherwill get us documents back
(31:52):
around the same time.
So we'll know if there arepermits that need to be
addressed with seller codeenforcement violations.
Open utility bills come about aweek later, but by the a week
down the road, we'll know whatwater bill is.
We need to collect for that.
If there's any deficiency andfrom there, we start, we
basically start the clearanceprocess.
If we're representing a seller.
(32:12):
Oftentimes what we're able to dois negotiate down some liens we
just, we'll step in and retainpersonally for the purpose of
going to old debtors that have asecure judgment against you and
say, Hey, this doubt fire wasable to scrounge up a couple
thousand dollars to pay off herlien.
Are you willing to discount thissubstantially?
(32:34):
Usually they are.
Usually creditors don't reallyexpect to get paid if they've
got secure judgments that havebeen sitting there for years.
They just have some
Jim (32:43):
is better than none.
And so let's move on
Reid (32:46):
exactly.
And we've had great success withthat, especially in the case
where there are multiplecompeting lien holders for the
same property.
We can just make them fight andyou say, all so the first party
that's getting paid off is thefederal government, because they
have a tax lien and after thatthe first mortgage holder,
because they can foreclose payoff the tax lien, and they still
(33:07):
get their equity, but then theequity runs out.
Mr.
Foreclosing HOA, Mr.
Credit card judgment, Mr.
Home equity line of credit, youguys really won't get paid if
this goes to foreclosure.
Let's figure it out.
And using those mechanisms,we've managed to negotiate like
six figure discounts in thepast.
(33:28):
For for clients who are having,huge problems with with the
property that would otherwisefall apart, get foreclosed on,
go to bankruptcy, et cetera.
Jim (33:37):
So it's in their interest.
Let's get this deal done so thateverything, everybody moves
forward and they still getsomething for theirs.
Reid (33:43):
When you have a property at the waterline where, when I,
when that's a term of art, thatmeans the sale price, what you
expect to receive at a sale isjust about what the debts are
equal to.
It's the world because you gotyour nose is just above the
water.
We try to get people to at leastwalk away with the dignity
Jim (34:02):
and about how we're talking about timeline.
So how long does this take?
Still going back like within thehour.
And then, so my service,
Reid (34:10):
so that's that's the difference between what my team
can do and what we require otherpeople to do, because I can't
the utilities only come from themunicipality they come from the
city or the county and They're alittle more laid back than we
are.
I've got some high energy andslightly neurotic people on my
(34:31):
team, which I really appreciate.
That's they're a little more.
Take it easy.
Clock out at five, on weekendsdown.
So they, we expect the stopletters from communities to come
back between four and 10business days.
We enjoy some pretty goodrelationships with with
association managers.
So we can usually poke them andboost them to get them back a
(34:53):
little faster, but the statutoryrequirement is 10 business days.
I'm dealing with that right nowwith the gentleman who
represents an association whoowes us an estoppel letter by
Wednesday, but the mostmunicipalities would get you
utility bills back in 10 days.
This is what allows us to.
(35:15):
pay any outstanding water bills,
Jim (35:17):
right?
Reid (35:18):
Because the city can chase you down for that property.
Jim (35:22):
Yep.
And because I know when I talkedto buyers or sellers, one of the
things that you know, all right,we're gonna close.
We're looking 30 days out or 40days out.
They're like 40 days.
Why?
You know what?
You have to find out what'sthere, what's missing and what's
not missing.
Reach out and get the response,get it back.
If there's an issue, then settlethe issue.
It takes, it just takes a littletime.
Reid (35:44):
There are matters that demand a longer time
particularly short sales.
Negotiating with short salelenders I, it's a tongue in
cheek, but I tell people assumetwo and a half months per
lender.
If you have two lendersinvolved, then they have to
agree.
Imagine a closing in the falland you're signing a contract in
March.
(36:04):
If the other thing that takes along time that I recommend you
price into your expectations iscommercial financing.
Most commercial lenders,particularly small business
administration lenders so SBAloans I expect 90 day contract
cycles.
They usually have 45 days fordue diligence, 45 days for
(36:24):
closing.
And those are complicated loanprograms.
So I understand.
But yeah, what you don't want iswhen you get to the end of the
process and your lender says onemore day.
So the seller says, okay, onemore day.
And then tomorrow the lendersays one more day.
That's when everybody getspissed.
Yeah shorts, yeah, short salesand SBA loans are the big time
(36:46):
takers.
Jim (36:48):
So looking at, and this area, we have a lot of both
single family homes and condos.
Sure.
Is there a big difference inwhat as a title or as an
attorney in dealing with thesebuying and selling processes?
Reid (37:01):
So single family homes are not necessarily in an
association.
Condos are all in association.
So when you are if you're abuyer then if you're building,
if you're not buying your wholebuilding, assume that you will
be applying to an associationand the requirements of
application are prettystringent.
(37:22):
They can demand all sorts ofthings, criminal background
checks, credit checks, proof ofdeposits, proof of funds.
They can make sure that you haveenough money in your bank
accounts to not be a credit riskto the association and that
you're not a felon.
So very reasonable.
From an orbital view, butboiling down to it, it feels a
little visceral when you'regiving your social security
(37:44):
number and your bank statementsto, to an association, it
doesn't feel good.
But you have to price that intoyour experience as a prospective
homebuyer is that.
When you're buying condo, thecondo wants to know that you're
not going to set fire to thebuilding and that you're not
going to, that you're not goingto default on your dues in a
(38:05):
homeowner associations aresimilar in that they have
permissible applicationprocesses, your mileage may
vary.
There's not every condominium isonerous, not every homeowner
association.
Yeah.
And sometimes you might be in aproperty that doesn't have a
formal association but has deeprestrictions.
Southgate is a prime example ofthis.
(38:26):
That's the neighborhood north ofBee Ridge and south of Bay of
Vista.
They so Southgate.
Doesn't have a dues collectingorganization, but it has
covenants.
You, when you join, when you buya property there, you're
promising that you won't docertain things with your
property.
You won't build your property ina certain way.
And the enforcement mechanismfor that is the any of your
(38:49):
neighbors in the community tosue you.
And that's not great.
Obviously you don't want to bethe neighbor enforcing that, but
you have to take intoconsideration the fact that
right exists.
When I'm advising buyers, I wantto make sure that the first
thing they do after they signtheir contract and don't deposit
their escrow and fill out theirlittle buyer information sheet.
(39:09):
Is that they are applying totheir homeowner association and
getting everything they need in,just like applying to your
lender for your loan, want tomake sure that process is done
well in advance of your closing.
Jim (39:21):
Last question I have today, let's talk about potential
pitfalls in negotiating repairsafter home inspection.
What are some of the things thatcan go with that?
Reid (39:33):
After your inspection period closes your right to ask
for repairs is dramaticallyreduced if you have an
inspection And if you don't havean inspection, get an
inspection.
If you have, if you're notgetting an inspection, when you
buy a property, you are probablyleaving money on the table and
(39:54):
you're possibly causing yourselfhuge problems in the future.
If you have an inspection andfrom the inspection date to your
final walkthrough, something hashappened.
A window has been busted out.
A hot water heater fails, an ACunit fails.
If something goes wrong duringthat time, then you have the
(40:16):
right to demand that they fix itBecause you've got that initial
inspection, you have put yourmarker in and you've said that
between the contract creationprocess and the closing, you
have failed in yourresponsibility to maintain the
property in substantially thesimilar condition.
It was.
(40:36):
We went under contract that thatprovision is the maintenance
provision.
I believe that is standard.
Standard M is risk of loss.
I would believe that paragraph11 property maintenance.
Okay.
Except for ordinary wear andtear and casualty loss, sellers
shall maintain the property,including the shrubbery in the
(40:57):
substantially similar conditionas it was as of the effective So
when you go to when you go, whenyou initially see the property,
when you go under contract, takepictures of everything, do a
video walkthrough, they'regreat, or your realtor will
probably do it for you.
And, when you, when, if yourvideo walkthrough shows, Hey,
there definitely wasn't a holein that window when we went
under contract and then at thewalkthrough, cause your
(41:20):
inspector will generally takepictures of problems.
They don't necessarily take careof things that are in good
shape.
Jim (41:26):
Or they don't know what was there when you saw it, so when
you're coming through, you aremaking an offer to buy what
exactly.
It needs to be that way when youclose.
Reid (41:36):
You don't want to walk up to your property and think, huh,
I distinctly remember a shedthere.
Jim (41:42):
Yeah.
Or, three palm trees out front.
Reid (41:44):
Oh God.
Yeah, absolutely.
If they cut down the, if theycut down the trees they got to
put those trees back or putreplace a substantially similar
trees.
So this can be an expensivedifference for a seller too,
because If your seller is doingstorm cleanup, you want to make
sure that's priced in there andsay, Hey, we're going to demo
(42:05):
this tree.
It's dangerous.
We don't want it falling on thehouse.
Okay, great.
Make sure everyone's everyonesees it.
Everyone signs it.
Jim (42:12):
Yep.
Yep.
When in doubt, write it out.
Reid (42:16):
Perfect.
Honestly, you could make thatthe tagline of the show.
Jim (42:20):
Yeah, read.
Thank you for joining me again.
I look forward to our nextinstallment of I always walk
away with a little tidbit ofsomething that I go, you know
what?
I wasn't aware of that.
I'm really particularly lovingthe a hundred percent exemption
how that can be by rental or nothaving some of those things in
place.
So that's.
That's not necessarily top ofmind, but it is now.
Reid (42:42):
Yeah, absolutely.
If you're if you're buyers orsellers are thinking about
moving in and also putting it inAirbnb, make sure that they
understand that's carved out forthe exemption.
All right, guys.
Thank you very much having me.
I can't wait to do this again.
It's always a pleasure talkingto you, Jim.
Let me know if you guys have anyquestions related to this
(43:02):
material or related to anythingyou're, you've got going on your
contracts, even if it's notcoming through my office, you
just want a second opinion, feelfree to reach out.
You can always give me a call.
My number is 9 4 1 4 8 4 9 7 14.
Jim (43:17):
we'll make sure we put those in show notes Bye guys.
Greetings Suncoast.
It is my pleasure to have ReedMcCullough back with me again
for some wild and crazy anticsin the legal aspect of real
estate.
It's all over the board.
We're seeing a fantastic newyear, lots of things going on.
And you and I were talkingrecently about.
Some of the things happening inthis area, particularly global
(00:21):
investors and global buyerscoming in, whether it's from out
of the country, whether they'rebuying or selling.
So I thought we'd kick it off alittle bit there.
And some of the things that maybe unique to that, that you have
to take into account, whetheryou're buying or selling.
Reid (00:33):
Absolutely.
Yeah.
and thank you very much forhaving me back.
the conversation I was lookingforward to today regarding the
foreign investor and realproperty tax act.
That's the FERP tech, which wascreated in 1980 to help the
United States capture capitalgains when somebody sells
(00:54):
property in the United States,but does not Pay income tax in
the United States,
Jim (00:59):
And we see that here in Florida, it's a prime location,
people coming in it's fantasticplace to live, second home or
whatever.
So it has those connotationsthat impact you, whether you're
selling to somebody buying fromout of the area, or if you're
buying from somebody who ownsit, who happens to be out of the
area.
So it can happen both ways.
Reid (01:18):
That's correct.
Yeah.
It's definitely something to bemindful of both for buyers and
sellers.
And the as is FAR BAR contractcontemplates this that says in
standard V of the contract itsays that, the buyer
acknowledges when they sign thiscontract that they're going to
be on the hook for determiningthe status of the seller as a
(01:42):
foreign person and remitting thecorrect amount of the seller
proceeds.
So all of, because the U Scontemplates only, it only has
jurisdiction over Americans.
It puts all of the onus and allof the penalties on buyers.
So it's definitely something forbuyers to watch out for more
(02:04):
than anything else.
Jim (02:07):
So if I'm selling or buying from somebody else, how do I
determine this?
What are the steps that I wouldhave to take to know that this
impacts me?
Reid (02:16):
the number one issue is seller disclosure in part of the
lead up to the closing yourclosing agent collects
information from sellers,including their status as
nationals or foreign nationals.
And we also disclosed that toyou as the buyer's agent and the
(02:36):
buyer when there's an issue thatyou guys need to be aware of
sellers will.
Volunteer this, but not always,oftentimes we'll find ourselves
maybe surprised on a seller'sdisclosure.
Oh, we don't have a socialsecurity number.
Okay.
Why is that?
Oh, because we're not a U.
S.
Oh, great.
Good to know.
(02:58):
Yep.
Jim (02:59):
Bring out the paperwork.
Reid (03:00):
Exactly right.
Yeah.
And these are a couple of taxforms that get created and
signed.
They have the buyer's taxpayerI.
D.
number on their social or the T.
I.
N.
number if they're a company.
And those forms along with thecheck for 15 percent of the
gross proceeds baseline goes tothe I.
R.
S.
(03:20):
out in Ogden, Utah, where theyprocess these our job as closing
agents.
Is to make sure that the formsare all squared away and that
money goes straight from theclosing because penalties that
the irs levies on buyers thatdon't report this are real nasty
(03:40):
they are 15 of the sales pricePlus interest, plus late fees,
plus collection.
They'll get you.
We make it a point of pride thatall of our closings are smooth
and easy, that this doesn'tresult in any disruption to the
sale process.
Jim (03:57):
You know what, I think some of this points back to a lot of
people.
We'll try to go it alone.
That Hey, I can YouTube how todo it.
There's consequences for notgetting everything right.
That I is not dotted.
That T is not crossed.
You're potentially looking athundreds of thousands of dollars
in fines, et cetera.
Reid (04:17):
Yeah.
Forget about it.
Imagine if you signed a quickclaim deed to your neighbor and
he gave you his property for200, 000.
A handshake agreement.
I've seen this before.
if it came to pass that yourneighbor was Canadian or Mexican
or from German, for Christ'ssake.
Then you might find yourselfpaying 15%, that'd be 30, 000
(04:40):
extra in penalties.
Plus, I believe the default rateof interest right now is 15
percent per annum.
And there's no statute oflimitations on this.
The IRS can look backrealistically as long as they
want and say, Oh we're doing anaudit on your sale in 2007.
And we're going to hit you with15 percent on that 30, 000 year
(05:05):
on year compounded annually.
And now you're on the hook formore than the sale.
There's, yeah.
And we don't ask, this issomething your good realtor will
tell you, there's a rule forthis.
Let's talk to the attorney.
Let's talk to the tech becausethey can set that up correctly.
Jim (05:24):
And I think you brought up a good point there.
I think when people think offoreign investors or global and
people are buying, they don'tthink of Canadian people when
you're buying and selling, whichthere's quite a bit.
So it could easily sneak up onyou if you're not going through
the process.
Yes.
Okay.
Reid (05:40):
Yeah, or just, heck, there could be a somebody who lives
here months out of the year, butdoes not necessarily qualify for
one of the exemptions and, thereis a silver lining.
This is a big dark storm cloud,but.
The silver lining is there are anumber of exceptions that will
(06:02):
allow you to get away with, notget away with, but avoid
reporting FERPTA on transactionand those are good targeting
chips, honestly if yourtransaction is for 300, 000 or
less and you intend and youdeclare that you or your family
will reside in your home.
(06:22):
The property for a fraction ofthe time that it's occupied.
you can sign a waiver of theFERPA withholding, which would
the closing agent retains intheir file and that prevents the
requirement of remitting FERPA.
Above 300, 000, if you sign thatwaiver, you get 10 percent
withholding up to a milliondollars, and then above a
(06:43):
million, it's 15 percent nomatter what, but for most retail
residential transactions, atleast in Sarasota County, where
the average price is about halfa million bucks, there is some
savings that you can enjoythere.
And sometimes that's a goodbargaining trick, if the
properties owned by Canadians orby British or French, whatever,
and you present an offer, itmight not be the most attractive
(07:06):
offer that they're going to get,but you say on this contract,
I'm willing to sign an affidavithere and at closing that I will
reside in this property as myprimary residence or as a
vacation rental, whatever, aslong as I meet the occupancy
requirements.
Then they might consider youroffer more attractive.
Jim (07:25):
Oh, absolutely.
Let's cash out a pocket exam.
Reid (07:28):
the
Jim (07:28):
magic number of 330,
Reid (07:30):
Because 330, 000 at 15 percent withholding means the
seller walks away with 280, 500.
so if they got a property listedfor three 30, And you offer them
two 90, they're receiving 10,000 more accepting that offer
with your affidavit.
Then if they receive at theclosing table without the
(07:52):
affidavit at 50, 000 higher.
Jim (07:55):
Yeah.
Yeah.
You, everybody walks out ahead,knowing what's going on.
Yeah, professionals, man, useprofessionals while we're
talking regulations.
Are there any specific localregulations in Sarasota or
Manatee County that could affecta real estate transaction or
anything specific to this area?
Reid (08:17):
Okay.
So when you're talking aboutlike local municipal
regulations, people are thinkingabout Building standards and
rental rates, rentalrestrictions.
So the city of Sarasota, I knowhas a seven day rental minimum.
Last I checked Sarasota countywas 30 days, but they may have
(08:38):
updated that since then.
Yeah, 30 days is the minimumrental period for Sarasota
county Obviously, this is notstrongly enforced if you go on
Airbnb, but it's something to bemindful of because the county is
a reactionary the codeenforcement department, the
zoning department, all theseentities, they don't go out and
(09:00):
hunt the neighborhood forviolations, even though it feels
like that they're really onlyresponding to complaints.
And that's one thing that youwant to really be mindful of,
particularly if you're offeringa room in your home for sale.
I don't know if we touched onthis last week, but the
Homestead Tax Act, part of theFlorida Constitution, says that
(09:21):
for your primary residence, youget a chunk of your property tax
bill discounted.
Every year and your taxes getlocked in year on year to a
maximum of three percent annual.
This is one thing speaking toyour question regarding county
restrictions on ownership thatyou want to be mindful of in a
(09:42):
sale.
If you plan to buy a property asyour primary residence and rent
a room to your You are nottitled to a hundred percent on
that property.
You're only entitled tohomestead as to the fraction
that is not exclusively leasedout to your friend.
The math gets a little weirdbecause a fraction of your
(10:04):
property comes at market value,the rest of it is locked in.
But let's say you have a 3, 000square foot home and you lease
out 200 square feet of bedroom.
To one guy or with an en suitebag, whatever.
So you would get homestead for2800 square feet of your 3000
(10:24):
square foot home.
And then the county would do themath and say, all right, you're
entitled to this, but you haveto pay this.
It wouldn't be the 100 percenthomestead.
The reason I bring that up isbecause Airbnb Is a great source
of homestead violations for thecounty.
That if you list your propertyfor short term rental, that is
not your a hundred percenthomestead.
(10:46):
That is a fractional homestead.
Jim (10:48):
Oh, wow.
Yeah.
Reid (10:49):
And just like the IRS, Sarasota County likes its money.
And so the way they do that isthey remove your homestead cap
going back to the first yearthat they discovered that
property was available as arental or even a partial rental
and then hit you for 15 percentof the difference year on year
(11:10):
seems to be the magic number fortax penalty violations.
The other way they catch that iswith eviction records.
If you take someone to court toevict them from something that
was your homestead property,they have your sworn affidavit
that property was rented becausethat's a verified pleading.
And they say you swore to usthat this was your a hundred
percent homestead and then sworeto the court that it wasn't.
(11:32):
So they're going to thing it.
Jim (11:34):
But yeah, I think most people buying a home don't take
into effect, they're thinking Iown this house.
So it's a hundred percent minethinking size wise or whatever,
maybe not necessarily time wise.
So that time side.
Can have a huge impact, whichmeans if you're an investor,
you're looking for the Airbnb,disclose it and do it the right
(11:55):
way.
So it might be a little moreupfront, but you're probably
better long term.
Reid (12:01):
Yeah.
And in, in the context, goingback to foreign sellers, though,
all of the, Legislation relatedto buying and selling property
as a foreign individual or aforeign corporation.
That's federal legislation thatdoesn't happen.
That's not the, that's not thelocal.
And the best thing to to takeaway from that is to know that
(12:21):
there's a rule and to know toask a professional because, I
don't expect anybody to rememberthe, 16 possible exemptions, but
I expect people to know.
Okay.
All right.
Buying property from a foreignperson comes with weird rules
and regulations.
I should talk to my attorney.
I should talk to my tax account.
Make sure you got someonelooking out for you.
Jim (12:43):
Yep.
Yep.
Yeah.
Go back to the paper and verifyit because no one's going to
remember all of it.
Reid (12:49):
A hundred percent.
Yeah, absolutely.
It's weirdos like me who keepthis stuff upstairs.
And as you can see, it's not allof that.
You know what I mean?
I think every good attorney isshould be measured by how often
they review.
Yeah.
The information that they relyon in their practice, if I let
my, my, my knowledgecrystallize, time keeps marching
(13:09):
on.
There's new regulations thatcome out, last year there was a
new far bar contract thatchanged the way that closing
costs are allocated in closingstate.
And
Jim (13:17):
And that's a nice surprise it is, while we're talking,
let's go right into that.
So I know now we're, as opposedto one saying, Hey, I, I got the
closing, that's my title agentlooking out for me now.
It's split a little bit and somecosts can do both sides.
It is yeah.
Closing
Reid (13:35):
services in December.
The far bar committee inrecognition of the fact that
there is work that applies toboth parties they created this
new regime, which some peoplebought that because, they
didn't, frankly they weregetting the benefit of the
buyer's money or the seller'smoney, depending on the title.
(13:58):
For a long time.
And now the the New Far Barcontract permits closing agents
to allocate closing fees to bothsides of the closing state.
And, with mixed results, I thinksome and every.
Every title agent is different,and this isn't to disparage any
individual or any particularcompany.
I think different title agencieshave a different perception of
(14:21):
value in terms of where.
Where the real where the realwork accrues part of me,
Jim (14:28):
right?
Reid (14:28):
And I guess I looked at this change and I said, okay now
people are expecting to haveclosing costs allocated on both
sides of the closing statementwhat can we do to add value?
And so what I did was I lookedat the work that we're doing
around the state.
This is where, thankfully, we'vegrown out a little bit up and
down the Gulf Coast and into theinterior of Florida.
(14:50):
And I said, okay we have officesin these counties for every
county outside of that.
This closing fee is going tocover the cost of a mobile
notary to attend this closingand sign documents, et cetera,
and so forth.
And for for wire transfers, mybank hits me for a small wire
fee.
I said, for for what we're doingwe can absorb all of that.
(15:10):
So realtors that bring ustransactions and they want the
commissions wired sellers thatwant proceeds going to five
different investment accountsjust absorb that.
It's, because.
In my mind, if we're charging aclosing fee we should be
delivering measurable, valuableservice.
And I wanted to augment thatservice over the, we generate
(15:31):
closing documents, and if youwant to sign up, go figure it
out.
So yeah, that's, that's the waymy shop is respond to that.
I think I can't really speak toother folks.
I think there are different.
I think some shops actuallyparticularly Naples.
If you ever say transactionsdown in Naples their policy for
a long time was to stick closingfees on both sides of the
closing statement or and this, Ithink this was bad service.
(15:55):
There was a lot of there was alot of tradition of forcing the
sellers to get their ownattorneys at the buyer pick
title, for instance which wasinefficient.
It didn't really it didn't honorthe fact that That a title agent
a closing attorney is makingmoney doing what they do and
should reasonably, you knowallocate their fees accordingly
(16:17):
Anyhow, that's off that soapbox.
It got a little arcane But
Jim (16:22):
yeah, I think the idea maybe the idea was that both
sides are benefiting So, how dowe put the cost associated with
it?
So both sides?
Carry their fair weight, maybesomething along those lines
that, that we're doing.
Reid (16:36):
Yeah, exactly.
And that's, I think that'sbroadly good.
I use it as an excuse to addservices and to cut the price.
I discounted my closing fees bya hundred bucks from last year.
And and added, the mobilenotaries within the state and
the wire transfers and all thatgood stuff.
The, I think other, somecompanies just kept doing what
(16:56):
they were doing, that there'sbeen some people that react,
some people raise their fees,but it's definitely set a couple
of ripples through the thenetwork of contract parties.
I think the other big changethat we saw come out with
respect to this contract hasbeen with the There's been a lot
more, they tightened up thefinancing provisions.
(17:20):
Loan commitments are no longer athing.
Their loan approvals now and theapproval they take up the
language with respect to theconditions on the approved.
So I'm really actually, I'mreally happy about that because.
The far bar has been thisevolving living document over
time.
I'm really glad to see that thecommittee is bringing the
(17:43):
contract in line with theproblems we're facing today and,
including, including the fence,the far bar stuff we were
talking about recently, it's orthe purpose of part of me that
we're talking about recently.
Jim (17:54):
I think it's never a bad thing to get a little spotlight
on it.
Take a second, look at it andbring up some of these things
that most people.
Probably don't even payattention.
They signed the bottom andthey're like okay, I signed it.
So now let's talk about, some ofthese specifics so that
everybody is clear as to what'shappening versus, a document and
it's signed and don't worryabout it, they're paying it
(18:15):
well, that's great.
But what does that mean for me?
Reid (18:18):
Exactly.
Yep.
That's, and you're experiencingthe same thing, I'm sure on your
customer side with respect tothe the buyer broker agreements.
I guess those have sunk in alittle bit at this point, I
hope.
Jim (18:28):
Yeah.
I think, once you get past aboutsix months, all of a sudden
that's just standard issue.
And you move on, hopefully, whatdo you think what are you seeing
as the most common mistakesthat.
Buyers are seen as they'relooking for a home on the
Suncoast to make that offer.
What stands out or what is thecommon mistake?
(18:48):
Okay,
Reid (18:49):
So I have a little bit of a weird keyhole view of
transactions because they'realready, they're usually already
executed by the time they cometo me.
But I would say probably one ofthe one of the big mistakes I
see is people who think that,oh, so I don't know if I
mentioned this last week, lasttime we talked, but people who
(19:12):
who think that their verbalagreements will be honored at
closing people who think thatthey're like, but.
The escrow deposit doesn'tnecessarily need to come in when
they say it does.
That's a great big one for mebecause that's actually a
contract default entitling theseller to cancel and keep your
(19:33):
earnest money deposit.
So even if you haven't, soyou've got three days to make a
deposit and on day one, youdecide you don't want the
property.
Even if you even if you decide,if you send a notice on day five
but haven't made your escrowdeposit by day three, you're in
(19:53):
default of your contract.
Right?
And that's a, and people, Idon't use that term lightly
because people take itseriously.
I think that when you saysomebody's in default, they mean
that the seller has the right tosue you and they will win.
So I want to make sure thateverybody, no matter whether
you're concerned aboutinspections no matter whether
(20:14):
you're waiting for your loan tocome through follow your
contract timeline to the letteror to the number, but
Jim (20:20):
Regardless of you think you're going to cancel it at day
six and a seven day window, yougot to pay by day three, you
must pay and then cancel andthen get it back.
You can't.
I was going to get it back.
Anyway,
Reid (20:32):
that's what's going to make your deposits.
100%.
Yeah.
I think another just lookingthrough this and thinking about
it.
When so this is a little bitmore obscure, but if you're if
the listing offers a homewarranty which is this useful
product that kind of ensuresyour big appliances, your HVAC,
(20:54):
that sort of thing for a certainamount of time provides that if
something breaks down duringyour first year or two of
ownership that this homewarranty program will cover it,
which is nice.
Make sure it's honored on thecontract.
This is right under the closingcosts in line 184 of the new far
bar and make sure that you shopfor it because If you have the
(21:18):
entitlement to a home warranty,but you don't pick one out Then
the seller can either say youdidn't exercise that.
So I don't want to pay you.
Or they might just choose thebottom of the basement one,
because it says that it coststhe default languages at a cost
not to exceed blank.
So that might be 120 warrantyinstead of the 800 that you
(21:38):
bargained for.
And it's important to make surethat, that if you're entitled to
a home warranty first, okay.
That your contract says so andto the shop for one.
There's lots of providers Ithink old republic has home
warranties american home shieldthe popular one There's a bunch
i'm not a representative of anyof those entities
Jim (22:00):
But you know what and we did talk about this last time I
think it's still very true foranyone listening is read the
contract make sure it's in thereif you want the washer and dryer
Get it.
The contract needs to say washerand dryer is going with it,
otherwise that, that seller hasevery right to, we talked about
it, but it wasn't in thecontract.
So I'm taking it.
Reid (22:18):
Oh, there are, I can't tell you how many fights I've
tried.
I've had to defuse regardingstuff.
Not property.
Real estate's easy.
If it's bolted down to theproperty, it's part of the
property.
But the sale of tangible goodsthat is adjacent to a real
estate transaction very fewpeople get it right.
(22:40):
There, there is
Jim (22:42):
things we're seeing too.
Ring cameras, TV mounts on thewall, those kinds of things that
that buyer has every expectationthat's going to be included.
So
Reid (22:54):
TV mounts actually are part of the standard contract.
That's line 19.
So if that's not, if that's notthere when the seller moves that
seller has something to answerfor.
I remember a horror story sixyears ago in my practice, where
a seller pulled up a low boy along low trailer and got a
forklift and stole a shed.
(23:16):
They're like it wasn't bolteddown and I'm like,
Jim (23:19):
no, that's part of the problem.
Yeah.
If there's any question, makesure it's in writing.
If you're the buyer, make sureit's in there.
If you're the seller, whateverthey have in there, you must
convey.
Reid (23:31):
Absolutely.
Absolutely.
I, there's a good way to nailthis down is to create
inventories.
To just take a college ruletablet and a walk and walk
through the house, make a video,take a video, see everything you
want to see and then write itdown and have everybody sign
(23:53):
that.
Because that is what you willget at closing.
Yeah, it can get very hairy ifyou don't itemize Exactly what
you want.
Jim (24:04):
How do you as a real estate lawyer?
The buyers navigate thecomplexities of purchase
property.
Obviously you said some of themthey come to you afterwards
Somebody wants to enlist yourhelp as they go to buy property
What are the things that you cando for them and how can you help
them?
Reid (24:20):
Sure.
Right up front.
I'm not a realtor.
I don't hold a real estatelicense or a brokerage license.
I know some of my competitorsdo.
I don't really like competingwith the people who refer me
work.
But the what I do first is Iwalk them through their
contract, make sure they knowwhat they've signed up for first
And I make sure that they'rethat they have services lined up
(24:43):
for if they want to, if they'regetting an appraisal, if they're
getting an inspection if theyneed, termites, pool, septic,
sewer, a lot of what I do is I'mthe compulsive connector of
people, so I can send them outto these various people to get
quotes if they want to dorepairs or bring a contractor in
if they need to fix somethingup.
(25:03):
But most of what I'm doing isI'm.
For whoever brings me thecontract.
I am their representative intheir advocate, and it's my job,
not just to hold their handthrough the anxiety, provoking
interactions, the tensenegotiations, the conflict
sometimes, but also to, to makesure that they feel comfortable
(25:25):
with the whole process.
So there's a fair amount ofboiling down this high minded
arcane nonsense into simpleterms that people can
understand.
Jim (25:36):
Yep.
And I think it's importantpeople understand too, if you
have a question on what does thecontract really mean, or what
does this section say?
Speak to a lawyer because I'mnot a lawyer.
I can't practice law for me tointerpret that for you may or
may not be right.
And it's wrong on my part to tryto pass that off.
Reid (25:56):
Yeah.
Yeah.
That's, and that's exactly whatI, no, I don't necessarily,
admonish my realtor clients, butI always tell them like, all you
need to know is, yeah, there's arule for that.
Let me call the guy who knows.
Jim (26:07):
That's right.
Who's got the rule book.
He does.
Let me, yeah, it's nailed itthere.
So when should they consult withyou buyer or seller?
Is it or where are you seeingthe most benefit?
Is it.
Hey, I need a lawyer up frontdepending on the complexity and
maybe if it's an investor orsomething that's got a couple
extra steps to it.
Reid (26:27):
That's a great question.
And it depends on where you'restarting from.
If you've got, if you've got arealtor or if you're if you're
connected with one of anexisting real estate
relationship that's the firstplace to start a hundred
percent.
You're realtor.
Is most talented in the creationof the deal.
(26:47):
The negotiation.
You guys are not justprofessional salespeople.
You're professional negotiators.
And that's super good for havingsomeone to look out for your
interests.
Without any, and I'm notretained by the Florida Realtors
Board, but I can recommend thatbecause oftentimes I get tapped
after a deal is already signedand all I can do is interpret
(27:11):
and honor the contract to thebest of my ability and hopefully
in a light favor to my favorableto my client.
If you don't have a realtor, ifyou're being, let's say you've
got to deal with your neighborand, everybody's, you've already
agreed on a price.
That's, once you've got a verbalagreement or a verbal kind of
understanding of the terms,that's a great time to talk to
(27:33):
me.
If you're not, if you're notplanning on, and using the
services of a realtor, becausebecause, as an attorney in
involved in a for sale by ownerdeal I can help you not only
craft the contract, but I cancome up with some terms for
closing and payment and escrowfinance that make sense.
Because, usually theseagreements tend to be a bit
(27:57):
inarticulate.
They tend to be, oh, yeah, Jimtold me he sold me his place for
300, 000 and he carriedfinancing for two years.
How much is he going to financethe whole thing, or does he
actually need 100, 000 to payoff his e lock?
That's that's a big questionbecause there's risk with that
too, if you if you accept sellerfinancing, but the seller didn't
(28:17):
tell you that he's stillcarrying this mortgage payment.
The bank might call yourmortgage and suddenly you're
involved in a foreclosureproceeding for your brand new
house
Jim (28:26):
I think something else you bring to the table too is the
being able to lay out potentialoutlook comes from certain
things.
Hey, listen, you guys want to dothis?
Here's how you have to do it ifyou do it this way instead yeah,
this is a potential happeningand sometimes They're not good.
Reid (28:42):
I don't want to be Debbie Downer.
I think there's a I think one ofmy maxims is never say no, but
price yourself accordingly.
But I do come from litigation.
I, when I started my careerafter a brief stint in
commercial underwriting for agiant title insurance agent I
did two years of nasty stuff,foreclosure defense and PI and
(29:03):
divorce and civil lit.
And it was it was eyeopening, itgave me a real good.
Ballpark of not only what'sworth going forwards on, but
also what the timeline, the costand the expected outcome of
litigation, that's somethingthat, people don't, the sort of
subtext on all of thesecontracts that we negotiate and
(29:25):
we interact in through realestate is that the only way
these contracts are enforced.
Is in court.
And if you're if your party isnot willing to enforce their
contractual rights in court andbasically bluffing, so you gotta
(29:46):
make sure that people understandthat you're serious and that
their actual that there areremedies.
But you have to pursueotherwise, which is is a circle
circuitous way of saying thatthe best result of any conflict
is a negotiated peace.
Jim (30:00):
And here's the pathway forward that hopefully we go
through and it's smooth andthat's the ideal outcome.
Reid (30:05):
Yeah, absolutely.
And sometimes you gotta get alittle rough to get there.
But.
There's only a few things that Ialways recommend suing.
And it's usually high dollarescrow disputes.
When there's clear performanceissues.
(30:26):
The seller didn't show up andsign closing documents.
Now we have a specificperformance case.
Jim (30:30):
So let's go back a little bit.
You were talking in there aboutwhat you do as.
An attorney and title, what isthe timeline for that?
And what's entailed in that stepby step process going through
Hey, we've got a contract that'sboom, it hits your desk.
All right.
Closings in 30 days.
Reid (30:48):
Oh, yeah.
The first thing that, that justfrom our perspective, so you
want to open the door to thesausage factory the first thing
we do when we get a contract iswe triage it.
How are we, how fast are weclosing, what needs to be done?
Who are we interacting?
The within an hour of receivinga contract during the workday,
of course, we do sleep sometimesduring, within an hour of
(31:10):
receiving a contract we've got,A title search running a lean
search.
We've got welcome emails toeverybody.
We've got Wire instructions foryou to wire your deposit in if
you're a partner and we've gotinformation sheets which are
clickable pdfs That tell us howto enter your personal
(31:31):
information.
So we get your closing backwithin a couple days usually
we'll have a title search backdepending on the the speed of my
underwriter and from there we doan examination.
We make sure that any mortgagesare being satisfied.
Any means are being addressed.
If usually our lean searcherwill get us documents back
(31:52):
around the same time.
So we'll know if there arepermits that need to be
addressed with seller codeenforcement violations.
Open utility bills come about aweek later, but by the a week
down the road, we'll know whatwater bill is.
We need to collect for that.
If there's any deficiency andfrom there, we start, we
basically start the clearanceprocess.
If we're representing a seller.
(32:12):
Oftentimes what we're able to dois negotiate down some liens we
just, we'll step in and retainpersonally for the purpose of
going to old debtors that have asecure judgment against you and
say, Hey, this doubt fire wasable to scrounge up a couple
thousand dollars to pay off herlien.
Are you willing to discount thissubstantially?
(32:34):
Usually they are.
Usually creditors don't reallyexpect to get paid if they've
got secure judgments that havebeen sitting there for years.
They just have some
Jim (32:43):
is better than none.
And so let's move on
Reid (32:46):
exactly.
And we've had great success withthat, especially in the case
where there are multiplecompeting lien holders for the
same property.
We can just make them fight andyou say, all so the first party
that's getting paid off is thefederal government, because they
have a tax lien and after thatthe first mortgage holder,
because they can foreclose payoff the tax lien, and they still
(33:07):
get their equity, but then theequity runs out.
Mr.
Foreclosing HOA, Mr.
Credit card judgment, Mr.
Home equity line of credit, youguys really won't get paid if
this goes to foreclosure.
Let's figure it out.
And using those mechanisms,we've managed to negotiate like
six figure discounts in thepast.
(33:28):
For for clients who are having,huge problems with with the
property that would otherwisefall apart, get foreclosed on,
go to bankruptcy, et cetera.
Jim (33:37):
So it's in their interest.
Let's get this deal done so thateverything, everybody moves
forward and they still getsomething for theirs.
Reid (33:43):
When you have a property at the waterline where, when I,
when that's a term of art, thatmeans the sale price, what you
expect to receive at a sale isjust about what the debts are
equal to.
It's the world because you gotyour nose is just above the
water.
We try to get people to at leastwalk away with the dignity
Jim (34:02):
and about how we're talking about timeline.
So how long does this take?
Still going back like within thehour.
And then, so my service,
Reid (34:10):
so that's that's the difference between what my team
can do and what we require otherpeople to do, because I can't
the utilities only come from themunicipality they come from the
city or the county and They're alittle more laid back than we
are.
I've got some high energy andslightly neurotic people on my
(34:31):
team, which I really appreciate.
That's they're a little more.
Take it easy.
Clock out at five, on weekendsdown.
So they, we expect the stopletters from communities to come
back between four and 10business days.
We enjoy some pretty goodrelationships with with
association managers.
So we can usually poke them andboost them to get them back a
(34:53):
little faster, but the statutoryrequirement is 10 business days.
I'm dealing with that right nowwith the gentleman who
represents an association whoowes us an estoppel letter by
Wednesday, but the mostmunicipalities would get you
utility bills back in 10 days.
This is what allows us to.
(35:15):
pay any outstanding water bills,
Jim (35:17):
right?
Reid (35:18):
Because the city can chase you down for that property.
Jim (35:22):
Yep.
And because I know when I talkedto buyers or sellers, one of the
things that you know, all right,we're gonna close.
We're looking 30 days out or 40days out.
They're like 40 days.
Why?
You know what?
You have to find out what'sthere, what's missing and what's
not missing.
Reach out and get the response,get it back.
If there's an issue, then settlethe issue.
It takes, it just takes a littletime.
Reid (35:44):
There are matters that demand a longer time
particularly short sales.
Negotiating with short salelenders I, it's a tongue in
cheek, but I tell people assumetwo and a half months per
lender.
If you have two lendersinvolved, then they have to
agree.
Imagine a closing in the falland you're signing a contract in
March.
(36:04):
If the other thing that takes along time that I recommend you
price into your expectations iscommercial financing.
Most commercial lenders,particularly small business
administration lenders so SBAloans I expect 90 day contract
cycles.
They usually have 45 days fordue diligence, 45 days for
(36:24):
closing.
And those are complicated loanprograms.
So I understand.
But yeah, what you don't want iswhen you get to the end of the
process and your lender says onemore day.
So the seller says, okay, onemore day.
And then tomorrow the lendersays one more day.
That's when everybody getspissed.
Yeah shorts, yeah, short salesand SBA loans are the big time
(36:46):
takers.
Jim (36:48):
So looking at, and this area, we have a lot of both
single family homes and condos.
Sure.
Is there a big difference inwhat as a title or as an
attorney in dealing with thesebuying and selling processes?
Reid (37:01):
So single family homes are not necessarily in an
association.
Condos are all in association.
So when you are if you're abuyer then if you're building,
if you're not buying your wholebuilding, assume that you will
be applying to an associationand the requirements of
application are prettystringent.
(37:22):
They can demand all sorts ofthings, criminal background
checks, credit checks, proof ofdeposits, proof of funds.
They can make sure that you haveenough money in your bank
accounts to not be a credit riskto the association and that
you're not a felon.
So very reasonable.
From an orbital view, butboiling down to it, it feels a
little visceral when you'regiving your social security
(37:44):
number and your bank statementsto, to an association, it
doesn't feel good.
But you have to price that intoyour experience as a prospective
homebuyer is that.
When you're buying condo, thecondo wants to know that you're
not going to set fire to thebuilding and that you're not
going to, that you're not goingto default on your dues in a
(38:05):
homeowner associations aresimilar in that they have
permissible applicationprocesses, your mileage may
vary.
There's not every condominium isonerous, not every homeowner
association.
Yeah.
And sometimes you might be in aproperty that doesn't have a
formal association but has deeprestrictions.
Southgate is a prime example ofthis.
(38:26):
That's the neighborhood north ofBee Ridge and south of Bay of
Vista.
They so Southgate.
Doesn't have a dues collectingorganization, but it has
covenants.
You, when you join, when you buya property there, you're
promising that you won't docertain things with your
property.
You won't build your property ina certain way.
And the enforcement mechanismfor that is the any of your
(38:49):
neighbors in the community tosue you.
And that's not great.
Obviously you don't want to bethe neighbor enforcing that, but
you have to take intoconsideration the fact that
right exists.
When I'm advising buyers, I wantto make sure that the first
thing they do after they signtheir contract and don't deposit
their escrow and fill out theirlittle buyer information sheet.
(39:09):
Is that they are applying totheir homeowner association and
getting everything they need in,just like applying to your
lender for your loan, want tomake sure that process is done
well in advance of your closing.
Jim (39:21):
Last question I have today, let's talk about potential
pitfalls in negotiating repairsafter home inspection.
What are some of the things thatcan go with that?
Reid (39:33):
After your inspection period closes your right to ask
for repairs is dramaticallyreduced if you have an
inspection And if you don't havean inspection, get an
inspection.
If you have, if you're notgetting an inspection, when you
buy a property, you are probablyleaving money on the table and
(39:54):
you're possibly causing yourselfhuge problems in the future.
If you have an inspection andfrom the inspection date to your
final walkthrough, something hashappened.
A window has been busted out.
A hot water heater fails, an ACunit fails.
If something goes wrong duringthat time, then you have the
(40:16):
right to demand that they fix itBecause you've got that initial
inspection, you have put yourmarker in and you've said that
between the contract creationprocess and the closing, you
have failed in yourresponsibility to maintain the
property in substantially thesimilar condition.
It was.
(40:36):
We went under contract that thatprovision is the maintenance
provision.
I believe that is standard.
Standard M is risk of loss.
I would believe that paragraph11 property maintenance.
Okay.
Except for ordinary wear andtear and casualty loss, sellers
shall maintain the property,including the shrubbery in the
(40:57):
substantially similar conditionas it was as of the effective So
when you go to when you go, whenyou initially see the property,
when you go under contract, takepictures of everything, do a
video walkthrough, they'regreat, or your realtor will
probably do it for you.
And, when you, when, if yourvideo walkthrough shows, Hey,
there definitely wasn't a holein that window when we went
under contract and then at thewalkthrough, cause your
(41:20):
inspector will generally takepictures of problems.
They don't necessarily take careof things that are in good
shape.
Jim (41:26):
Or they don't know what was there when you saw it, so when
you're coming through, you aremaking an offer to buy what
exactly.
It needs to be that way when youclose.
Reid (41:36):
You don't want to walk up to your property and think, huh,
I distinctly remember a shedthere.
Jim (41:42):
Yeah.
Or, three palm trees out front.
Reid (41:44):
Oh God.
Yeah, absolutely.
If they cut down the, if theycut down the trees they got to
put those trees back or putreplace a substantially similar
trees.
So this can be an expensivedifference for a seller too,
because If your seller is doingstorm cleanup, you want to make
sure that's priced in there andsay, Hey, we're going to demo
(42:05):
this tree.
It's dangerous.
We don't want it falling on thehouse.
Okay, great.
Make sure everyone's everyonesees it.
Everyone signs it.
Jim (42:12):
Yep.
Yep.
When in doubt, write it out.
Reid (42:16):
Perfect.
Honestly, you could make thatthe tagline of the show.
Jim (42:20):
Yeah, read.
Thank you for joining me again.
I look forward to our nextinstallment of I always walk
away with a little tidbit ofsomething that I go, you know
what?
I wasn't aware of that.
I'm really particularly lovingthe a hundred percent exemption
how that can be by rental or nothaving some of those things in
place.
So that's.
That's not necessarily top ofmind, but it is now.
Reid (42:42):
Yeah, absolutely.
If you're if you're buyers orsellers are thinking about
moving in and also putting it inAirbnb, make sure that they
understand that's carved out forthe exemption.
All right, guys.
Thank you very much having me.
I can't wait to do this again.
It's always a pleasure talkingto you, Jim.
Let me know if you guys have anyquestions related to this
(43:02):
material or related to anythingyou're, you've got going on your
contracts, even if it's notcoming through my office, you
just want a second opinion, feelfree to reach out.
You can always give me a call.
My number is 9 4 1 4 8 4 9 7 14.
Jim (43:17):
we'll make sure we put those in show notes Bye guys.
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