Following the Florida Realtors 2015 Convention, The SanibelSusan Team and I are back into the swing of things on Sanibel. Though the islands are pretty quiet now – sometimes no cars passing by on Periwinkle Way – we all will be anxiously watching the weather this weekend hoping that Tropical Storm Erika heads away from Florida. Heavy but occasional showers this week have “greened” the island up, while there have been reports of minor flooding in some of the heavily traveled areas off island.
SanibelSusan Realty Associates
A few of our listings had good showings this week too, but not much sales action was reported. Below are a few news items followed by the activity posted since last Friday in the Sanibel and Captiva Multiple Listing Service.
Today we had an advance signing for an upcoming closing. Barrier Island Title Services, Inc. who holds our company escrows and performs most of SanibelSusan’s closings, usually, with notice, can prepare closing documents in advance. In this case, the sellers’ signing coincided with their last island visit before the actual closing date. The sale will not officially occur until later, but signing ahead eliminates the need for a mail-away for that half of the sale. Thanks to Barrier’s Closing Officer Angie Martin for facilitating this convenience.
Sanibel & Captiva Islands Association of Realtors®
Our local Sanibel & Captiva Association of Realtors® held its August membership breakfast meeting yesterday. Members were updated on the leadership team’s meetings in Orlando last week and the educational segment of the meeting included a presentation by Board Certified Real Estate Attorney Ned Hale on the new Consumer Protection Financial Bureau Rules that become effective October 3. Known as the Integrated Mortgage Disclosure Rule, here are some highlights.
Integrated Mortgage Disclosure Rule
Federally-mandated changes affect residential sales with mortgage financing and apply to any loan application taken by a lender on or after October 3. They are the result of the Dodd-Frank-Act of 2010.
The Consumer Financial Protection Bureau (CFPB), an entity created by the Dodd Frank Act, issued a new Truth in Lending Act (TILA) final regulation that, among other things, created two new forms (each with many variations) and new 3-business day delivery requirements.
Beyond possibility adding more time to the window from contract to closing, the changes also involve new terminology. For example, a new form called the “Loan Estimate” replaces the former Good Faith Estimate (GFE) and Initial Truth-in-Lending Disclosure (TIL). More importantly, a new “Closing Disclosure” will replace the HUD-1 Settlement Statement and Final Truth-in-Lending Disclosure (TIL).
Under the new rule, the consumer is required to receive the new “Loan Estimate” three business days after application. What constitutes application? 1. Consumer’s name, 2. Consumer’s income, 3. Consumer’s social security number, 4. A property address, 5. An estimate value of the property, 6. The mortgage loan amount sought. The “Loan Estimate” will be issued by the lender or mortgage broker.
The consumer also is required to receive the new “Closing Disclosure” three business days before the closing or when the loan is consummated. The “Closing Disclosure” will be issued by the lender or settlement agent if the lender delegates that responsibility to them.
How is this going to impact a Realtor® and their business?
- Closings may take longer because of the 3-business day review periods.
- Different forms will be used for most transactions.
- Realtor® contact information and license numbers will be on the new “Closing Disclosure”.
- Buyers may receive multiple “Loan Estimates” due to changed circumstances, multiple applications, or multiple applications with different loan products with the same lender.
- Clients may receive multiple “Closing Disclosures”, some with a three business-day waiting period and some without, and some before closing and some after.
Like all new rules, there will be a learning curve, but I think that we can assume that the closing process will take longer if there is a mortgage. If a transaction, with bank financing, normally would take 30-45 days to close, it likely will take longer. If expenses are to be included on a “Closing Disclosure”, the lender and the title company will need the invoices well in advance of the closing date. Contact information for home- and condo-owners associations will need to be provided earlier too. Realtor® communication will remain key, particularly with lenders and title companies regarding any potential delays, out-of-state signings, powers-of-attorney, or seller credit adjustments. Getting from contract to closing always takes Realtor® attention and diligence – but after October 3, it will be even more important.
Upcoming Realtor Events
Wondering what local Realtors® are doing to help the community? Many of us have marked our calendars for the upcoming events.
- Coastal Clean-up – Sep 19 – Realtor® teams will participate in this world-wide Coastal Clean-up event which here is organized by SCCF (Sanibel-Captiva Conservation Foundation).
- Habitat for Humanity – Date TBD in Sep – In May, Sanibel Realtors® prepped and painted a new Habitat for Humanity home in San Carlos Park. It was especially rewarding because the Mom, who with her children would be moving into the home, worked hand-in-hand. A date for some new home building tasks soon will be assigned to Sanibel’s Realtors®.
- Meals of Hope – Date TBD in Nov – Meals of Hope is a local non-profit that arranges for the packaging of nutritional meals by volunteers. The food packages then are distributed by accredited food bank partners. Last summer, Elise and I joined other real estate association colleagues from Southwest Florida in one of these food packaging events in Bonita Springs where over 20,000 meals were put together in an afternoon. Many of these meals went to children and their families who were not getting school-provided meals because of the summer school break. Since its start in 2007, Meals for Hope has packaged and distributed more than 27 million meals. The upcoming Sanibel/Captiva Islands Realtor® event will be held at the association’s meeting room where we hope to package at least 5,000 meals.
- Heart Walk – January 31 – Realtors® again will participate in this early-2016 fundraiser where the Sanibel/Captiva Heart Walk goal is to raise $50K for the American Heart and American Stroke Associations.
Where to Dine in September?
If you are planning to be on the island next month, remember that is when many of the local restaurants and stores perform their annual housekeeping and repairs, while many employees get well-deserved vacations. Here are a few of the temporary closings that we heard about this week.
- Bleu Rendez-Vous French Bistro – Closes after dinner on tomorrow (8/29) and will be closed the month of September.
- Over Easy Café – Will be closed for just ten days, September 14-24.
- Traders Café & Store – Closes after dinner on tomorrow (8/29) and will be closed most of September (until 9/29). They will, however, be open for dinner the evening of September 28 from 5 to 9 p.m. for the annual Celebrity Island Dinner to benefit The Bailey-Matthews National Shell Museum. Tickets are required, www.shellmuseum.org
Winter-Weary Home Buyers Heading to Florida
“In terms of real estate, the winter of 2014-15 may be the best thing that ever happened…to Florida.
The Sunshine State is No. 2, behind California, in jumbo volume for both primary and secondary homes at Quicken Loans, says Bill Banfield, vice president at Quicken, one of the country’s largest jumbo lenders. “When you have got people who get cold in the wintertime, they start thinking about places they would rather be. And that places Florida at the top of the list,” he says.
“In June, sales of single-family homes were up 19.6% and condo sales 14.6% in Florida compared with a year ago, according to Florida Realtors, the state’s largest trade association for residential real-estate professionals.
“The median home-sale price for single-family homes in Florida is $203,500, well under the $417,000 limit for government-backed loans in all but two counties in the state. Driving jumbo lending are markets like Miami Beach, where conforming loans are capped at $417,000 but the median sale price of a bay-front home is $2.7 million and waterfront estates can reach $40 million.
“At Wells Fargo Home Mortgage, the top metro area in Florida for jumbo lending is Naples-Marco Island, located in Collier County, where the conforming loan limit is $425,000. (The only other county that exceeds the $417,000 limit is Monroe County in the Florida Keys, where conforming loans are capped at $529,000.)
“Other Florida metro areas with high jumbo volume include Miami-Fort Lauderdale-Pompano Beach area (median sales price $295,000), North Port-Bradenton-Sarasota ($245,000), Cape Coral-Fort Myers ($212,250) and Jacksonville ($212,000), says Andre Brooks, Florida regional sales manager for Wells Fargo Home Mortgage, which holds the largest volume of jumbo mortgages in the U.S.
“Lenders say that many borrowers in Florida are retirees moving south or out-of-state residents buying vacation homes. But another big demographic is self-employed entrepreneurs, says Tom Wind, executive vice president of home lending at Jacksonville, Fla.-based EverBank. Small-business owners like the fact that Florida has no state income tax and a business-friendly environment, he adds.
“EverBank also does most of its Florida jumbo lending in the south and southwest coastal regions, with the majority of loans in the $800,000 to $1 million range, Mr. Wind says. “We see a lot of people coming from the Northeast to the east side of Florida, and from the Midwest to the West Coast,” he says.
“Foreign buyers, mostly from France and South America, are also big in the Miami area, where more than half of sales this summer have been cash transactions, says Ines Hegedus-Garcia, an agent with Miami-based RelatedISG International Realty. In hot areas like Miami Beach, home buyers should be prepared for bidding wars and final sale prices above listing prices, she adds. In competitive markets, borrowers are sometimes losing out to cash buyers even when they bid higher.
“Here are a few more tips for Florida jumbo borrowers:
- Higher down payments. While jumbo mortgages typically require a 20% down payment, some Miami sellers will also make that mandatory even when the buyer’s lender has looser requirements, Ms. Hegedus-Garcia says. “The seller wants to see a stronger buyer,” she adds. Many Florida borrowers put down even more, 30% or 40%, on homes in the $1 million range, Mr. Banfield says.
- Cash now, finance later. One way that jumbo borrowers compete with cash buyers is to purchase with cash and then refinance a few months later, Mr. Brooks says. Roughly half of Quicken’s Florida jumbos are refinances, Mr. Banfield says.
- Consider an ARM. About 40% of Wells Fargo’s jumbo mortgages in Florida are adjustable-rate mortgages (ARMs) compared with only 10% of the general mortgage population, Mr. Brooks says. Quicken also sees a lot of ARM borrowers who aren’t quite at retirement but want to buy a second home. They get a jumbo with low rates for the initial five years, for example, then use the proceeds from the eventual sale of their primary home to pay off the ARM before higher rates kick in, Mr. Banfield says.”
Sanibel & Captiva Multiple Listing Service Activity August 21-28
1 new listing: Compass Point #221 2/2 $699K (our listing).
3 price changes: White Caps South #5 1/1 now $520K, Mariner Point #813 2/2 now $549K, Seascape #301 3/3 now $1.139M.
1 new sale: Sundial B408 1/1 listed at $465K.
4 closed sales: Sundial #H302 2/2 $550K, Island Beach Club #P2E 2/2 $720K, Sundial #A301 2/2 $845K, Lighthouse Point #323 3/2 $830K.
No new listings.
1 price change: 1004 Fish Crow Rd 4/3 now $899K.
2 new sales: 580 Chert Ct 2/2 listed at $580K, 2255 Troon Ct 4/5.5 listed at $1.55M.
4 closed sales: 9439 Coventry Ct 2/2 $515K, 1314 Tahiti Dr 2/2 $525K, 1409 Albatross Rd 3/2 $565K, 554 East Rocks Dr 3/2 $680K.
No new listings.
1 price change: 2486 Wulfert Rd now $205,555.
1 new sale: 247+255 Robinwood Cir listed at $229K.
1 closed sale: 9239 Dimmick Dr $133K.
No new listings.
1 price change: Bayside Villas #5310 3/3 now $580K.
1 new sale: Captiva Shores #1A 3/2.5 listed at $1.55M.
1 closed sale: Beach Homes #30 3/2 $2.1M.
1 new listing: 11546/48 Wightman Ln 3/2.5 $3.8M.
1 price change: 11520 Andy Rosse Ln 5/5 now $2.29M.
No new sales.
1 closed sale: 11516 Andy Rosse Ln 6/6 $2.225M.
Nothing to report.
This representation is based, in whole, or in part, on data supplied by the Sanibel & Captiva Islands Association of Realtors® or its Multiple Listing Service. Neither the association nor its MLS guarantees or is in any way responsible for its accuracy. Data maintained by the association or its MLS may not reflect all real estate activity in the market. The information provided represents general real estate activity in the community and does not imply that SanibelSusan Realty Associates is participating or participated in these transactions.
Until next Friday, here’s hoping that Erika heads out to sea & misses Florida completely!
Fingers crossed, Susan Andrews, aka SanibelSusan