Amazing Island Sunsets & Real Estate on Sanibel & Captiva


It is SusanSusan reporting that all is well on sunny Sanibel and Captiva, where a few afternoon and evening showers cropped up this week – pretty typical for August – and resulting in some fabulous sunsets!

2016-08-15 sunset

Yesterday was the Sanibel/Captiva Association of Realtors® monthly membership meeting. More about that below, plus a few other news items followed by the other action posted in the Sanibel & Captiva Islands Multiple Listing Service this week. (It’s not much. The only Sanibel condo sale was a SanibelSusan listing!)

August Membership Meeting Sanibel & Captiva Islands Association of Realtors®

Sanibel realtors logoYesterday at the Realtors® August Breakfast Membership Meeting attendance improved, but was not back to “standing room only” like we see “in season.” With two sales, a new listing, and a price reduction to announce, I felt like I was hogging the mike, but happy to spread the word to colleagues.

FIRPTA Update

The topic discussed during the professional development segment of the meeting was FIRPTA. Speakers were affiliate members Carol McCarley of Nowack & Company (CPAs) (www.NowackMitchellCPA.com) and Julie LePore with FIRPTA Solutions. Below are a few takeaways, but be sure and contact an expert if you have questions.

Sale of U.S. real estate by a foreign person is subject to the FIRPTA (Foreign Investment in Real Property Tax Act of 1980) which authorized the U.S. to tax those individuals.

Buyers purchasing U.S. real estate from foreign persons, certain buyers’ agents, and settlement officers are required to withhold 15% of the amount realized on the sale. (That amount was 10% before February 17, 2016.)

The important thing to note here is that the buyer is responsible for this withholding. That is why during closings, one of the many documents processed is a certificate of non-foreign status. This document is to protect the buyer from liability for the IRS withholding tax which applies if the seller is a foreign person. If the seller is a U.S. citizen or a U.S. resident, FIRPTA does not apply.

If the Seller is not a U.S. citizen or resident, then the buyer is required to withhold 15% of the sale price at the closing. (Here, title companies assist with that.)

Although the taxable gain from the sale is earned by and taxable to the foreign seller, the buyer is held liable for the tax if it is not paid – likely because the seller could be “long gone”.

If the seller is not a U.S. citizen/resident, the next questions are: Does the buyer have plans to use the property as his residence (to reside at the property for at least 50% of the number of days the property is used by anyone during each of the first two 12-month periods following the date of transfer) AND is the sale price less than $300,000? If a buyer answers “yes” to both of these questions, then the transaction is exempt from withholding.

But, if the sales price is more than $300,000 and the seller is a foreign person, then withholding is necessary.

Since it is the buyer, not the seller, who is obligated for withholding and the reporting required by FIRPTA, unless the transaction is exempt from withholding, the buyer must report the sale to the IRS, and pay the required tax withholding, by the 20th day after the closing date or date of transfer. This deadline is extended to the 20th day after the IRS accepts or denies a legitimate application for a “withholding certificate” if the application is filed on or before the transfer date.

In order to complete the appropriate reporting forms or apply for a withholding certificate the foreign person must have a tax identification number (ITIN). We always recommend that if a foreign seller does not already file U.S. taxes and have a tax identification number, they immediately apply for a number when their property is listed for sale.

After receiving that number and prior to the sale, a seller also may apply for a IRS withholding certification to reduce or eliminate the required amount of the withholding. (The IRS is required to act on a request for a withholding certificate within 90 days of receipt of the application.) Once a withholding certificate is granted, the 15% (amount withheld in escrow at closing) may be released to the seller.

The IRS generally grants withholding certificates (so no withholding is required) if 15% of the sale proceeds exceeds the seller’s maximum tax liability.

When in doubt, please consult a tax professional and do it early!

Right of First Refusal vs. Kick Out Clause

Florida Realtors logoSince this same subject just came up with one of our listings, it was timely to see the below article posted on line Tuesday by Florida Realtors® Margy Grant. Friend and fellow New Englander, Margy is Vice President and General Counsel for Florida Realtors®. As she describes a “first refusal” and a “kick-out clause” are very different:

“Given the number of questions we field on the Florida Realtors Legal Hotline about the terms “right of first refusal” and “kick out clause,” it seems time to clear up the confusion. They are often used interchangeably in real estate transactions despite the fact that “right of first refusal” and “kick out clause” are unrelated legal concepts.

“The right of first refusal is a right in a contract that requires a seller to give a third party the chance to match the offer that a buyer has made to buy a piece of property. You often find this provision in Florida condominium governing documents. They give owners in a particular condominium association specific right to purchase units before they are sold to a buyer outside the complex. The right is only triggered after the seller gets an offer on the property, and then usually anyone in the complex who can match the offer may step into the shoes of the buyer who has signed a purchase agreement. The transaction then moves forward with the new buyer. You may also find rights of first refusals in commercial transactions, leases and other residential real estate agreements.

“Kick out clauses are usually reserved for residential real estate transactions. They are designed to provide more protection to a seller if the seller grants a contingency that allows a buyer to cancel the contract if the contingency is not met. Most often a kick out clause is found in an addendum to the contract and addresses the financing contingency or a contingency on the sale of the buyer’s other property. Florida Realtors provides this addendum in the forms library as Rider X of the CR-4 entitled “Kick Out Clause.”

“If this addendum is included in the purchase contract, and the seller opts to enter into a back-up contract, the seller must provide the first buyer with copies of the contract, removing the identity of the other buyer and purchase price. The first buyer then must make an additional deposit of an agreed amount and waive any financing or sale of property contingencies (other contingencies may survive.) If the buyer fails to make an additional deposit or waive the contingencies, then the first purchase contract is terminated, all deposits are refunded to the first buyer and the seller may sell the property to the second buyer.

“If your client is interested in adding a kick out clause, make sure you meet all requirements in the addendum. Also, make sure that if buyer number one does not perform, the back-up contract is successfully converted into a binding agreement. Florida Realtors provides an addendum called the Rider W of the CR-4 entitled “Back-Up Contract” for this purpose.

“We do not recommend sellers sign a second purchase contract unless they are confident they did not accidentally sell the property to two buyers. Without the right addendum, a seller could face damages from one or both buyers. No matter how attractive a second purchase contract is, the seller must first meet the obligations in the first contract.

“Realtors play essential roles in both of these scenarios but should not attempt to counsel buyers and sellers on legal outcomes. In the event of confusion or a dispute, you should advise your sellers and buyers to consult legal counsel.”

“Smart” Home

REALTOR-Magazine_Logo_July-August 2016, “Realtor®” magazine made some excellent points on “smart” technology as it relates to selling homes. Here is a good tidbit:

What is a smart home? The term “smart house” was coined in the 1980’s by the National Association of Home Builders to refer to a home with integrated telephones, lighting, audio, and security. Such systems required special wiring and typically cost tens of thousands of dollars. But the concept has evolved with the proliferation of inexpensive devices than can be operated via smartphone and can make data accessible online. In May, Coldwell Banker Real Estate LLC joined forces with consumer technology news source CNet to define a smart home as “equipped with network-connected products…connected via Wi-Fi, Bluetooth, or similar protocols for controlling, automating, and optimizing functions” of the home. Their definition stipulates that the home has internet access, a smart security or temperature system, and at least two other smart features, such as appliances, entertainment devices, heating or cooling equipment, lighting, landscaping elements, air quality monitors, or thermostats.”

Island Renovations & Closings

August and September are often when many island communities, complexes, and businesses do their big maintenance projects or updates. Sometimes that also is when restaurants take an annual breather too – with staff vacations. Here are a few:

bleu rendezBleu Rendez-Vous French Bistro – is ready to take their summer break. They close beginning August 21 and will reopen for “season” on October 6. www.bleurendezvous.com/

Traders Gulf Coast Grill & Gifts (note their new name) – will take their annual break beginning September 3, reopening October 3 when the Bailey-Matthews National Shell Museum hosts its annual fundraiser, Celebrity Island Dinner. www.tradersgulfcoast-hub.com & www.shellmuseum.org.

Community House logoThe Community House (Sanibel Community Association) – new roof trusses have been going up all week at The Community House. Construction ongoing until early December.

Sand Pointe – all balconies are being restored now. Work is expected to be completed by October 28.

Sandpebble – replacement of the piping in the vertical stacks going to units is scheduled for late September.

Sanibel Moorings – balcony restorations are underway in Buildings 6, 8, and 9. Work is expected to be completed by the end of September. www.SanibelMoorings.com

Sanibel & Captiva Islands Multiple Listing Service Activity August 12-19, 2016

Sanibel

CONDOS

2 new listings: Tennisplace #A35 2/1.5 $319K, Loggerhead Cay #452 2/2 $549K.

No price changes.

1 new sale: Sanibel Moorings #822 2/2 listed at $449K (our listing).

No closed sales.

HOMES

2 new listings: 545 Piedmont Rd 3/2 $695K, 3869 West Gulf Dr 6/7/2 $8.975M.

2 price changes: 998 Beach Rd 3/3 now $899.9K, 526 N Yachtsman Dr 3/2 now $995K.

2 new sales: 1439 Albatross Rd 3/2 listed at $499,994; 1390 Middle Gulf Dr 3/3 listed at $529K.

2 closed sales: 760 Windlass Way 3/3 $924K, 1230 Bay Dr 3/3 $1.38M.

LOTS

2 new listings: 9441 Peaceful Dr $299K (our listing), 976 Whelk Dr $759K.

No price changes, new, or closed sales.

Captiva

CONDOS

No new listings or price changes.

2 new sales: 16163 Captiva Dr 3/2 listed at $2.695M, 1135 Longifolia Ct 4/4.5 listed at $3.995M.

1 closed sale: Captiva Bay Villas #B 3/3.5 $1.705M.

HOMES

1 new listing: 11521 Andy Rosse Ln 7/7.5 $2.999M.

No price changes or new sales.

2 closed sales: 57 Sandpiper Ct 2/2 $830K, 16790 Captiva Dr 5/5 multi-family $5M.

LOTS

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 you see lots of pretty sunsets too!

P.S. & don’t forget to call me if you are thinking of buying/selling real estate on Sanibel or Captiva Islands. Thank you!

Susan Andrews, aka SanibelSusan

2016-08-15 Captiva Sunset

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