January 13, 2025 • 37 mins
In this episode of Jim Sells the Suncoast, Jim welcomes Crystal Golm—a seasoned Florida real estate and business attorney with 20 years of experience. From the nuances of quitclaim vs. warranty deeds to the importance of getting a survey, Crystal provides legal insights that can protect your investment and keep your transactions running smoothly.
Key Highlights
- Types of Deeds
- Quitclaim vs. Warranty: Quitclaim deeds merely transfer whatever ownership interest the grantor has (if any), whereas warranty deeds guarantee the full transfer of property—offering stronger protection for buyers.
- Specialty Deeds: Personal Representative’s deeds (for estates) and Trustee’s deeds (for trusts) allow authorized individuals to convey property on behalf of an estate or trust.
- Homestead Exemption & Portability
- Multiple Benefits: Beyond reducing property taxes (with a 3% annual tax cap), Florida’s homestead laws also protect your primary residence from most creditor claims and preserve property for spouses/minor children.
- Qualifying & Portability: You can only homestead one property in the world, and you must intend it as your primary residence. Selling and then buying another Florida property may let you “port” some of your existing homestead savings.
- Co-Ownership & Partition
- Joint Tenancy vs. Tenants in Common: Understand who “inherits” if one owner passes away, or how to handle disagreements between co-owners.
- Partition Lawsuits: When co-owners can’t agree on selling or splitting proceeds, a costly partition action may force a sale of the property.
- Surveys & Title Work
- Why Surveys Matter: A simple boundary error or encroachment can spiral into expensive legal disputes; always verify lot lines and structures before closing.
- Title Agents vs. Real Estate Attorneys: While both can issue title insurance, an attorney-led closing offers additional legal guidance—often at no extra cost.
- Contingencies & Disclosures
- Contract Contingencies: Financing, inspections, HOA docs, and even certain “hidden” contingencies all protect buyers and sellers—if dates and extensions are managed correctly.
- Seller’s Duty to Disclose: Florida law requires full disclosure of known defects that aren’t readily observable, or sellers risk liability for future damage (e.g., past pest infestations, structural issues, etc.).
What’s Next?
If you want to dive deeper into Florida real estate law—or have pressing questions about homestead, contingencies, or title work—reach out to Jim at jim.ahearn@gmail.com or visit Jim Sells the Suncoast for more expert insights. Whether you’re buying, selling, or investing, the right legal guidance can make all the difference on the Suncoast!
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! 🌴🏡
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Jim (00:00):
Welcome to Jim Sells the Suncoast.
(00:01):
Today I have the honor andpleasure of having Crystal Gome,
who is a lawyer, real estatelawyer in the area.
So welcome.
Crystal (00:09):
Hi, Jim.
Thank you for having me today.
I'm a real estate and businessattorney.
My office is based in Bradenton,but I work all over the state of
Florida, focus on the Southwestcoast, Sarasota, Manatee County,
Pinellas.
The focus of my practice is realestate and we do all types of
(00:31):
real estate transactions,commercial and residential.
We do Loan documents.
We do things pertaining tocondominium and homeowners
associations, et cetera.
And then I also handle quite abit of business law as well.
I've been a real estate attorneyfor 20 years.
(00:52):
Right here in Bradenton, andI've had my own firm for 17 of
those years.
I have a great staff.
collectively, we have 130 yearsof experience, a pretty deep
bench, which is great.
Jim (01:07):
So if something happens, you've already seen it at least
once.
Crystal (01:09):
Not surprised very often.
Jim (01:11):
So in the 20 years that you've been in this area, so
much has changed, so much isgrowing on with the growth in
the area.
I wanted to, pick your brain onthe real estate law side of what
goes on.
I think most people go out, Oh,I want to paint the color, but
let's talk about all the thingsthat go into it.
Maybe starting with the types ofdeeds.
I know there's several types andwhen should they be used?
(01:34):
Warranty, quick claim startingat the very beginning, okay.
Crystal (01:38):
The simplest type of deed and the deed that conveys
the least amount of rights andproperty is a quitclaim deed.
And a lot of people think that aquitclaim deed basically deeds
over or conveys the property toanother individual, but all it
(01:58):
really does is conveys theportion of property that the
conveyor owns.
There's no guarantee that persona owns the entire thing, but
what person a is conveying isall that they do own.
It's basically without awarranty so that person B could
(02:19):
not go back to person A and say,Hey, you were supposed to sell
me five acres or deed over to mefive acres, but you only deeded
over to me That's probablybecause person A only owned the
two to give
Jim (02:34):
Yeah.
Okay.
Would it be right to say thatthey're really just giving up
their particular interests?
In that property, notnecessarily guarantee all of the
interest in that property.
Crystal (02:44):
And then we have warranty deeds, which are the
most common in traditional realestate transactions.
And in those deeds, even withouttitle insurance, the seller or
the grantor, as the case may be,person A, we'll call him is
guaranteeing.
the complete transfer of theproperty to person B such that
(03:09):
person B could come back toperson a under that warranty
basically and sue them.
And so that's say if it'sineffective or incomplete that
would be one remedy under awarranty deed.
And then there are differenttypes of deeds, a personal
representative's deed, thathappens in probate where the
(03:32):
personal representative orexecutor, so to speak, can
convey the property on behalf ofthe estate, which makes sense
because the PR sort of stands asthe boss or the CEO of the
estate.
And then we have the trusteedeeds, which are the same type
of thing.
The trustee is acting in itscapacity as the trustee, as the
(03:54):
boss of the trust.
So can convey that way.
So then it's a quick.
Claim deed.
When is that used?
Is that for like specificscenarios?
No nothing.
Jim (04:06):
Okay,
Crystal (04:06):
Appropriate or non appropriate it, as a blanket
statement, but definitely awarranty deed is best.
People often find them onlineand give them, a college try
thinking that they do more thanthey actually do.
Jim (04:20):
That they're implying things that aren't necessarily
there.
Crystal (04:23):
Yep.
So we use quick claim deeds.
say it's a husband and wife whohave divorced and they've come
up with an agreement where oneis going to, come off of the
property title.
Basically, that's a perfectexample of a quick claim deed
because they already own it.
A simple quick claim deed wherethe husband conveys his portion
(04:45):
to the wife as agreed isperfectly fine.
Because they're already coowners, so claim deeds work well
that way.
Jim (04:54):
Okay.
Crystal (04:55):
Yeah.
Jim (04:55):
So as a potential buyer seller, don't just assume
because a quick claim deed isbeing proffered, that's going to
solve all your issues.
You need to pay attention andFollow up on it,
Crystal (05:05):
right?
That's really bottom, bottom ofthe barrel and not what you want
for your hard earned money.
Jim (05:13):
Yeah, I can get pricey
Crystal (05:14):
exactly.
Jim (05:15):
Can you explain how the homestead exemption works and
how it benefits homeowners?
Crystal (05:20):
Sure.
So homestead in Florida hasseveral different parts.
Most people think of it only asa homestead exemption.
So I'll start out with themisconstrued portions.
Number one.
A lot of people think that it'sjust a homestead exemption which
(05:42):
is just a, basically a taxreduction.
there are other parts guaranteedby the Florida Constitution,
which I'll get into in a moment.
When it comes to the homesteadexemption, a lot of people
mistakenly think, and I'msurprised at the number of
realtors who also think this,that so long as A person resides
(06:03):
in their home for six months andone day that they qualify for
the Homestead Exemption, or ifthey have a Florida driver's
license, or if they have theircar registered in Florida.
None of those things granteligibility for Homestead
Exemption, none of themindividually, and none of them
(06:23):
together.
What the Florida Constitutionsays, and as Most constitutions
are.
It's intentionally vague saysthat you can number one, only
have one homestead in the world,
Jim (06:35):
right?
Crystal (06:36):
Number two, the homestead is defined.
Primary place of residence, andif you are absent from that
place for a period of time, youintend to return to it.
Let's say you go and visit yourmother up north for four months,
as long as you're coming back.
(06:56):
Same is true.
If you decide to go on a worldtour, a year long world cruise,
you will not lose your homesteadexemption as long as you only
have one and you intend toreturn.
And importantly, you do not useit for commercial purpose.
So the other parts of Homestead,which I can go a little quicker
on, but very interesting.
(07:18):
number one is the protection forthe family.
So Homestead property cannot beconveyed away from the family
without the other spousesagreement written signature.
Let's say a husband and wife owna house, and for whatever
reason, they each have a will,one wants to give the property
(07:42):
to Save the Whales Foundationthat will not work.
The homestead is preserved forthe family, that is for the
spouse and minor children.
And then a lot of people don'trealize this, but creditor
protection is another homesteadprotection.
And that's part of the reasonwhy all the crooks moved to
(08:04):
Florida, because just thinkBernie Madoff and OJ Simpson,
whether you believe he did it ornot, that's part of the reason
these folks move here is becausetheir homestead, even if it's a
50 million mansion, is 100percent protected from claims of
creditors.
(08:24):
So if you have a 10 millionjudgment and someone wants to
collect against your home andthat's your homestead, they
cannot do it.
Whether it's a car accident, acredit card, so super important.
You asked a little bit aboutportability and I have to be
honest with you.
I have a cheat sheet on thatbecause it is complicated and it
(08:46):
seems like even after 20 years,probably because I only have to
answer the question once a yearor so.
But I will tell you the clerk'soffices, at least in our area
here on the West Coast, havevery good websites, very
detailed, very thorough.
They've got checklists, they'vegot forms and they're really
friendly when you call or godown there.
(09:08):
And that's not just in myexperience as a lawyer, but also
as a member of the public, veryhelpful to call and say, listen,
I sold this house.
I'm buying this house.
Do I get portability?
They will answer your questionover the phone.
Very simple.
Jim (09:24):
And I would concur about the website.
Pretty close to what you have inthere that if you needed to use
it, it's available.
Crystal (09:31):
Exactly.
It's Very user friendly.
So not to dodge the questionabout portability, but basically
if you sell a house and it'syour homestead and you buy
another one in Florida and it'sgoing to be your homestead, you
can port over your homesteadeither in whole or in part, It's
your right as a Floridaresident.
Jim (09:52):
Absolutely.
And there's so many potentialbenefits from doing homestead.
There's no reason not to do it.
And unfortunately, I don't thinkwe talk about it enough when
we're selling a house, whenwe're buying a house
Crystal (10:05):
And the deadline is in March.
I really hammer this hard on myFacebook page at the beginning
of the year.
I say, check your smokedetectors and check the property
appraiser site and make sure youhave your homestead exemption.
I have a friend who followed myadvice last year and did that
and indeed had purchased theirhomestead seven years ago.
(10:27):
And they still had no homesteadexemption.
Jim (10:30):
Yeah, it slips right through the cracks.
Crystal (10:33):
goes to the bottom of the stack and you don't get to
it.
Jim (10:36):
And again, you can do everything online now.
We did ours, was able to go inthere, send him a thing in the
mail.
Actually, I emailed it.
Done.
Crystal (10:45):
Very simple.
Free.
Of course.
The other thing I forgot to tellyou about Homestead, and this is
really important.
Homestead also caps yourproperty taxes.
So when you have a Homesteadexemption, which is a tax
reduction, you're also given a 3percent cap so that your
property taxes cannot increasemore than 3 percent in any given
(11:09):
year, no matter what the marketdoes.
So that's called the save ourhomes cap.
Jim (11:16):
Oh, sure.
Crystal (11:16):
And it was running people out of the state because
people couldn't afford it.
They were still the same familywho could afford a hundred
thousand dollar house 30 yearsago.
Jim (11:26):
And it's particularly evident now when we look at the
run up in this area from 2019,where homes are 80 percent more,
you might've gone up 15 percentin total taxable taxes versus 80
percent more.
Crystal (11:40):
Yeah really important.
I don't know how you handletalking about property taxes
with buyers, I think a lot ofpeople are surprised when they
get Their first tax bill andit's significantly higher than
what was prorated at closing.
Jim (11:56):
right.
Crystal (11:58):
Buyers should always take the purchase price.
And go into the tax collector'swebsite and find the last tax
bill, take the millage rate andmultiply that out against the
purchase price that will get youpretty close.
(12:18):
It should be more like thepurchase price times about 80
percent and then that numbertimes the millage rate that will
get you pretty close.
So that you're not shocked whenthe tax bill comes, particularly
if you're buying from somebodywho's lived there a long time.
Jim (12:35):
You're on the opposite side of that Save Our Home 3 percent
cap, where it's escalated andall of a sudden you're now
paying on this new value.
Crystal (12:42):
That's right.
the taxes are artificially lowwhen somebody has owned a home
that long.
Jim (12:46):
I do know the Hillsborough County site has it on it where
you can put in a price and it'lltell you within a small range
the approximate taxes on thisnew purchase price.
Crystal (12:54):
yes, I heard that which is great.
Jim (12:59):
Let's talk a little bit maybe about some co ownership
pitfalls.
What are some common legalissues that arise with co
ownership, such as joint tenancyversus tenancy in common?
Crystal (13:09):
So there are three types of ownership in Florida.
One is, the easiest, is tenantsby the entireties.
that's married couples thenthere are tenants in common,
which are non married couples orpeople who own the property.
It can be by percentages, but tothe extent the deed does not
(13:31):
have a percentage, then it ispresumed that both people own
the whole home.
So they both own the whole pie.
The pie is not split in half.
Because the house can't be splitin half.
most non married people ownhomes as joint tenants in
common.
And then the third way is jointtenants with right of
(13:52):
survivorship, With the right ofsurvivorship so that the last
man standing, so to speak, ownsthe home without claims from the
other's heirs or creditors oranything like that.
The issue that arises, ofcourse, is some people don't get
along as co owners, whether theywere Boyfriend and girlfriend or
(14:15):
family members or businesspartners or whatever, for
whatever reason they no longerget along.
And so usually one wants to sellthe house and the other wants to
keep it.
There's usually a disagreementabout who's put in more money,
who's put in more sweat equity.
Things like that.
(14:35):
And so it becomes challenging.
And so in Florida we have acause of action that can force
co owners to sell that is calledpartition.
And it basically says to thecourt, we own this house
together.
We cannot agree on.
A sale price or that it evenshould be sold.
(14:56):
And if it is sold, what thebreakdown of the money should
be.
So we need you to do it for us.
It's expensive.
It takes quite a while.
All of the attorney's fees andthe expert fees like appraisal
fees, realtor fees, et cetera.
All of that comes out of theproceeds of the house.
(15:17):
So suddenly you've got a housethat's.
A depreciating asset all of asudden, because all of these
fees are going against theproceeds of the sale.
So it happens.
It's always best for people toagree upfront to the extent
possible, but people don't thinkthat way when they enter into
these relationships.
Jim (15:38):
but it's going to be perfect forever.
Crystal (15:41):
That's right.
And look what I tell people is,I hope that you and your sister
never fight about this house.
I hope that you guys never breakup.
I hope whatever, but just incase, let's just draft up this
contract that spells out therights, the responsibilities and
what happens if.
The worst happens and we're nolonger simpatico in this house.
(16:04):
you can spend 1 now or you canspend 4 later.
It's up to you, but the money isgoing to be spent probably.
Jim (16:12):
So the best way really to protect yourself is to be
proactive and talk about, maybea situation that you hope
doesn't happen.
Here's how we're going to solveit if it does.
Exactly.
Crystal (16:22):
Maybe that contract never even comes back out of the
drawer once it's signed.
And listen, you don't evenreally need a lawyer to draft it
up.
It's a contract.
It's about real property.
It's a big deal, right?
But anything that you can getdown on paper with respect to
what you're agreeing to at thetime you're agreeing to it is
(16:43):
better than nothing.
Jim (16:45):
And when we're talking houses down here that maybe it's
in the family for a while,You're talking some big dollars
and a lot of them.
Crystal (16:52):
And this happens to when people unwittingly or
involuntarily become co owners.
This often happens in cases ofprobate where somebody dies and
say five kids inherit a house.
That's the most basic example.
if you've got five kids, thechance that they all get along
(17:12):
perfectly, I think is prettyslim.
Jim (17:14):
idea of what to do.
Crystal (17:15):
do, who helped mom the most, who helped with the fence.
It just goes on and on.
So
Jim (17:22):
yeah,
Crystal (17:22):
it happens.
Jim (17:25):
So what about, we talked a little bit about deeds but going
into that or following that withsurvey and titles, why is it
essential to have a propertysurvey done?
And what are some of the commonissues that come up?
Crystal (17:39):
It's interesting.
Jim (17:40):
and
Crystal (17:40):
I won't make it long, but the most expensive Time
consuming issue that I've everseen raised by lack of a survey
was this, I had a client manyyears ago who purchased a
property in Myakka out in thecountry.
It was a long, narrow piece ofproperty.
(18:00):
I had a house.
Out by the road and then a bigfield out in the back and it was
cross fenced for cattle.
So the 1st part, the front partwas the house, as I said, with a
yard, a landscape yard, and thenthe back part was cows and
stuff.
So it was advertised as 10acres.
At the road and she purchasedthe property.
(18:24):
She was purchasing for cash,which means that there was no
lender who requires a survey.
So that's who typically requiresa survey.
And for good reason, because thelender wants to know that they
have a lien on the property.
Entire property.
They think they have a lien on.
She paid like 500, 000 for thisproperty.
She decides she wants to Build ahouse on that back portion.
(18:48):
She goes and gets a survey andindeed the legal description in
her deed only included the frontportion, that front fenced
portion, which was five acres,not 10.
So assuming it was a mistake andthis clothing didn't go through
my office, but assuming it was amistake, she hired me, asked me
(19:09):
to call the sellers, which Idid.
Ask them, Hey, can we fix thisdeed?
We need to add on that otherpiece that must've been left
off.
And they refused and they said,no, we didn't sell you 10 acres.
We sold you five, even thoughshe paid a 10 acre price, it was
advertised as 10 acres.
And ultimately she had to go toarbitration because of the
(19:31):
contract.
Arbitration is expensive becauseYou have to pay the judge, The
arbitrator.
You're paying the lawyer.
Now you're paying the judge.
It took two years to resolve.
My client paid about 50, 000 infees and ultimately The judge
slash arbitrator forced them toconvey what they were supposed
(19:54):
to convey to start with
Jim (19:56):
right?
Crystal (19:56):
It would have been caught.
It would have said this legaldescription only has 5 acres in
it, or the survey, only has 5 or5 acres on it.
You're right.
And that's how we catch thosethings.
So that was the most egregious.
The most common are fencesoverlapping the boundary sheds
(20:17):
over lapping the boundary, or somuch of this in new
construction.
It's so annoying.
The air conditioner pad becausethe lot lines are so narrow now.
Jim (20:28):
The air
Crystal (20:28):
conditioner pad overlapping the.
lot line.
So what we want to see and whatlenders want to see, what
surveyors want to see is whetherthat encroach, we call those
encroachments when they're overthe line, whether it can be
easily moved.
If it can be easily moved, wedon't really worry that much
(20:48):
about it.
Fences, some people want a fenceagreement with the neighbor that
we're just going to leave it asis, Sheds, you're getting a
little bit into semi permanent,depending on if they're on a
slab or whatever.
Air conditioner pads, samething.
God forbid you had to comethrough there with something for
some reason.
(21:09):
The air conditioner on the padcould be moved, it's still not
great.
The house next door is 12 feetonto my client's property.
And when my client purchased theproperty, he did not obtain a
survey.
And now he's in a lawsuit withhis neighbor because his
neighbor is going to have totear his house down, basically,
(21:32):
at least 12 feet of it.
Jim (21:36):
it seems pretty
Crystal (21:37):
important
Jim (21:38):
for something that's, a couple hundred thousand dollars
or more,
Crystal (21:42):
500
Jim (21:42):
for a survey seems like a smart decision.
Crystal (21:46):
And you can use it for all kinds of stuff.
If you want to build a pool, ifyou want to put up a fence, if
you want to, put in a patio oranything like that, you're going
to have a survey anyway, andit's yours to keep forever.
So it's good to have.
Yes.
Jim (22:01):
And in your house, you just pointed that out.
If you're there 20 years, thatsurvey is still good.
Nothing's changed.
Crystal (22:08):
Exactly.
That's exactly right.
As long as you don't changeanything near the boundaries.
Jim (22:14):
So how does a title company differ from a real estate
lawyer?
Crystal (22:18):
That's a really good question.
Not all real estate lawyers arealso title agents,
Jim (22:23):
right?
Crystal (22:24):
Title agency is governed in Florida by the
office of insurance regulation.
So title agents who are notlawyers have to take a class and
they have to take a test andthey have to have certain
insurance and then they havecertain continuing ed
(22:44):
requirements, et cetera.
As an attorney, I don't have totake a test nor a class to
become a title agent.
I just apply with the titleunderwriter and I'm in assuming
I meet all the otherqualifications like insurance
and my bar license is stillgood.
So obviously that doesn't teachme in particular how to do title
(23:08):
work.
But it's something that hasdeveloped over the years.
The knowledge and skill hasdeveloped over time.
The question about whether touse a real estate attorney
versus a title company is thisof course I'm going to advocate
for using an attorney becausethe party hiring the title, or
(23:31):
paying for the title portion, atleast gets the benefit of an
attorney without having to payextra for it.
So my office charges.
It's the same amount of money intitle fees that other title
agents charge, obviously, or Icouldn't be in business.
I have to be competitive.
(23:52):
You will never see attorney'sfees on a settlement statement
or a closing unless either thebuyer or seller hires me for
that purpose, hires me to betheir lawyer.
Otherwise I'm just an insuranceagent who happens to have a law
degree.
(24:13):
Which is beneficial, and it'sbeneficial for their agents too,
because I help, real estateagents with their contract
language, with addenda, withextensions, with problems, with
survey problems, all the time,completely for free.
Because I want these deals toclose, I want to maintain a
relationship with the agents.
(24:35):
And I want, The buyer and sellerto get what they want, which is
the purchase and sale.
In a roundabout way, the clientends up benefiting from the
realtor having my ear as well.
So I think it's beneficial.
I have no problem with titleagencies.
I think they do a fine job.
It's just, you basically get alawyer for free,
Jim (24:58):
Cool.
What are some of the mostmisunderstood terms in a real
estate contract that buyers andsellers should be aware of?
Crystal (25:05):
This is great.
I'm actually going to make ablog on this.
Jim (25:08):
Yeah.
Crystal (25:08):
I would say that number one, the thing I hate to see is
the closing date to be on orbefore X date, say January 1st.
it adds an element ofuncertainty that is unnecessary.
Say we really want the contractto close on January 1st.
(25:30):
We're open to a closing early.
That is always an option.
As long as the parties agree andthe title company and lender are
ready, you can close wheneveryou want.
You don't need to write on orbefore.
Remember the contract is anagreement between the parties
that can be modified by theparties.
So if you want to close onDecember 30th instead, you can
(25:53):
do that.
You're not tied to that January1st.
So that's one.
Number two is when agents fillin any part of that paragraph
20, which is the miscellaneousparagraph,
Jim (26:06):
right?
Crystal (26:08):
And their agents are almost invited to do that
because there's 20 lines there.
Jim (26:15):
It's a big open space.
Crystal (26:16):
Yeah, the Florida courts have said that agents
should not be writing anythingin there because it's really the
unauthorized practice of law.
But certainly no, no bigparagraphs with lots of details
or differences or anything likethat.
And then the thing that trips upa lot of people, and actually
(26:36):
I've seen this last year, tensof thousands of dollars lost in
deposits is this.
Say there's a financingcontingency, the financing
contingency Ends 30 days fromthe date of the contract that
can always be extended, say, thelender is taking a little
(26:56):
longer, whatever you run intothat can always be extended and
often is, or there's aninspection problem, or you have
3 hurricanes and 2 months orsomething like that.
And so some date gets extended.
Let's say the inspection dategets extended.
Because there was a hurricane.
(27:17):
and then we have anotherhurricane, right?
10 days later.
So now that it's extended again,the inspection date and extended
again, what agents forget andbuyers probably never knew is
that 30 day financingcontingency is still ticking
tick tick.
What I prefer to see withextensions of time is that all
(27:41):
timeframes are extended.
10 days, all timeframes areextended 20 days, not just one
timeframe because the othertimeframes are still tick,
ticking away.
Jim (27:52):
And
Crystal (27:52):
this year alone, I think I've seen probably 25, 000
in lost deposits where thefinancing contingency expired
while some other extension wasbeing granted, whether it was on
the closing date or aninspection.
And Then the buyer can't qualifyor whatever but the contingency
(28:13):
is gone and they lose theirdeposit Why because the sellers
had their place off the marketfor two months.
So It's for buyers and sellersBut buyers in particular to have
a really experienced agenthelping them really
Jim (28:28):
important.
I think you're right there too,because it is very easy to get
tunneled into, Hey, we're goingto push this one back and maybe
the things aren't necessarilycontingent on each other, but
they're all intertwined.
That if any one of them fails,the whole deal is going to be
gone.
And you've got to protectyourself by making sure that
they're all still carryingforward.
(28:49):
That's right.
Crystal (28:50):
That's right.
The contract is everyone'sBible.
We all use it, we all utilize itthe same way toward the same
goal.
Jim (28:59):
How can contingencies we're just talking about in a contract
help or hurt?
Crystal (29:04):
So the contingencies that are built into the
contract, of course, as afinancing contingency, which may
or may not be selected theinspection contingency, which
may or may not be selected, butusually is, and again, I'm just
talking about the as iscontract.
And then there are othercontingencies that don't look
(29:24):
like contingencies that are.
The word contingency is notwritten, but if a let's say that
a homeowner.
A seller lives in an HOA and thedues are 500 a month and it's an
(29:46):
absent seller.
They live up in Michigan orwhatever, and they didn't
realize they didn't get thenotice that there's a 20, 000
special assessment while thetitle company is going to get
that information and relay it tothe buyer and seller.
And maybe at that point, the.
The buyer says I don't want todeal with that in a year, 20,
(30:09):
000 special assessment.
I want out.
And by the way, the dues aregoing up to seven 50 too.
I don't, I want out.
So there's a provision in thecontract and in the homeowner
association rider that providesthat a buyer can get out of the
contract if those terms aredifferent than what the seller
initially represented.
(30:30):
It's also, they're also.
Documents, I'm sorry, aprovision that says if the buyer
is able to read the declarationfor the condo or the HOA and
doesn't like what's in there,maybe it says you can't park a
pickup truck in the driveway andthat's what they have is an 80,
000 beautiful pickup truck thatwon't fit in the garage.
(30:52):
That's going to be a deal killerfor them.
Those are contingencies that arenot written in very obviously,
but they are contingencies.
And then, of course, the titlecontingency, if there's a
problem with the title in thechain in the past or with liens
or things like that there'sprovision in the contract that
allows the seller to attempt toremedy that situation.
(31:14):
So in that way, the contract iscontingent on the title being
good, basically.
Jim (31:21):
So
Crystal (31:21):
it's not written that way, but That's what it means.
Jim (31:24):
And it's there to protect both sides that if it's not
going to work, great, close thedeal out and let that seller get
back on the market so they'renot losing time with it sitting
there doing nothing.
Crystal (31:35):
What
Jim (31:35):
rights do buyers have if a seller fails to disclose known
issues with a property?
Crystal (31:41):
Oh, boy, I've got some stories on that, too.
We'll start first with the law.
The law in Florida is thatresidential sellers, not
commercial, residential sellersmust disclose all known facts
that materially affect the valueof the home that are not Readily
(32:01):
observable to the buyer.
What the heck does that mean?
It means that if the sellerknows of a problem with the
house, whether it be past,present, or future, and that
problem materially affects.
So we're talking, in thethousands of dollars affects the
value of the home, the sellermust disclose it, period, the
(32:21):
end.
Even if the problem happened inthe past.
Such as the case I had withthese nice sellers had a rat
infestation in their house.
They were young couple, firsttime home buyers.
They worked to with their.
Pest control folks to get rid ofthis problem.
(32:41):
Finally, the rats wereeradicated after about a year
and they finally went to sellthe house after a couple of
years, used the same agent whohad helped them buy it, They
asked, do we need to disclosethe rat problem?
The agent gave the wrong answer,which was no, you don't because
it's been fixed.
And so they closed another younghome buyer, first time home
(33:05):
buyer bought the house.
And a fire broke out because ofthe wiring in the attic caused
by an expert testified wascaused by the rats.
Had the seller disclosed the ratproblem, it would have given the
(33:26):
buyer the opportunity.
To pay particular attention tothose items that are affected by
rats, insulation, wiring,drywall, things like that, but
because she didn't know, theinspector didn't know, and they
didn't pay particular attention,and her house, Was significantly
damaged and in that case thatyoung couple got sued and they
(33:51):
lost.
Yeah, I don't know how they everreally came back from that.
Jim (33:54):
000.
Crystal (33:56):
Yes.
So had it been disclosed and thefire had broken out there, they
would have had no liabilitywhatsoever, right?
None.
They would have been completelyabsolved of it.
So good lesson over disclose,let the buyer figure out if they
want more information or if theywant to look into it more, but
over disclosed.
Jim (34:16):
Yeah it's better to disclose it and maybe you don't
get the sale, but you're not onthe hook for 70, 000 down the
road.
Crystal (34:23):
So another good time, to just check in with an
attorney.
Hopefully you have a veryexperienced agent.
They will give you the correctadvice, but It really is a legal
question.
Does this problem with my housemeet the definition legally?
Of something I have to disclose.
It's really a legal question.
Certainly.
I wouldn't charge money to givemy opinion on that.
(34:46):
Just, 10 or 15 minuteconversation, but another reason
to use a law firm for your realestate transaction.
Jim (34:54):
Yeah.
The difference there is that youhave the knowledge and the legal
ability to make that.
Information to them,
Crystal (35:02):
Commercial is completely different.
Strangely commercial.
And I know that's not what we'rereally talking about, but
commercial is buyer beware.
Commercial is like buying a car.
As long as the seller doesn'tout and out lie about something,
the seller can say not one word,not a word.
Jim (35:21):
Amazing.
Crystal (35:22):
Yep.
Real estate's a pretty coolthing.
Jim (35:26):
Every time I think I've got a good grip on it, I turn around
and go, Ooh, look, there'sanother whole field.
Crystal (35:31):
I know,
Jim (35:34):
Crystal, I have so many more questions, but I've taken
up a lot of your time today.
I would love to be able to doanother one.
Go through, do some morequestions, maybe next month or
in a couple of weeks and we'llget back together I appreciate
your time today and earlyenjoyed it.
So thank you.
Crystal (35:49):
Thank you, Jim, for the opportunity.
Welcome to Jim Sells the Suncoast.
(00:01):
Today I have the honor andpleasure of having Crystal Gome,
who is a lawyer, real estatelawyer in the area.
So welcome.
Crystal (00:09):
Hi, Jim.
Thank you for having me today.
I'm a real estate and businessattorney.
My office is based in Bradenton,but I work all over the state of
Florida, focus on the Southwestcoast, Sarasota, Manatee County,
Pinellas.
The focus of my practice is realestate and we do all types of
(00:31):
real estate transactions,commercial and residential.
We do Loan documents.
We do things pertaining tocondominium and homeowners
associations, et cetera.
And then I also handle quite abit of business law as well.
I've been a real estate attorneyfor 20 years.
(00:52):
Right here in Bradenton, andI've had my own firm for 17 of
those years.
I have a great staff.
collectively, we have 130 yearsof experience, a pretty deep
bench, which is great.
Jim (01:07):
So if something happens, you've already seen it at least
once.
Crystal (01:09):
Not surprised very often.
Jim (01:11):
So in the 20 years that you've been in this area, so
much has changed, so much isgrowing on with the growth in
the area.
I wanted to, pick your brain onthe real estate law side of what
goes on.
I think most people go out, Oh,I want to paint the color, but
let's talk about all the thingsthat go into it.
Maybe starting with the types ofdeeds.
I know there's several types andwhen should they be used?
(01:34):
Warranty, quick claim startingat the very beginning, okay.
Crystal (01:38):
The simplest type of deed and the deed that conveys
the least amount of rights andproperty is a quitclaim deed.
And a lot of people think that aquitclaim deed basically deeds
over or conveys the property toanother individual, but all it
(01:58):
really does is conveys theportion of property that the
conveyor owns.
There's no guarantee that persona owns the entire thing, but
what person a is conveying isall that they do own.
It's basically without awarranty so that person B could
(02:19):
not go back to person A and say,Hey, you were supposed to sell
me five acres or deed over to mefive acres, but you only deeded
over to me That's probablybecause person A only owned the
two to give
Jim (02:34):
Yeah.
Okay.
Would it be right to say thatthey're really just giving up
their particular interests?
In that property, notnecessarily guarantee all of the
interest in that property.
Crystal (02:44):
And then we have warranty deeds, which are the
most common in traditional realestate transactions.
And in those deeds, even withouttitle insurance, the seller or
the grantor, as the case may be,person A, we'll call him is
guaranteeing.
the complete transfer of theproperty to person B such that
(03:09):
person B could come back toperson a under that warranty
basically and sue them.
And so that's say if it'sineffective or incomplete that
would be one remedy under awarranty deed.
And then there are differenttypes of deeds, a personal
representative's deed, thathappens in probate where the
(03:32):
personal representative orexecutor, so to speak, can
convey the property on behalf ofthe estate, which makes sense
because the PR sort of stands asthe boss or the CEO of the
estate.
And then we have the trusteedeeds, which are the same type
of thing.
The trustee is acting in itscapacity as the trustee, as the
(03:54):
boss of the trust.
So can convey that way.
So then it's a quick.
Claim deed.
When is that used?
Is that for like specificscenarios?
No nothing.
Jim (04:06):
Okay,
Crystal (04:06):
Appropriate or non appropriate it, as a blanket
statement, but definitely awarranty deed is best.
People often find them onlineand give them, a college try
thinking that they do more thanthey actually do.
Jim (04:20):
That they're implying things that aren't necessarily
there.
Crystal (04:23):
Yep.
So we use quick claim deeds.
say it's a husband and wife whohave divorced and they've come
up with an agreement where oneis going to, come off of the
property title.
Basically, that's a perfectexample of a quick claim deed
because they already own it.
A simple quick claim deed wherethe husband conveys his portion
(04:45):
to the wife as agreed isperfectly fine.
Because they're already coowners, so claim deeds work well
that way.
Jim (04:54):
Okay.
Crystal (04:55):
Yeah.
Jim (04:55):
So as a potential buyer seller, don't just assume
because a quick claim deed isbeing proffered, that's going to
solve all your issues.
You need to pay attention andFollow up on it,
Crystal (05:05):
right?
That's really bottom, bottom ofthe barrel and not what you want
for your hard earned money.
Jim (05:13):
Yeah, I can get pricey
Crystal (05:14):
exactly.
Jim (05:15):
Can you explain how the homestead exemption works and
how it benefits homeowners?
Crystal (05:20):
Sure.
So homestead in Florida hasseveral different parts.
Most people think of it only asa homestead exemption.
So I'll start out with themisconstrued portions.
Number one.
A lot of people think that it'sjust a homestead exemption which
(05:42):
is just a, basically a taxreduction.
there are other parts guaranteedby the Florida Constitution,
which I'll get into in a moment.
When it comes to the homesteadexemption, a lot of people
mistakenly think, and I'msurprised at the number of
realtors who also think this,that so long as A person resides
(06:03):
in their home for six months andone day that they qualify for
the Homestead Exemption, or ifthey have a Florida driver's
license, or if they have theircar registered in Florida.
None of those things granteligibility for Homestead
Exemption, none of themindividually, and none of them
(06:23):
together.
What the Florida Constitutionsays, and as Most constitutions
are.
It's intentionally vague saysthat you can number one, only
have one homestead in the world,
Jim (06:35):
right?
Crystal (06:36):
Number two, the homestead is defined.
Primary place of residence, andif you are absent from that
place for a period of time, youintend to return to it.
Let's say you go and visit yourmother up north for four months,
as long as you're coming back.
(06:56):
Same is true.
If you decide to go on a worldtour, a year long world cruise,
you will not lose your homesteadexemption as long as you only
have one and you intend toreturn.
And importantly, you do not useit for commercial purpose.
So the other parts of Homestead,which I can go a little quicker
on, but very interesting.
(07:18):
number one is the protection forthe family.
So Homestead property cannot beconveyed away from the family
without the other spousesagreement written signature.
Let's say a husband and wife owna house, and for whatever
reason, they each have a will,one wants to give the property
(07:42):
to Save the Whales Foundationthat will not work.
The homestead is preserved forthe family, that is for the
spouse and minor children.
And then a lot of people don'trealize this, but creditor
protection is another homesteadprotection.
And that's part of the reasonwhy all the crooks moved to
(08:04):
Florida, because just thinkBernie Madoff and OJ Simpson,
whether you believe he did it ornot, that's part of the reason
these folks move here is becausetheir homestead, even if it's a
50 million mansion, is 100percent protected from claims of
creditors.
(08:24):
So if you have a 10 millionjudgment and someone wants to
collect against your home andthat's your homestead, they
cannot do it.
Whether it's a car accident, acredit card, so super important.
You asked a little bit aboutportability and I have to be
honest with you.
I have a cheat sheet on thatbecause it is complicated and it
(08:46):
seems like even after 20 years,probably because I only have to
answer the question once a yearor so.
But I will tell you the clerk'soffices, at least in our area
here on the West Coast, havevery good websites, very
detailed, very thorough.
They've got checklists, they'vegot forms and they're really
friendly when you call or godown there.
(09:08):
And that's not just in myexperience as a lawyer, but also
as a member of the public, veryhelpful to call and say, listen,
I sold this house.
I'm buying this house.
Do I get portability?
They will answer your questionover the phone.
Very simple.
Jim (09:24):
And I would concur about the website.
Pretty close to what you have inthere that if you needed to use
it, it's available.
Crystal (09:31):
Exactly.
It's Very user friendly.
So not to dodge the questionabout portability, but basically
if you sell a house and it'syour homestead and you buy
another one in Florida and it'sgoing to be your homestead, you
can port over your homesteadeither in whole or in part, It's
your right as a Floridaresident.
Jim (09:52):
Absolutely.
And there's so many potentialbenefits from doing homestead.
There's no reason not to do it.
And unfortunately, I don't thinkwe talk about it enough when
we're selling a house, whenwe're buying a house
Crystal (10:05):
And the deadline is in March.
I really hammer this hard on myFacebook page at the beginning
of the year.
I say, check your smokedetectors and check the property
appraiser site and make sure youhave your homestead exemption.
I have a friend who followed myadvice last year and did that
and indeed had purchased theirhomestead seven years ago.
(10:27):
And they still had no homesteadexemption.
Jim (10:30):
Yeah, it slips right through the cracks.
Crystal (10:33):
goes to the bottom of the stack and you don't get to
it.
Jim (10:36):
And again, you can do everything online now.
We did ours, was able to go inthere, send him a thing in the
mail.
Actually, I emailed it.
Done.
Crystal (10:45):
Very simple.
Free.
Of course.
The other thing I forgot to tellyou about Homestead, and this is
really important.
Homestead also caps yourproperty taxes.
So when you have a Homesteadexemption, which is a tax
reduction, you're also given a 3percent cap so that your
property taxes cannot increasemore than 3 percent in any given
(11:09):
year, no matter what the marketdoes.
So that's called the save ourhomes cap.
Jim (11:16):
Oh, sure.
Crystal (11:16):
And it was running people out of the state because
people couldn't afford it.
They were still the same familywho could afford a hundred
thousand dollar house 30 yearsago.
Jim (11:26):
And it's particularly evident now when we look at the
run up in this area from 2019,where homes are 80 percent more,
you might've gone up 15 percentin total taxable taxes versus 80
percent more.
Crystal (11:40):
Yeah really important.
I don't know how you handletalking about property taxes
with buyers, I think a lot ofpeople are surprised when they
get Their first tax bill andit's significantly higher than
what was prorated at closing.
Jim (11:56):
right.
Crystal (11:58):
Buyers should always take the purchase price.
And go into the tax collector'swebsite and find the last tax
bill, take the millage rate andmultiply that out against the
purchase price that will get youpretty close.
(12:18):
It should be more like thepurchase price times about 80
percent and then that numbertimes the millage rate that will
get you pretty close.
So that you're not shocked whenthe tax bill comes, particularly
if you're buying from somebodywho's lived there a long time.
Jim (12:35):
You're on the opposite side of that Save Our Home 3 percent
cap, where it's escalated andall of a sudden you're now
paying on this new value.
Crystal (12:42):
That's right.
the taxes are artificially lowwhen somebody has owned a home
that long.
Jim (12:46):
I do know the Hillsborough County site has it on it where
you can put in a price and it'lltell you within a small range
the approximate taxes on thisnew purchase price.
Crystal (12:54):
yes, I heard that which is great.
Jim (12:59):
Let's talk a little bit maybe about some co ownership
pitfalls.
What are some common legalissues that arise with co
ownership, such as joint tenancyversus tenancy in common?
Crystal (13:09):
So there are three types of ownership in Florida.
One is, the easiest, is tenantsby the entireties.
that's married couples thenthere are tenants in common,
which are non married couples orpeople who own the property.
It can be by percentages, but tothe extent the deed does not
(13:31):
have a percentage, then it ispresumed that both people own
the whole home.
So they both own the whole pie.
The pie is not split in half.
Because the house can't be splitin half.
most non married people ownhomes as joint tenants in
common.
And then the third way is jointtenants with right of
(13:52):
survivorship, With the right ofsurvivorship so that the last
man standing, so to speak, ownsthe home without claims from the
other's heirs or creditors oranything like that.
The issue that arises, ofcourse, is some people don't get
along as co owners, whether theywere Boyfriend and girlfriend or
(14:15):
family members or businesspartners or whatever, for
whatever reason they no longerget along.
And so usually one wants to sellthe house and the other wants to
keep it.
There's usually a disagreementabout who's put in more money,
who's put in more sweat equity.
Things like that.
(14:35):
And so it becomes challenging.
And so in Florida we have acause of action that can force
co owners to sell that is calledpartition.
And it basically says to thecourt, we own this house
together.
We cannot agree on.
A sale price or that it evenshould be sold.
(14:56):
And if it is sold, what thebreakdown of the money should
be.
So we need you to do it for us.
It's expensive.
It takes quite a while.
All of the attorney's fees andthe expert fees like appraisal
fees, realtor fees, et cetera.
All of that comes out of theproceeds of the house.
(15:17):
So suddenly you've got a housethat's.
A depreciating asset all of asudden, because all of these
fees are going against theproceeds of the sale.
So it happens.
It's always best for people toagree upfront to the extent
possible, but people don't thinkthat way when they enter into
these relationships.
Jim (15:38):
but it's going to be perfect forever.
Crystal (15:41):
That's right.
And look what I tell people is,I hope that you and your sister
never fight about this house.
I hope that you guys never breakup.
I hope whatever, but just incase, let's just draft up this
contract that spells out therights, the responsibilities and
what happens if.
The worst happens and we're nolonger simpatico in this house.
(16:04):
you can spend 1 now or you canspend 4 later.
It's up to you, but the money isgoing to be spent probably.
Jim (16:12):
So the best way really to protect yourself is to be
proactive and talk about, maybea situation that you hope
doesn't happen.
Here's how we're going to solveit if it does.
Exactly.
Crystal (16:22):
Maybe that contract never even comes back out of the
drawer once it's signed.
And listen, you don't evenreally need a lawyer to draft it
up.
It's a contract.
It's about real property.
It's a big deal, right?
But anything that you can getdown on paper with respect to
what you're agreeing to at thetime you're agreeing to it is
(16:43):
better than nothing.
Jim (16:45):
And when we're talking houses down here that maybe it's
in the family for a while,You're talking some big dollars
and a lot of them.
Crystal (16:52):
And this happens to when people unwittingly or
involuntarily become co owners.
This often happens in cases ofprobate where somebody dies and
say five kids inherit a house.
That's the most basic example.
if you've got five kids, thechance that they all get along
(17:12):
perfectly, I think is prettyslim.
Jim (17:14):
idea of what to do.
Crystal (17:15):
do, who helped mom the most, who helped with the fence.
It just goes on and on.
So
Jim (17:22):
yeah,
Crystal (17:22):
it happens.
Jim (17:25):
So what about, we talked a little bit about deeds but going
into that or following that withsurvey and titles, why is it
essential to have a propertysurvey done?
And what are some of the commonissues that come up?
Crystal (17:39):
It's interesting.
Jim (17:40):
and
Crystal (17:40):
I won't make it long, but the most expensive Time
consuming issue that I've everseen raised by lack of a survey
was this, I had a client manyyears ago who purchased a
property in Myakka out in thecountry.
It was a long, narrow piece ofproperty.
(18:00):
I had a house.
Out by the road and then a bigfield out in the back and it was
cross fenced for cattle.
So the 1st part, the front partwas the house, as I said, with a
yard, a landscape yard, and thenthe back part was cows and
stuff.
So it was advertised as 10acres.
At the road and she purchasedthe property.
(18:24):
She was purchasing for cash,which means that there was no
lender who requires a survey.
So that's who typically requiresa survey.
And for good reason, because thelender wants to know that they
have a lien on the property.
Entire property.
They think they have a lien on.
She paid like 500, 000 for thisproperty.
She decides she wants to Build ahouse on that back portion.
(18:48):
She goes and gets a survey andindeed the legal description in
her deed only included the frontportion, that front fenced
portion, which was five acres,not 10.
So assuming it was a mistake andthis clothing didn't go through
my office, but assuming it was amistake, she hired me, asked me
(19:09):
to call the sellers, which Idid.
Ask them, Hey, can we fix thisdeed?
We need to add on that otherpiece that must've been left
off.
And they refused and they said,no, we didn't sell you 10 acres.
We sold you five, even thoughshe paid a 10 acre price, it was
advertised as 10 acres.
And ultimately she had to go toarbitration because of the
(19:31):
contract.
Arbitration is expensive becauseYou have to pay the judge, The
arbitrator.
You're paying the lawyer.
Now you're paying the judge.
It took two years to resolve.
My client paid about 50, 000 infees and ultimately The judge
slash arbitrator forced them toconvey what they were supposed
(19:54):
to convey to start with
Jim (19:56):
right?
Crystal (19:56):
It would have been caught.
It would have said this legaldescription only has 5 acres in
it, or the survey, only has 5 or5 acres on it.
You're right.
And that's how we catch thosethings.
So that was the most egregious.
The most common are fencesoverlapping the boundary sheds
(20:17):
over lapping the boundary, or somuch of this in new
construction.
It's so annoying.
The air conditioner pad becausethe lot lines are so narrow now.
Jim (20:28):
The air
Crystal (20:28):
conditioner pad overlapping the.
lot line.
So what we want to see and whatlenders want to see, what
surveyors want to see is whetherthat encroach, we call those
encroachments when they're overthe line, whether it can be
easily moved.
If it can be easily moved, wedon't really worry that much
(20:48):
about it.
Fences, some people want a fenceagreement with the neighbor that
we're just going to leave it asis, Sheds, you're getting a
little bit into semi permanent,depending on if they're on a
slab or whatever.
Air conditioner pads, samething.
God forbid you had to comethrough there with something for
some reason.
(21:09):
The air conditioner on the padcould be moved, it's still not
great.
The house next door is 12 feetonto my client's property.
And when my client purchased theproperty, he did not obtain a
survey.
And now he's in a lawsuit withhis neighbor because his
neighbor is going to have totear his house down, basically,
(21:32):
at least 12 feet of it.
Jim (21:36):
it seems pretty
Crystal (21:37):
important
Jim (21:38):
for something that's, a couple hundred thousand dollars
or more,
Crystal (21:42):
500
Jim (21:42):
for a survey seems like a smart decision.
Crystal (21:46):
And you can use it for all kinds of stuff.
If you want to build a pool, ifyou want to put up a fence, if
you want to, put in a patio oranything like that, you're going
to have a survey anyway, andit's yours to keep forever.
So it's good to have.
Yes.
Jim (22:01):
And in your house, you just pointed that out.
If you're there 20 years, thatsurvey is still good.
Nothing's changed.
Crystal (22:08):
Exactly.
That's exactly right.
As long as you don't changeanything near the boundaries.
Jim (22:14):
So how does a title company differ from a real estate
lawyer?
Crystal (22:18):
That's a really good question.
Not all real estate lawyers arealso title agents,
Jim (22:23):
right?
Crystal (22:24):
Title agency is governed in Florida by the
office of insurance regulation.
So title agents who are notlawyers have to take a class and
they have to take a test andthey have to have certain
insurance and then they havecertain continuing ed
(22:44):
requirements, et cetera.
As an attorney, I don't have totake a test nor a class to
become a title agent.
I just apply with the titleunderwriter and I'm in assuming
I meet all the otherqualifications like insurance
and my bar license is stillgood.
So obviously that doesn't teachme in particular how to do title
(23:08):
work.
But it's something that hasdeveloped over the years.
The knowledge and skill hasdeveloped over time.
The question about whether touse a real estate attorney
versus a title company is thisof course I'm going to advocate
for using an attorney becausethe party hiring the title, or
(23:31):
paying for the title portion, atleast gets the benefit of an
attorney without having to payextra for it.
So my office charges.
It's the same amount of money intitle fees that other title
agents charge, obviously, or Icouldn't be in business.
I have to be competitive.
(23:52):
You will never see attorney'sfees on a settlement statement
or a closing unless either thebuyer or seller hires me for
that purpose, hires me to betheir lawyer.
Otherwise I'm just an insuranceagent who happens to have a law
degree.
(24:13):
Which is beneficial, and it'sbeneficial for their agents too,
because I help, real estateagents with their contract
language, with addenda, withextensions, with problems, with
survey problems, all the time,completely for free.
Because I want these deals toclose, I want to maintain a
relationship with the agents.
(24:35):
And I want, The buyer and sellerto get what they want, which is
the purchase and sale.
In a roundabout way, the clientends up benefiting from the
realtor having my ear as well.
So I think it's beneficial.
I have no problem with titleagencies.
I think they do a fine job.
It's just, you basically get alawyer for free,
Jim (24:58):
Cool.
What are some of the mostmisunderstood terms in a real
estate contract that buyers andsellers should be aware of?
Crystal (25:05):
This is great.
I'm actually going to make ablog on this.
Jim (25:08):
Yeah.
Crystal (25:08):
I would say that number one, the thing I hate to see is
the closing date to be on orbefore X date, say January 1st.
it adds an element ofuncertainty that is unnecessary.
Say we really want the contractto close on January 1st.
(25:30):
We're open to a closing early.
That is always an option.
As long as the parties agree andthe title company and lender are
ready, you can close wheneveryou want.
You don't need to write on orbefore.
Remember the contract is anagreement between the parties
that can be modified by theparties.
So if you want to close onDecember 30th instead, you can
(25:53):
do that.
You're not tied to that January1st.
So that's one.
Number two is when agents fillin any part of that paragraph
20, which is the miscellaneousparagraph,
Jim (26:06):
right?
Crystal (26:08):
And their agents are almost invited to do that
because there's 20 lines there.
Jim (26:15):
It's a big open space.
Crystal (26:16):
Yeah, the Florida courts have said that agents
should not be writing anythingin there because it's really the
unauthorized practice of law.
But certainly no, no bigparagraphs with lots of details
or differences or anything likethat.
And then the thing that trips upa lot of people, and actually
(26:36):
I've seen this last year, tensof thousands of dollars lost in
deposits is this.
Say there's a financingcontingency, the financing
contingency Ends 30 days fromthe date of the contract that
can always be extended, say, thelender is taking a little
(26:56):
longer, whatever you run intothat can always be extended and
often is, or there's aninspection problem, or you have
3 hurricanes and 2 months orsomething like that.
And so some date gets extended.
Let's say the inspection dategets extended.
Because there was a hurricane.
(27:17):
and then we have anotherhurricane, right?
10 days later.
So now that it's extended again,the inspection date and extended
again, what agents forget andbuyers probably never knew is
that 30 day financingcontingency is still ticking
tick tick.
What I prefer to see withextensions of time is that all
(27:41):
timeframes are extended.
10 days, all timeframes areextended 20 days, not just one
timeframe because the othertimeframes are still tick,
ticking away.
Jim (27:52):
And
Crystal (27:52):
this year alone, I think I've seen probably 25, 000
in lost deposits where thefinancing contingency expired
while some other extension wasbeing granted, whether it was on
the closing date or aninspection.
And Then the buyer can't qualifyor whatever but the contingency
(28:13):
is gone and they lose theirdeposit Why because the sellers
had their place off the marketfor two months.
So It's for buyers and sellersBut buyers in particular to have
a really experienced agenthelping them really
Jim (28:28):
important.
I think you're right there too,because it is very easy to get
tunneled into, Hey, we're goingto push this one back and maybe
the things aren't necessarilycontingent on each other, but
they're all intertwined.
That if any one of them fails,the whole deal is going to be
gone.
And you've got to protectyourself by making sure that
they're all still carryingforward.
(28:49):
That's right.
Crystal (28:50):
That's right.
The contract is everyone'sBible.
We all use it, we all utilize itthe same way toward the same
goal.
Jim (28:59):
How can contingencies we're just talking about in a contract
help or hurt?
Crystal (29:04):
So the contingencies that are built into the
contract, of course, as afinancing contingency, which may
or may not be selected theinspection contingency, which
may or may not be selected, butusually is, and again, I'm just
talking about the as iscontract.
And then there are othercontingencies that don't look
(29:24):
like contingencies that are.
The word contingency is notwritten, but if a let's say that
a homeowner.
A seller lives in an HOA and thedues are 500 a month and it's an
(29:46):
absent seller.
They live up in Michigan orwhatever, and they didn't
realize they didn't get thenotice that there's a 20, 000
special assessment while thetitle company is going to get
that information and relay it tothe buyer and seller.
And maybe at that point, the.
The buyer says I don't want todeal with that in a year, 20,
(30:09):
000 special assessment.
I want out.
And by the way, the dues aregoing up to seven 50 too.
I don't, I want out.
So there's a provision in thecontract and in the homeowner
association rider that providesthat a buyer can get out of the
contract if those terms aredifferent than what the seller
initially represented.
(30:30):
It's also, they're also.
Documents, I'm sorry, aprovision that says if the buyer
is able to read the declarationfor the condo or the HOA and
doesn't like what's in there,maybe it says you can't park a
pickup truck in the driveway andthat's what they have is an 80,
000 beautiful pickup truck thatwon't fit in the garage.
(30:52):
That's going to be a deal killerfor them.
Those are contingencies that arenot written in very obviously,
but they are contingencies.
And then, of course, the titlecontingency, if there's a
problem with the title in thechain in the past or with liens
or things like that there'sprovision in the contract that
allows the seller to attempt toremedy that situation.
(31:14):
So in that way, the contract iscontingent on the title being
good, basically.
Jim (31:21):
So
Crystal (31:21):
it's not written that way, but That's what it means.
Jim (31:24):
And it's there to protect both sides that if it's not
going to work, great, close thedeal out and let that seller get
back on the market so they'renot losing time with it sitting
there doing nothing.
Crystal (31:35):
What
Jim (31:35):
rights do buyers have if a seller fails to disclose known
issues with a property?
Crystal (31:41):
Oh, boy, I've got some stories on that, too.
We'll start first with the law.
The law in Florida is thatresidential sellers, not
commercial, residential sellersmust disclose all known facts
that materially affect the valueof the home that are not Readily
(32:01):
observable to the buyer.
What the heck does that mean?
It means that if the sellerknows of a problem with the
house, whether it be past,present, or future, and that
problem materially affects.
So we're talking, in thethousands of dollars affects the
value of the home, the sellermust disclose it, period, the
(32:21):
end.
Even if the problem happened inthe past.
Such as the case I had withthese nice sellers had a rat
infestation in their house.
They were young couple, firsttime home buyers.
They worked to with their.
Pest control folks to get rid ofthis problem.
(32:41):
Finally, the rats wereeradicated after about a year
and they finally went to sellthe house after a couple of
years, used the same agent whohad helped them buy it, They
asked, do we need to disclosethe rat problem?
The agent gave the wrong answer,which was no, you don't because
it's been fixed.
And so they closed another younghome buyer, first time home
(33:05):
buyer bought the house.
And a fire broke out because ofthe wiring in the attic caused
by an expert testified wascaused by the rats.
Had the seller disclosed the ratproblem, it would have given the
(33:26):
buyer the opportunity.
To pay particular attention tothose items that are affected by
rats, insulation, wiring,drywall, things like that, but
because she didn't know, theinspector didn't know, and they
didn't pay particular attention,and her house, Was significantly
damaged and in that case thatyoung couple got sued and they
(33:51):
lost.
Yeah, I don't know how they everreally came back from that.
Jim (33:54):
000.
Crystal (33:56):
Yes.
So had it been disclosed and thefire had broken out there, they
would have had no liabilitywhatsoever, right?
None.
They would have been completelyabsolved of it.
So good lesson over disclose,let the buyer figure out if they
want more information or if theywant to look into it more, but
over disclosed.
Jim (34:16):
Yeah it's better to disclose it and maybe you don't
get the sale, but you're not onthe hook for 70, 000 down the
road.
Crystal (34:23):
So another good time, to just check in with an
attorney.
Hopefully you have a veryexperienced agent.
They will give you the correctadvice, but It really is a legal
question.
Does this problem with my housemeet the definition legally?
Of something I have to disclose.
It's really a legal question.
Certainly.
I wouldn't charge money to givemy opinion on that.
(34:46):
Just, 10 or 15 minuteconversation, but another reason
to use a law firm for your realestate transaction.
Jim (34:54):
Yeah.
The difference there is that youhave the knowledge and the legal
ability to make that.
Information to them,
Crystal (35:02):
Commercial is completely different.
Strangely commercial.
And I know that's not what we'rereally talking about, but
commercial is buyer beware.
Commercial is like buying a car.
As long as the seller doesn'tout and out lie about something,
the seller can say not one word,not a word.
Jim (35:21):
Amazing.
Crystal (35:22):
Yep.
Real estate's a pretty coolthing.
Jim (35:26):
Every time I think I've got a good grip on it, I turn around
and go, Ooh, look, there'sanother whole field.
Crystal (35:31):
I know,
Jim (35:34):
Crystal, I have so many more questions, but I've taken
up a lot of your time today.
I would love to be able to doanother one.
Go through, do some morequestions, maybe next month or
in a couple of weeks and we'llget back together I appreciate
your time today and earlyenjoyed it.
So thank you.
Crystal (35:49):
Thank you, Jim, for the opportunity.
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