Realtor Resolutions – Maybe in 2021

Resolutions are short lived and fade by February.  A goal on the other hand is a dream with a deadline.  – Napoleon Hill.  So when you set your goal, commit to making yourself S.M.A.R.T.E.R.; that is, make your goals Specific, Measurable, Attainable, Realisticand Timed (E.g. done in 4 months).  I interviewed the presidents of both Realtor Associations, a top-notch-pack-the-room real estate instructor, and then offer my own list of 24 goals.

Broward, Palm Beaches, and St. Lucie Realtors President Karen Johnson foresees real estate as the number one driver for Florida’s economy.  Therefore, it is paramount that realtors focus on Professionalism, Integrity, and Excellence (“P.I.E.”).  (1) Answer your phones, (2) Do what you say you are going to do; (3) Look professional; and (4) Update the MLS with Active and Pending Sales promptly as misinformation distorts market data for supply and demand which directly affects pricing.

Miami Association of Realtors’ President Daniel Guerrasays: (1) Understand your market.  Your realtor association offers a lot of good information.  Realtors are attracted to glitz and glamour, but consumers are more interested in knowledge.  Educate yourself with data specifically for the market you are in. (2) In a COVID world find more ways to connect with your prospects.  Reach out to your top prospects by phone, not just by text, or emails.  Call for birthdays.  Go the extra step.

Real Estate Instructor Adam Von Romer.whom I affectionately call “the real estate slayer,” teaches realtors how to be better agents.  (1) “For all those sucked into the internet phenomenon thinking all you have to do is slap something on the internet and it will fall in your lap,” Von Romer offers omens, “If you sit and wait for the phone to ring, you are going to go out of business.”  Don’t fish where everyone is fishing.  Go out and distinguish yourself.  “Social media is part of the solution; it is not the total solution.” (2) Education does not stop the moment you get a real estate license. “You’re not done, this is just the beginning!”   NAR Ethics Rule 11 mandates realtors achieve competency in handling real estate transactions.  “Many don’t strive to take their education to the next level. I’m not talking about satisfying bare minimum bi-annual 14 hour FREC CE requirements; I mean real, practical, experience.”  Good is the enemy of great, and complacency is not an option for Von Romer, who wants to see more realtors get designated as: GRIs (Graduate Realtor Institute), CRS (Certified Residential Specialist), CRB (Certified Real Estate Brokerage Manager).

My Suggested Resolutions and pet peeves:

  1. Get rid of your prom picture and get a new headshot already. I will even help photoshop the first ten (10) I receive.
  2. Take on a new leadership role.
  3. Get a business coach.
  4. Stop pinching pennies. Like a general contractor, surround yourself with a go-to trusted team of highly qualified vendors to get the job done smoothly and without headache (not so subtle hint – LIKE USING US AS YOUR TITLE COMPANY).
  5. Make a video of your intended goals, share it, keep yourself accountable.
  6. Regular contact with your tenants, stimulate buying opportunities.
  7. Enhance your customer experience. How would you rate yourself?
  8. Buyer-Broker Agreements with every prospective buyer, no exceptions.
  9. Hire a transaction coordinator.
  10. My personal pet peeve – When initialing revisions DATE the initials!
  11. Don’t be a secret agent, promote yourself to everyone.
  12. Learn new ways to prospect each month and find out what works.
  13. Take a real estate class a week.
  14. Utilize programs your broker has to make you more efficient.
  15. Get out and get more. Join a non-profit board or organization; trust me it repays you in dividends in more ways than just ROI.
  16. Master Social Media
  17. Start dialing. utilize cold call and CRM programs: LionDeskMojoColeReboGatewayRedXLandVoiceVulcan7Espresso Agent,
  18. If you already have one, then utilize your CRM more effectively.
  19. Post but don’t pester on Social media.
  20. Make more videos.
  21. Expand your sphere of influence.
  22. Try new technologies
  23. Be kind.
  24. Be very patient, this is not an overnight success story, have grit and don’t give up.

REALTOR GIFTS – How do you compare?

Why do business gifts, these spontaneous tokens of unexpected affection work?  Because they make someone feel good?  Create bonds and stronger relationships?  Drive loyalty?  Boost reputations?  Show appreciation?  Reward?  Encourage reciprocity?  Planning and buying gifts is an endeavor. The true task is much more than choosing the right gift.  I had the pleasure of interviewing 46 Realtors offering enlightening and creative ideas.

But before we dive in, I heard a lot of misinformation about the gift giving.  According to tax expert Misty Weinger, CPA “Per tax law, business gifts to clients are only deductible up to $25.00 per client.  Promotion and advertising expenses are not subject to the $25.00 gift limitation. It is important to review with your CPA to determine which category your expenses will qualify.”  So, this does not mean that you cannot give gifts.  The question simply is how much can be deducted as a business expense for tax purposes.

Adam Bursztein – Compass.  Practical and kind, and all-around cool guy. Expect to have something thoughtful and useful from Adam. In addition to cigars and baskets, Adam has purchased washers, and dryers for his clients.  Just watch out you don’t find one of Adam’s pairs of underwear in there.    

Adolfo Gil – Weichert, Miami.  Adolfo runs a non-profit called “Selling Real Estate for a Cure.”  Ten percent (10%) of his commission is donated to a client’s choice of charities.  Certificates are prepared and personally addressed along with a lovely note stating, “If it wasn’t for your sale, this donation could not have happened.”  It pays off because not only do the clients become more aware about the charity, but those at the charitable organizations have also referred clients.  Additionally, he listens to buyers, picking up on what they love.  For instance, for love of his wife, a relenting husband bought a house, despite concerns where he would put his beer with such a small fridge.  A stack of cold beers were promptly delivered to the husband.

Audrey Muller – Keyes, Ft. Lauderdale.  Audrey is super hip but at heart an old sole.  A merry old sole.  Her go to gift re”treats” back in time, framing a historical map of the location, and a cutting board.

Barbara Shapiro – Coldwell Banker, Weston.  The Elipse Vase is a stellar combination of smooth glass and a thin, elliptical shape gives a futuristic sense of style and provide countless decorative possibilities  “I give it because everyone loves it and it displays magnificently, adding to the home.”

Ben Garcia – List Realty. Finds out what clients like throughout the deal. Nicaraguan Cigars and specifically tailored brands of liquor.  If he hasn’t broken the ice, then edible arrangements or a basket.

Ben Moss – Compass.  Compass’ boutique website, accessible exclusively to Compass agents, allows for the perfect array to select client gifts.  Family engraved cutting boards made of cherry wood and marble.

Chip Falkanger – Compass.  Many clients are transplants unfamiliar with the area.  So why not show them a good time?  Along with a gift basket, Chip has been known to give five (5) one hundred dollar ($100.00) gift cards to different restaurants.  Ironically, he even saw a client eating at one of the restaurants, elated to see him, promptly displayed their gift card and said, “this one is on you Chip!”

Chris Brooks – Compass.  In touch with the vibe and emotion of the family, personalizes each gift but for her Brazilian clients, edible arrangements is a completely new and unique concept.  Children love the hand-dipped chocolate covered fruit which come in an assortment of shapes.

Chris Ricci – Re/Max Integrity, Davie.  The Captain of this and President of that, this man is everywhere in the real estate world but is he spreading himself thin?  Chris knows how to give impressionable gifts such as: a spreading knife which says, “Spread the Word;” or a Carving knife etched with “Cut above the Rest.”

Connie Cabral – BHHS EWM, Aventura.  Connie is too hot in the real estate world.  Be ready to soak in the tub with a fine bottle of wine etched with your family’s name on it, and then dry off in white embroidered Egyptian cotton towels and washcloths with your family’s initials.  “Nothing with our company name on it, as I find that tacky.”

Connie Cooper – Connie Cooper Realty.  First thing she does is build a rapport.  Client loved a house but it had no outdoor kitchen.   So Connie delivered a Bar-B-Que with “Willie’s BBQ” engraved on it.  A woman loved to garden was surprised when Connie had a landscaper install a lemon tree in her yard.  No the lemon tree was not engraved.

David Carrion-Levy – Compass, This realtor really knows how to clean up. Roombas, the robotic vacuum cleaners.  “People don’t realize how good they are until they actually have one and it is seen regularly.”  Bottle of Dom Perignon and name engraved baccarat champagne flutes.

Debra Hilsenroth – Coral Shores Realty.  Move over Etsy, Debra is blessed with the gift giving and creating talent.  Making her own baskets better than professionals using shrink wrap and heat guns, you will love her love.  Moscow mules, copper mugs, mint filled, limes, vodka, dog treats, crystal bowls, picture frames, who knows what goodies you will get?

Denise Rubin – Coldwell Banker, Aventura.  Who does not know Denise?  Well you also won’t be able to forget her, as she likes to give .  Stylish and compact, welcome people over and show off your new home with a trillium engraved bamboo cutting board in the shape of a home, champagne with her logo, door knockers, and display books about Miami.

Desiree Avila – Charles Rutenberg Realty, Ft. Lauderdale.  Care to share a pint at the local pub?In addition to receiving a photography session from a professional photographer of your new home and family, enjoy artesian spirits crafted by a local distillery right in Oakland Park from Chainbridge Distillery. Just make sure you take your photos before you partake in the spirits, or not.

Diana Escobar – United Realty, Plantation.  Recalls placing golfers in a home located on a golf-course.  A golf basket with balls, gloves, outfits, and an entire package was a natural fit for this couple.

Edward Boateng – Keller Williams, Coral Springs.  Not everyone is fortuitous enough to have their own live-in gift designer and you will not find gifts like these anywhere else.  Wife, Alicia Boateng, has been featured on Channel 7’s Deco Drive for her inspiring designs and gifts.  Clients can expect inscribed bold and gold handmade keychains adorning the words, “It’s so good to be home.”   “We want our clients to remember us as they enter and leave the home and we feel this keychain is a good reminder.” Tributing women as beautiful, strong, and influential, the “Afro Glam Series” is a collection of cups, mugs, tumblers and ornaments that pop and one-of-a-kind!

Emel Onur – Lead Realty, Boca Raton.   Catering to international Turkish clients, blesses the home with protection from jealousy or bad feelings, by gifting a Nazarboncuk (evil eye in Turkish) but in the shape of a home.  Meaningful to her clients, this gift cannot be duplicated here, as it is designed, crafted, and purchased by Emel on her regular visits to motherland Turkey.

Eric Manten – Silmar Realty, North Miami Beach.  If I ever lit anything on fire this expensive, I would be arrested for arson.  Who knew $400 candles existed?  Eric’s response, “but they smell so good.”  And it is understandable, we have all been swept back to a moment in our lives after perhaps smelling the nectar of a sweet perfume, the beach’s air, a campfire, popcorn, a sharpened pencil.  Well Eric wants to be remembered and indelibly will be burned into his client’s brain.  Check out Diptqyue’s French candles and home décor.

Erica Stowers – Florida Luxurious Properties.  Picture this,  No literally, a picture book of the house being sold was presented to a woman who was just emotionally detached from her home when it sold (albeit for a record price) after 30 years of memories.

Gina Tarr – One Sotheby’s, Las Olas.  This I have never seen before, and it is so simple but so elegant, and all I can say is I want one.  Pineapples appear on all sorts of décor, from door knockers to quilts. “The fruit symbolizes the intangible assets we appreciate in a home: warmth, welcome, friendship and hospitality,” says Gina.  Champagne and chocolates are symbols of celebration, special occasions, love, and romance.  Gina combines it by selecting the finest champagne, hot gluing Ferrero Rocher Chocolates around, fountain into a green stem.  This is my kind of healthy fruit treat.

Ilana Gross – Level Realty Partners, Ft. Lauderdale.  Artsy at heartsy, Ilana loves to present clients with art from Galleries.  When people ask “Oh Wow! Where did you get that?” her clients naturally respond “Oh, my realtor.”  A client who lost her cat received a portrait of the cat.  A Jewish couple may receive a Mezuzah, Birkat Habayit ( A blessing over the house), and/or a Hanukkiah like none other.  “They have to be conversation pieces.”

Jeanette Pressman – Dezer Platinum.  A fish out of water, got her feet wet in real estate and now hosts open houses by stocking the pool with real-live mermaids.  A creature of the sea, and a concerned for safety, gives swimming lessons to children in homes with a pool.

Joel Matus – William’s Island Realty, Aventura.  Reminds us “Don’t think of giving a gift as a chore. And don’t get it done just for the sake of getting it done.”  Whatever the gift may be, which her personalizes for every client, “the presentation of the gift together with the packaging is just as important.”  Joel enjoys personally delivering each-and-every gift himself.  If he is not at his exclusive brokerage inside William’s Island, or at the club, you will probably find him in Aventura Mall on the 3rd floor of Bloomingdales selecting just the right gift, tailored for each special client.  He also likes to use Reservebar.com to engrave high end MacCallan, Tequila, or Champagne bottles, which hare enveloped in embroidered Williams Island: robes, slippers, and monogrammed soaps and bubble bath salts.

Kim Hackett – Compass.  The best part of waking up is to a Kim Hackett present.  Jura espresso machines,  are the finest aromatic, fully automated, specialty coffee machine and are simply stunning.  It is like parking a Ferrari (or cappuccino) in your garage, so make sure you have the home to match so Kim can freshly grind this luxury item for you.

Lara Orlanis – Exclusively Baronoff Realty, Sunny Isles Beach.  Developer’s models look amazing because they are decorated with coffee table books.  Depending on client interests, Lara buys Coffee table books about fashion, art, racing cars.  “I think books are more valuable because, they are always out, and you have it forever.”

Larry Genet – CBRE, Las Olas.  Winner of the legend & leaders community award, and seen on social media and video more than a George Foreman grill, he is everywhere.   I bow to you sir.  Expect a crystal award with a floating picture of the acquired building or shopping center.  But the genius of Larry comes in when he hosts an annual dinner and allows all his high-net-worth clients to socialize, meet each other, and recapture some of that commission they paid him.  I would love to get on that exclusive list; as soon as a I have $10M+ to buy commercial Larry.

Laurie Richter-Spector – Compass.  Personally selects hand made cutting boards.  A client liked sage so much, Laurie hand-created an entire sage basket dawning Sage: recipes, candles, aromas, herbs, soaps, syrup, swag, scrubs, infused honey, and oils.  Somethings you just cannot buy off the shelf.  Non-residents have also received gift certificates to great local restaurants allowing them to get to know the area. How refreshing Laurie!

Lenzel Davis – One Sotheby’s, Coral Gables.  Always the stylish one who turns heads in a room, founded his own shoe company, Machiko, known for their bespoke Italian designs.  Be prepared to step into your luxury home with your new hand crafted shoes, custom measured to your foot.  This man is charming, so don’t be surprised when he also presents you with your favorite songs, on today’s equivalent of a mix-tape, as he harnesses his radio talents when he used to work as an electric engineering for some of our favorite radio stations.

Linda Seitel – One Sotheby’s, Las Olas.  What resonates with clients is something personal to them.  Recalling one especially strifeful transaction, and we have all had them, Linda hysterically assembled a basket of wines based on the wines’ names like: Tension; Conundrum; Freak Show; etc…  She has the best smile, so I’m glad she could keep her sense of humor.

Lori St John – Keller Williams Partners, Plantation.  Reminds us that it is not just a house that is being sold; but memories, which can be very emotional.   Sometimes, I think that it may be even more emotional for Lori because she invests so much of herself into learning all about the house, down to the studs, and the accretion of the beaches.  Lori featured a home on the cover of a magazine and had it framed, another was painted in watercolors by an artist, and the most unusual has to be the 3-D models replicating the home with a sterling silver tab identifying the family.  Additionally, Lori listens to her clients and family is very important to her.  So she has given fun gifts like private family trips or the Miami Zoo.

Lucy & Eduardo Cofresi – Dezer Platinum / Armani Residences, Sunny Isles Beach.  This power couple have been my friends for almost 20 years, and rose to the top, being sought after by developers to sell out their buildings like the Porsche building and now the Armani.  Armani has broadened their brand into home and décor under Armani/Casa.  Expect to be presented with a unique accent piece from the designer. At the Porsche building it is Porsche glasses, belts, and other designer accoutrements.  Brand names are collected by their clients so why not add to the collection?  Open up a matching Gucci, Channel, LV, wallet and purse.  If you don’t like it then you can easily exchange it.  For that reason, they do not give spa certificates at the buildings because many of their clients have their own people, give the certificates away, or never use them.

LysandraDevonaand Romina Wu – Luxe, Coral Gables.  Super as three (3), this family of Avengers combine to give the ultimate attention to their clients, and their gifting is no different.  Using a cricket machine they personalize pillows, portraits, and coasters, and capture that moment by chronicling the closing, familial surname, and address.  “Ring doorbells have been given too, but where’s the fun in that?”

Matt Weiner – Laurie Finkelstein Reader Realty, Plantation.   Just to say his name makes you smile and want to party, both of which I have done with this guy.  I can’t keep up.  So get ready to have fun, as Matt caters a house warming party for 20 of your closest friends and even handles the invite, and photographer of the party and even the family for a before and after party shoot.

Meryl Koslow – One Sotheby’s, Las Olas.  Enough said when that impressionable “Tiffany Blue” box arrives at your door.  Did you know that color was used on Tiffany’s Blue book first published in 1845?  Toast your new purchase with Tiffany champagne flutes, and two (2) bottles of Napa Valley’s Caymus.  Touched by a family member suffering with Alzheimer’s, and wanting to make a difference, Meryl made a sizeable charitable donation.

Michael & Wendy Ledwitz – Engel & Volkers, Boca Raton.  Living in the Polo Club, Michael and Wendy have catapulted into being the number one (#1) realtors at Boca Raton’s Polo Club.  But “the Club” is much more than their office.  It is their community.  “It is important to get to know clients, but it is even more important to make wonderful friends.  Living at the Polo Club allows us to expand our friendships every day.”  Michael and Wendy can be found dining with their new found friends, whether it be at the Club’s elegant Crown Room or SteepleChase.

Michele Tabb – Compass.  Looking for that special something?  Michele’s secret helper is Chef Mom, with an bevy of uniquely styled kitchenware, tableware, blankets, pillows, candles, totes, décor, and more.  She has also found, what I call “Michele’s Picks,” that her laminated list of favorite restaurants and necessities have drawn the most attention and gratitude.

Nana Rezaie – Keller Williams, Wellington.  One gift that never leaves your site, because it is too heavy, is the Breville Smart Oven Air, which includes 13 baking and roasting features including warming, dehydrating, air frying, and super convection.   I don’t know how I ever lived without mine; this is truly a fantastic gift.

Nicki Riettie – Douglas Elliman, Las Olas.  Known for being tres chic, after moving in a professional photographer will show at your home for a 2 hour session and present you with a large frameless photograph of the happy family in their new home.

Regina Vasquez – Coldwell Banker, Aventura.  Stylish and compact, welcome people over and show off your new home with a trillium engraved bamboo cutting board, chocolates wrapped in gold, and an invaluable kitchen gadget like Cutco’s super shears.

Robyn Selner – Coldwell Banker, Weston.  As a professional and a mom, Robyn has an eye for detail and will incorporate the playfulness of Romero Britto into your home.  It could be his artwork of children playing, a colorful house, a functional lighting fixture, or something that just speaks to her client.

Scott Kaplan – Re/Max Realty Associates.     Learned his lesson that oak cutting boards required too much maintenance and may only be brought out on special occasions, shifted his gift giving to practicality, with a reusable and recyclable Publix bag, beach towels, Turvis tumblers, golf sized umbrella, Chapstick, jar opener, and other everyday useable items.

Sherri Pfefer & Megan Pfefer – Coldwell Banker, Las Olas.  Known for their humor and always keeping it “Pfresh,” especially in the kitchen who knows what homebaked good may rise?  Prada and Gucci key chains help the clients arrive to their house. Home warranties, with notices from the warranty company, allow them to follow up and keep in touch with their clients should any appliance fail.  And coasters designed on Shutterfly, transition images of old into the new house so, clients see where they came from and how far they’ve come.

William Webb III – Webb & Associates, Hollywood.  Don’t mess with Bill.  With him, your first cleaning from a maid service will be provided by him.  And today, he has even added a COVID cleaning prior to moving in.

Zachary Oppenheim – Oppenheim Realty, Ft. Lauderdale.  Every client comes with a story, and Zachary helps write it by adding in details.  It could be a knife block for a couple that just got engaged yet to share the same last name, or a Publix card with a note to enjoy their first family meal courtesy of Oppenheim Realty.  Ever so stylish, he has created a demand for his clothing, so coming soon is an online boutique where each client will be given a gift certificate to buy swag and merch.

DISCLAIMER:  Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney. FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

REAL ESTATE’S 2020 LEGISLATIVE CHANGES

Senate Resolution 1008 “Great American Realtor Days is designated for February 3-5, “in recognition of the outstanding services realtors provide to residents and visitors of the state and the critical contribution they make to the state economy.” Finding teal estate represents 21.9% of Florida’s gross state product.

Fla. Stat. §40.013. Excuse Me? Jury Duty. Excuses from jury service 18-21 year old full-time-students.

Fla. Stat. §83.5615 Tenant Protection from Foreclosures. Prohibiting buyers of foreclosed properties from terminating bona fide residential leases without first providing the tenants with a 90-day notice to vacate (unless federal law requires more time).

Fla. Stat. §193.155 Homestead Portability. In the 2021 tax roll, increases timeframe which accrued benefits on homestead property tax assessments may be transferred from a prior homestead to a new homestead from 2 years to 3 years.

Fla. Stat. §196.082Ad Valorem Tax Reduction for Disabled Veteran’s Surviving Spouse. So long as the surviving spouse does not remarry, the ad valorem tax discount will be extended to surviving spouse, also allows for the discount to be ported over to surviving spouse’s new residence.

Fla. Stat. §§ 420.621-420.6275 Homelessness. Redefining homelessness as “An individual or family who lacks a fixed, regular, and adequate nighttime residence … or who will imminently lose their primary nighttime residence ….” Adds prohibition on excluding based on race, color, national origin, sex, handicap, familial status, or religion.

Fla. Stat. §§ 455.213, 489.115. Reciprocity for Out-Of-State Contractors. Opens up ability to get Florida construction license for those who held a valid and current contracting license for at least 10 years issued by another U.S. state.

Fla. Stat. §455.2278DBPR Licensure and Student Loans. Eliminating license suspensions or revocation based on student loan default or delinquencies.

Fla. Stat. §§ 456.072, 460.27, 760.22, 817.265 False use of Emotional Support Animals (“ESA”), Criminalizing, Disabilities. Word “Handicap” is no longer used, replace with “Disability.” Disciplining health care professionals if without personal knowledge they state a person is disabled or needs an emotional support animal (“ESA”). Makes it a 2nd degree misdemeanor and requires 30 hours of community service, if a person misrepresents they have a disability or disability-related need for an ESA. Makes persons with ESAs liable for damages caused by their ESA. Unless federally prohibited, housing providers:

  • May, require proof of licensing and vaccination of the ESA.
  • May, deny an ESA if it (1) poses a direct threat to safety or health of others; (2) physical damage to other’s property; and the threat cannot e reduced or eliminated by another reasonable accommodation.
  • May, If the disability is not readily apparent, request reliable information reasonably supporting the person’s disability like:

(1) Determination from the government,

(2) Disability benefits or services from the government,

(3) Proof of eligibility for housing assistance or housing voucher due to disability,

(4) Information from a health care or telehealth provider,

(5) Information identifying the particular assistance or therapeutic emotional support provided by the animal.

(6) Animal registrations of any kind (i.e. ID card, patch, certificate, or internet registration) by themselves are insufficient to reliably establish a person’s disability or need for an ESA.

  • May NOT, request information disclosing diagnosis or severity of a person’s disability
  • May NOT, request medical records relating to the disability
  • May NOT, require the use of a specific form or notarized statement
  • May NOT, discriminate in housing against persons with disabilities or needs for an ESA.
  • May NOT charge extra for an ESA.

Fla. Stat. §481.209Interior Designer Licensure. Eases the requirements for becoming a registered interior designer and obtaining a seal.

Fla. Stat. §489.103. Handyman licensure exception. Raises from $1,000 to $2,500, the exemption from licensure as a contractor. Doesn’t apply if work is part of a larger operation undertaken by the same or a different contractor.

Fla. Stat. §501.2106 Deceptive Legal Advertising. Solicitations for legal services directed to the public must clearly and conspicuously state “This is a paid advertisement for legal services”; Disclose the sponsor of the advertisement; Disclose the attorney or law firm who will represent persons responding to the advertisement or how those persons will be referred if the sponsor will not represent the persons; cannot imply it is a consumer alert or public service announcement; display logos or similar thereof implying affiliation with a government agency.

Fla. Stat. §613.57 Increases Property Insurance Requirements for Associations. Increases coverage for property insurance claims by a condo, co-op, or HOA under Florida’s Insurance Guaranty Association (FIGA) from $100,000 to $200,000 multiplied by the number of units.

Fla. Stat. §689.01Eliminates 2 Witness Requirement for Leases. “[N]o subscribing witnesses shall be required for a lease of real property or any such instrument pertaining to a lease of real property.”

Fla. Stat. §689.041Curing Scrivener’s Errors in deeds. Correcting an erroneous deed can be costly and time-consuming, as such action requires either tracking down the original grantor and getting the grantor to file a corrective deed or bringing a lawsuit in court for deed reformation. Now a single error or omission of: a lot or block; unit, building or phase number for condos or co-ops; a directional designation; or a fraction in the section township or range, can be fixed by recording a “curative notice” of the erroneous deed.

Fla. Stat. §712.05 Voids Discriminatory Restrictions in Property Records. Declaring “discriminatory restrictions” (meaning restrictions on an individual’s ownership, occupancy, or use of real property based on their race, color, national origin, religion, gender, physical disability, or other protected class) found within recorded title transactions (e.g. deeds, easements, condo docs) null and void.

Florida Chapter 714Adopts the Uniform Commercial Real Estate Receivership Act (UCRERA): A receiver is a person appointed by a court to take possession of another’s property and to “receive, collect, care for, and dispose of the property or [its] fruits.” In some instances, a receiver’s appointment (“receivership”) is governed by Florida statute. In other cases, such as receiverships for commercial real estate, a receiver is appointed under the court’s equity powers (“equitable receivership”). The Uniform Commercial Real Estate Receivership Act (UCRERA), adopted by seven states since 2017, specifies the circumstances under which a receiver may be appointed for commercial real estate, the scope of such a receivership proceeding, and the receiver’s powers, duties, and liabilities.

Fla. Stat. §§ 718.129, 719.131, 720.318Curbs Law Enforcement Parking Restrictions at HOAs. Condos, Co-Ops, and HOAs may not treat law enforcement vehicles as commercial vehicles, and may not prohibit them from parking in an area where the unit owner, or its tenant, guest, or invitee has a right to park.

Fla. Stat. §760.34 Private Lawsuits for Housing Discrimination. No more waiting and having to exhaust administrative remedies. Housing discrimination lawsuits alleging violations of the Florida’s Fair Housing Act (“FFHA”) may now be immediately filed in court without having to be first presented to Florida Agencies like the Florida Commission on Human Relations and waiting for their outcome.

Fla. Stat. §791.08 Fireworks and HOAs. HOAs may not prohibit homeowner’s from using fireworks on December 31st (New Year’s Eve), January 1st (New Year’s Day), or July 4th (Independence Day).

DISCLAIMER:  Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney. FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

How to Protect Real Estate Buyers During Hurricane Season

We know major storms come, so how should realtors and practitioners in disaster prone areas prepare to minimize disruptions in their transactions? According to the National Hurricane Center, Florida’s hurricane season runs from June 1st to November 30th. Facebook also likes to remind me with pop-ups, that for the past 4 years during the exact same week, my family and I have had to prepare for a major storm. Suffice it to say, hurricanes are here to stay.

Property Insurance considerations. As a precondition to loaning money to buy property lenders generally require borrowers to purchase a property insurance policy with 100% Replacement Cost Value (RCV). Watch out because insurers are supposed to offer RCV policies with a “Law and Ordinance” endorsement which: (1) do not include costs necessary to meet applicable laws and ordinances regulating the construction, use, or repair of any property or requiring the tearing down of any property, including the costs of removing debris in the aftermath of a loss; and (2) does include such costs. However, if the insurer does not obtain the policyholder’s written rejection of both coverage options (1) and (2), “any policy covering the dwelling is deemed to include the law and ordinance coverage limited to 25 percent of the dwelling limit.” See, Fla. Stat. §627.7011(1)(a)-(b).

Claims for: Hurricane Michael (10/2018) averaged $57,754, Hurricane Florence (09/2018) $47,138, and Hurricane Harvey (08/2017) $116,823. Hurricane deductibles can be 2%, 5% or 10% of an insurance policy. See, Fla. Stat. §627.701(3)(a). Look for an insurance company that gives an accurate RCV, without over-insuring the property. It’s counterintuitive but, more insurance could mean less coverage for repairs. Consider this scenario, a property costs $1M to purchase, but the insurance agent offers coverage at $1.5M with a 2% deductible. The agent then explains that it will cost more to rebuild (regardless of your purchase price) and that is why the estimate is for $1.5M. First, when buying property, your purchase price included the land and maybe a pool – which generally isn’t going anywhere absent complete Armageddon. So when your agent calculates an RCV, speak to them about how they came up with their RCV estimation. Second think about if you had $60K in damages, the deductible on a $1M Property with a 2% deductible would only be $20K; but if the property were over-insured at $1.5M that deductible would kick up to $30K before any insurance dollars were paid out, meaning less money for the insured. So more insurance can be counter-productive.

Flood Insurance considerations. Flood Insurance is separate from property insuranceeven if hurricane winds and rain caused the flood to occur. The term “flood” includes, “The unusual and rapid accumulation or runoff of surface waters from any source.” Properties in high-risk flood areas with mortgages from federally regulated or insured lenders must have flood insurance (and there is no 30 day waiting period). In moderate/low risk flood areas, lenders may require flood insurance. But if there is no lender at all (e.g. cash buyer) or the lender is a Non-FDIC insured lender (e.g. private) and flood insurance is requested, then prepare to wait because there is a 30 day waiting period imposed by the NFIP (National Flood Insurance Program). As a work around, a buyer can purchase private flood insurance company (i.e. not NFIP backed) or have the seller transfer their existing flood insurance to the buyer. If you don’t have coverage and a storm hits, you may not get federal assistance through FEMA unless the event is declared a federal emergency and even then, post-disaster grants averaged less than $10,000.

Be diligent, when a storm is imminent insurers impose a binding moratorium and will not write new insurance policies, making it impossible to get a loan. Therefore, during storm season it is advisable to have the insurance agent “bind” coverage as soon as possible but postpone the effective date the insurance policy goes into effect until the closing date.

Lender/Mortgage Considerations. Lenders and insurers may elect to re-inspect or re-appraise property for storm damage and can charge their borrowers to re-value the property (i.e. the collateral), and cause delays. Further, if the new cost is bundled into the loan (as opposed to being paid outside of closing), then the Loan Estimate would need to change triggering a new 3 day waiting period under TRID. Moreover, interest rate locks may expire during a storm and cost more money to extend. Admirably, we know some awesome mortgage brokers have chosen to eat these cost for their borrowers.

As-IS Contractual Considerations. While the “As-Is Residential Contract For Sale And Purchase” may have a time-is-of-the-essence clause it specifically addresses casualties, losses, and force majeures in varying ways.

In the event of a disruption due to a force majeure, Section 18G allows for all time periods (not just the closing date) to be “extended a reasonable time up to 7 days after the Force Majeure no longer prevents performance under this Contract.” It may surprise you to learn that the term “force majeure” broadly includes any extreme weather, act of God, or unusual transportation delays which, by exercise of reasonable diligent effort, the non-performing party is unable in whole or in part to prevent or overcome. Could a force majeure include an intervening cancelled flight, a death, fed-ex’s failure to transport required documents? If a delay due to a force majeure arises anytime during the course of a contract (not just on the deadline) the parties should promptly provide the other party with a description of the delay, what was done to lessen the delay, the time adjustments needed.  But extensions are not indefinite. Force Majeures that push the closing date more than 30 days allow either party to cancel the Contract without penalty.

18.G. FORCE MAJEURE: Buyer or Seller shall not be required to perform any obligation under this Contract or be liable to each other for damages so long as performance or non-performance of the obligation, or the availability of services, insurance or required approvals essential to Closing, is disrupted, delayed, caused or prevented by Force Majeure. “Force Majeure” means: hurricanes, floods, extreme weather, earthquakes, fire, or other acts of God, unusual transportation delays, or wars, insurrections, or acts of terrorism, which, by exercise of reasonable diligent effort, the non-performing party is unable in whole or in part to prevent or overcome. All time periods, including Closing Date, will be extended a reasonable time up to 7 days after the Force Majeure no longer prevents performance under this Contract, provided, however, if such Force Majeure continues to prevent performance under this Contract more than 30 days beyond Closing Date, then either party may terminate this Contract by delivering written notice to the other and the Deposit shall be refunded to Buyer, thereby releasing Buyer and Seller from all further obligations under this Contract.”

Typically a due diligence period is around 7 to 15 days; however, Section 10G of the As-IS addresses Flood Insurance by providing 20 days (unless changed) to cancel the contract if the buyer discovers that for insurance purposes the property is “below minimum flood elevation or is ineligible for flood insurance coverage.”

(d) FLOOD ZONE; ELEVATION CERTIFICATION: Buyer is advised to verify by elevation certificate which flood zone the Property is in, whether flood insurance is required by Buyer’s lender, and what restrictions apply to improving the Property and rebuilding in the event of casualty. If Property is in a “Special Flood Hazard Area” or “Coastal Barrier Resources Act” designated area or otherwise protected area identified by the U.S. Fish and Wildlife Service under the Coastal Barrier Resources Act and the lowest floor elevation for the building(s) and/or flood insurance rating purposes is below minimum flood elevation or is ineligible for flood insurance coverage through the National Flood Insurance Program or private flood insurance as defined in 42 U.S.C. §4012a, Buyer may terminate this Contract by delivering written notice to Seller within _____ (if left blank, then 20) days after Effective Date, and Buyer shall be refunded the Deposit thereby releasing Buyer and Seller from all further obligations under this Contract, failing which Buyer accepts existing elevation of buildings and flood zone designation of Property. The National Flood Insurance Program may assess additional fees or adjust premiums for pre-Flood Insurance Rate Map (pre-FIRM) non-primary structures (residential structures in which the insured or spouse does not reside for at least 50% of the year) and an elevation certificate may be required for actuarial rating.”

Maintaining the property and Casualties are addressed in Section 11 and Section 18M of the As-IS. Sellers are generally required to maintain the property, pool, and landscaping excepting ordinary wear and tear. But in the event of a “Casualty Loss” including from a severe storm or fire which occurs prior to closing, the Seller could be liable for repair costs up to 1.5% of the Purchase Price. If the costs exceed 1.5% then the Buyer can cancel without penalty or take the 1.5% and close as-is.

11. PROPERTY MAINTENANCE: Except for ordinary wear and tear and Casualty Loss, Seller shall maintain the Property, including, but not limited to, lawn, shrubbery, and pool, in the condition existing as of Effective Date (“AS IS Maintenance Requirement”).”

18.M. RISK OF LOSS: If, after Effective Date, but before Closing, Property is damaged by fire or other casualty (“Casualty Loss”) and cost of restoration (which shall include cost of pruning or removing damaged trees) does not exceed 1.5% of Purchase Price, cost of restoration shall be an obligation of Seller and Closing shall proceed pursuant to terms of this Contract. If restoration is not completed as of Closing, a sum equal to 125% of estimated cost to complete restoration (not to exceed 1.5% of Purchase Price) will be escrowed at Closing. If actual cost of restoration exceeds escrowed amount, Seller shall pay such actual costs (but, not in excess of 1.5% of Purchase Price). Any unused portion of escrowed amount shall be returned to Seller. If cost of restoration exceeds 1.5% of Purchase Price, Buyer shall elect to either take Property “as is” together with the 1.5%, or receive a refund of the Deposit thereby releasing Buyer and Seller from all further obligations under this Contract. Seller’s sole obligation with respect to tree damage by casualty or other natural occurrence shall be cost of pruning or removal.”

DISCLAIMER: Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney. FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

How to Get offers accepted in a Hot Market – 28 Secret Weapons

In a hot market with low inventory, meaning there is a glut of available properties for buyers to purchase, when something comes on the market; you have to be lighting-fast and come out with guns blazing a strong offer!! Sellers are receiving multiple offers at-and-above asking price, the market is highly competitive, and you need your offer to stand out. So how do you get to yes? Here are some ideas categorized by the: (1) Kindness Approach; and (2) Economically Strategic Approach; on how to get your buyers’ offers accepted:

I. KINDNESS APPROACH:

1. This sounds hokey but I am starting with this as my number one (#1). Call and build a rapport with the listing agent and ask what terms are most important for the seller. I’ve heard about a listing agent receiving seven (7) offers one weekend but only heard from two (2) before or after receiving their offers.

2. Present the offer in person or (nowadays) virtually via zoom. Let them know it will only take a few minutes, and you are bringing them a very nice offer that you know the seller and they will be excited to see! It will only take no more than 5 minutes of their time ?.

3. Video the buyers (in front of the house) as to why they love the house.

4. Pay very close attention to seller’s personal collections and family pictures. After touring the house, buyer notices a Miami Heat poster in the kid’s room and a vacation picture at Disney. Buyer sends Disney tickets and a signed Heat Jersey.

5. Look up the Sellers. Find out what sellers are involved in and make $500.00 payment to charity of their choice.

6. Picture drawn by the kids of the house.

7. Hand signed letter from the heart, identify what you love, honored if chosen, and a promise to take care of it.

“I had the pleasure of touring your home and fell in love with the possibility of one day living here. I think it would be the perfect home to raise my children in, and they were excited to have a place that we can finally call home. I want the best for my children. I would like to move to ______ so I can surround them with diversity, culture, and education they deserve. I would love more than anything to have a stable home for them to always come home to. Please consider accepting my offer. Thank you for your kind consideration, /s/ Signature.

8. Uber eats personally delivers the offer.

II. ECONOMICALLY STRATEGIC APPROACH:

9. Nonrefundable deposit up to $1,000.00 to be immediately released to Seller, but credited to buyer if deal closes.

10. Put down a higher (e.g. double) earnest money deposit.

11. Show proof of funds (whether cash buyer or not).

12. Shorten closing date to 2 weeks.

13. Shorten closing date to 2 weeks BUT, add Post-Occupancy Agreement for Seller to stay at $0.00.

14. Shorten closing date to 2 weeks BUT, for every day thereafter buyer pays non-refundable extension fee of $______/day to be released from buyer’s deposit to seller, and which, if the property closes, is either: [_] in addition to the sales price; or [_] goes towards the sales price. If the property does not close within ____ days from the effective date, then allow either the seller or buyer to cancel but preserving seller’s obligation to pay the extension fee.

15. Pre-Approval Letters from buyer’s lender and indicating that buyer already has provided all of their check stubs, bank statements, tax returns to get the process started. Be proactive and show you may be able to close sooner than the standard 30-45 days.

16. Shorten inspection period.

17. Limited inspection rights. Notwithstanding buyer’s inspection rights, buyer waives the first $4,000.00 of inspection issues.

18. Waiving inspection entirely (extremely dangerous and not recommended unless gutting/demolishing the structure or buyer previously inspected).

19. Buyer pays seller’s prorations (e.g. taxes, HOA maintenance).

20. Buyer pays maintenance, landscaping, pool, and utilities from time of acceptance until closing.

21. Pay seller’s moving costs (with a cap).

22. Pay typical seller costs (with a cap) like:

(1) Doc Stamps + surtax on the deed;

(2) Seller’s Settlement Fee (e.g. to prepare their closing documents charged by their attorney or title company)

(3) HOA estoppel fees (if any);

(4) Title search (if SELLER’S Box is Checked or the Miami-Dade/Broward Regional Provision is Checked under Article 9),

(5) Municipal lien search (if SELLER’S Box is Checked or the Miami-Dade/Broward Regional Provision is Checked under Article 9),

(6) Owner’s title policy (if SELLER’S Box under Article 9)

23. Buyer pays commissions.

24. Cooperating broker (buyer’s sales agent) gives back 0.50% commission. Buyer separately agrees to reimburse Cooperating Broker 0.5%

25. If does not appraise, Buyer will pay the difference.

26. If the appraised value comes in below the contract price, the buyer agrees to pay $____ above the appraised value, not to exceed the contract price.

27. Escalation Clauses allow buyers to get another bite-at-the-apple and insures they are the highest bidder. The problem with giving a “Highest and Best,” “Final Offer,” “Take it or Leave it!” is that it leaves no room to negotiate. These can be quite useful in multiple offer scenarios. An escalation clause states that the buyer will pay a certain amount of money above the highest offer the seller receives. It generally includes a ceiling cap to make sure the buyer doesn’t agree to pay more money than they can afford. Now whether the no cap matters or not, may not make a difference if a buyer can simply cancel under the inspection period anyway.

Advantages: (1) It’s an attention grabber; (2) Seller could cross out the escalation clause and counter with buyer’s highest bid (See disadvantages); but who cares? The Buyer got what it was willing to spend anyway; (3) Seller may perceive the buyer as the most desirous to have the home; (4) If you think a listing agent is lying (I know it never happens) about having multiple offers. No Buyer’s remorse after losing deal thinking, “I wonder what would have happened if I just had the opportunity to offer $5,000 more?” At today’s 30 year fixed mortgage interest rates, a $10,000 increased would only amount to a little over $40.00 month. Accord.BankRate.com.

Disadvantages: (1) Upsetting a seller into thinking you’re playing games. If you can offer +$5,000 then just include that in your hard offer; (2) It’s only an offer so Seller could cross out Buyer’s escalation clause and counter with your highest bid [in fact – expect this]. (3) Seller may reject and say just give me your highest and best offer; (4) Some sellers don’t like it because the buyer isn’t putting their best foot forward and are not competing fairly (I only heard one example of this); (5) Frustrating and offending the Seller with gamesmanship – “Hey I am offering X but I am really willing to pay up to Y.”; (6) In some states like TX they are not allowed so check with your local ethics Board, FREC, and attorney.

Examples:

Credit: Lifestyle International Realtor Livan Bec. Jr.

28. Kick-Out-Clause / Right-of-First Refusal. What a terrible term! I prefer Right-of-First-Refusal. When a seller receives a weak or low offer or one full of contingencies with terms less optimal than seller hoped for, this is an attractive alternative to bridge the gap and keep things moving. The way it works is, if another buyer comes along and makes an offer, the original buyer is given 24-72 hours to either meet or beat the new offer or receive their deposit back. Form Simplicity has two (2) forms which serve as examples: (1) CR-5x_X. Kick Out Clause; and (2) CRSP16.E.backup kickout addendum. * Note this concept is different from a back-up-offer which would allow a 2nd offer to put down a deposit and then move into 1st position if the original offer is terminated and falls through.

Another scenario is if the Seller insists their Fair Market Value is $600,000, but your research shows it is overpriced, and a fair estimate would be $500,000. Make an offer with a 60 day kick out clause. This essentially says I am so confident my offer is fair that I am willing to bet you won’t find a better deal out there.

DISCLAIMER: Topics discussed are general concepts, not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney.   FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

How the CFPB Protects Buyers in Real Estate. Common Questions Answered.

History of the CFPB. It started with professor Elizabeth Warren, who taught and specialized in bankruptcy. Yes, the same Elizabeth Warren who became a US Senator and sought the Democratic nomination for President. She called for the creation of a new independent federal agency to focus on regulating consumer financial products targeted at American households like credit cards and mortgages to name a few.[1]   Her goal was to: move away from legal jargon, be more coherent and consumer-oriented, and have financial products reviewed under one (1) single independent agency. Her timing was just right because, in 2010, the subprime mortgage market collapsed, $10 Trillion in household wealth was wiped out, and in that aftermath Obama’s administration asked Congress to establish an agency to ensure consumer protection. [2]

So What is the CFPB?   The Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB) as an independent financial regulator within the Federal Reserve System.[3] It moved 18 existing federal statutes to the CFPB to administer including the Truth-In-Lending Act, Fair Credit Reporting Act, and the Fair Debt Collection Practices Act and vested the CFPB with potent investigative and enforcement powers including seeking restitution, disgorgement, injunctive relief, and civil penalties of up to a $1Million a day! The CFPB pursues unfair, deceptive, or abusive acts or practices; Writes rules; Supervises companies; Enforces laws outlawing consumer finance discrimination; Gives financial education; and Monitors new risks to consumers.[4] In the past 10 years, the CFPB obtained $11 Billion in penalties ($1 Billion from Wells Fargo for charging too much for mortgage interest rate-lock extensions, and adding insurance costs and fees into auto loans).[5]

CFPB is the watchdog for: (1) Mortgage Companies; (2) Credit Reporting; (3) Personal Loans; (4) Debt Collection; (5) Credit Repair Services; (6) Personal Consumer Reports; (7) Credit Cards; (8) Pre-paid Cards; (9) Checking Accounts; (10) Savings Accounts; (11) Vehicle Loans; (12) Leases; (13) Student Loans; (14) Payday loans; (15) Title Loans; (16) Money Transfers; (17) Virtual Currency; (18) Check Cashing; (19) Currency Exchange; (20) Cashier’s/ Traveler’s checks; and (21) Debt Settlement.[6] Complaints can be filed against companies and individuals with CFPB online, and the CFPB can be called at (855) 411-CFPB (2372) for more information.

Is the CFPB a valid Agency or has it been Abolished? On June 29, 2020, the United States Supreme Court decided Seila Law, LLC v. Consumer Financial Protection Bureau, putting the CFPB in the hotseat of whether it would be dismantled. The case revolved around a law firm providing debt-related legal services was issued a subpoena from the CFPB in order to investigate the firm’s business practices, the law firm refused to comply, objecting that the CFPB’s entire existence was unconstitutional as its structure violated the Separation of Powers. The Supremes agreed in part, but offered a resolution to fix the CFPB’s ill-formed structure stating,

“In organizing the CFPB, Congress deviated from the structure of nearly every other independent administrative agency in our history. Instead of placing the agency under the leadership of a board with multiple members, Congress pro­vided that the CFPB would be led by a single Director, who serves for a longer term than the President (i.e. 5 years) and cannot be removed by the President except for inefficiency, neglect, or malfeasance. The CFPB Director has no boss, peers, or voters to report to.” … “Such an agency lacks a foundation in historical practice and clashes with constitutional structure by concentrating power in a unilateral actor insulated from Presidential control. We therefore hold that the structure of the CFPB violates the separation of powers. … The agency may therefore continue to operate, but its Director, in light of our decision, must be removable by the President at will.”

Questions answered by the CFPB as it pertains to Real Estate. Remembering that the CFPB is consumer oriented, so it has a wealth of information. The following questions have been answered by the CFPB as common questions that occur in real estate transaction but unfortunately their website is not well organized by topic. I have re-organized them for easy reference as it pertains to obtaining a loan for real estate transactions:

DISCLAIMER: Not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney.   FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

[1] Seila Law, LLC v. Consumer Financial Protection Bureau Pg. 8

[2] Seila Law, LLC v. Consumer Financial Protection Bureau Pg. 8

[3] Seila Law, LLC v. Consumer Financial Protection Bureau Pg. 9

[4] The Bureau.

[5] Wells Fargo Hit With $1 Billion In Fines Over Home And Auto Loan Abuses

[6] CFPB Complaint.

Unequal≠Housing

History. Civil rights leader Martin Luther King Jr. said that The Civil Rights Act of 1964 was nothing less than a “second emancipation.” President John F. Kennedy, initially proposed the Act garnering strong opposition, but Kennedy’s successor, Lyndon B. Johnson signed it into law. The Act was championed for ending segregation in public places, and banning employment discrimination based on: race, color, religion, sex, and national origin. The Act was later supplemented to embrace pregnancyage, and disability as additional protected classes.[1] The Act paved the way for two major follow up laws: The Voting Rights Act of 1965, which banned the use of obstacles (e.g. state and local poll taxes, literacy tests, refusal to tabulate or cast a vote, intimidation, threats, or coercion) preventing African Americans from exercising their right to vote as guaranteed by the U.S. Constitution’s 15th Amendment; and the Fair Housing Act of 1968 (“FHA”) which is the heart of this article.

Passing of the FHA, and MLK Jr.. On April 4, 1968, the day the Senate voted in favor of the FHA, Martin Luther King, Jr. was assassinated in Memphis, Tennessee. Amid a wave of emotions, including riots, burning, and looting in more than 100 cities around the country, President Lyndon B. Johnson pressured Congress to pass the new civil rights legislation before King’s funeral in Atlanta. On April 10, 1968, the House passed the FHA, and President Johnson signed it into law the following day.

Who does the FHA apply to? Property owners, property managers, developers, builders, architects, real estate agents, mortgage lenders, homeowner associations, insurance providers, and others who affect housing opportunities.

Prohibited Discriminatory Practices In Housing Sales and Rentals. It is discrimination to take any of the following actions because of race, color, religion, sex, familial status, or national origin and in some cases disability:

  • Refuse to negotiate sales or rentals.
  • Discourage sales or rentals.
  • Discourage the purchase or rental of a dwelling.
  • Misrepresent that a dwelling is unavailable for inspection, sale, or rental even though it is.
  • Make unavailable or deny a dwelling.
  • Refuse sales or rentals after making a bona fide offer.
  • Different terms, conditions, or privileges of sales or rentals.
  • Different services or facilities in connection sales or rentals.
  • Make a statement of preference, limitation, or discrimination for or against a protected class. (for this reason, realtors are guided to use words that only describe the property, and avoid words as outlined more fully below).
  • “Blockbusting” – For profit, persuade, or try to persuade, homeowners to sell their homes by suggesting that people of a particular protected characteristic are about to move into the neighborhood.
  • “Steering” – steer a renter or buyer to a certain area.
  • Deny access or membership to any MLS or real estate brokers’ organization.
  • Different sales prices or rental charges.
  • Different qualification criteria, applications, standards, or procedures, (e.g. income standards, application requirements, application fees, credit analyses, approval procedures or other requirements)
  • Evict a tenant or a tenant’s guest.
  • Sexual harassment (e.g. quid-pro-quo, or a hostile environment). Women, particularly those who are poor, and with limited housing options, often have little recourse but to tolerate the humiliation and degradation of sexual harassment or risk having their families and themselves removed from their homes. The Department of Justice’s enforcement program is aimed at landlords who create an untenable living environment by demanding sexual favors from tenants or by creating a sexually hostile environment for them.
  • Fail or delay performance of maintenance or repairs.
  • Assign person to a particular building, section, or neighborhood.
  • Different terms or conditions of homeowner’s insurance.
  • Retaliate against one who files, or assists in filing, a fair housing complaint or investigation.
  • Fail to make reasonable accommodations and allow reasonable modifications necessary to allow persons with disabilities to enjoy their housing.
  • Discriminate in appraising a dwelling
  • In Lending: Charge different points, interest rates, or other costs.
  • In Lending: Denying a mortgage, or charging higher interest rates for properties located in minority neighborhood
  • In Lending: Fail to consider applicant’s disability-related income, such as SSI, or SSD.
  • In Lending: Steering borrowers to loans with less favorable terms.
  • In Lending: Refusing mortgages to women on maternity leave.
  • In Lending: Providing a different customer service experience.

Words to avoidAll words must be considered in context, however a non-exhaustive list of words and phrases to generally “avoid,” “use caution,” and which are “acceptable” are found in this link.

“No criminal convictions.” Some statements may not seem discriminatory but in fact have a discriminatory effect, result in disparate treatment, and thus have a “Disparate Impact” on a protected class. Although criminal convictions are not by themselves a protected class, a 2016 HUD memo, titled Office of General Counsel Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real Estate-Related Transactions found that screening out all criminal convictions, regardless of underlying crime and when it occurred, could violate the FHA. The memo mentions that,

“Across the United States, African Americans and Hispanics are arrested, convicted, and incarcerated at rates disproportionate to their share of the general population. Consequently, criminal records-based barriers to housing are likely to have a disproportionate impact on minority home seekers.”

Drug or alcohol useUnder the Fair Housing Amendments Act, landlords cannot refuse to rent to someone on the basis of past drug addiction, or alcoholism, as this is considered a disability. However, current drug users, as well as individuals with convictions for drug sales or manufacturing, are not part of this protected category.

Exemptions from discrimination. The FHA generally exempts but subject to even more limited circumstances: (1) “The Mrs. Murphy exemption” i.e. an owner-occupied building with 4 units or less; (2) Sales or rentals by an owner of 3 or fewer single-family homes, provided no agent is used, no discriminatory advertisements are used, owns 3 or fewer single-family homes, is not in the business of selling or leasing dwellings, and has not sold a home in the previous 24 months; (3) housing operated by religious organizations for persons of the same religion; (4) Tenants constituting a direct threat to others health or safety, or whose tenancy would result in substantial physical damage to others’ property; (5) Housing for Older Persons (55+ years of age) may discriminate based on age; and (6) Private clubs not open to the public may limit occupancy to its members if the lodging is an incident to its primary purpose, and is owned or operated by them not for a commercial purpose.

Not so obvious examples of discrimination. A landlord locates families with children to a single portion of a complex, places an unreasonable restriction on the total number of persons who may reside in a dwelling, or limits access to recreational services provided to other tenants. Muslim woman wearing a jihab sees an advertisement and is told no units are available and asks to be put on a waiting list but never receives a call. Asian man interested in a neighborhood is asked by realtor if he will feel comfortable there, and another neighborhood with more “people like you” is suggested. Advertising ‘professionals only,’ may unfairly discriminate against people who can’t work due to disabilities.

Undercover Informants. Trained volunteers who, without any intent to rent or purchase, pose as prospects to gather information. These “Testers”, inform whether a housing provider is complying with fair housing laws or engaging in unlawful housing discrimination based on race, national origin, disability, or familial status. Most testing cases are based on allegations of agents misrepresenting the availability of rental units or offering different terms and conditions based on race.

HUD Enforcement. Housing discrimination complaints are investigated by The U.S. Department of Housing and Urban Development (HUD’s), Office of Fair Housing and Equal Opportunity (FHEO). Complaints may be filed within one year as an online complaint. FHEO intake specialist can be reached nationally at 1 (800) 669-9777 or 1 (800) 877-8339, in the regional office for Florida at (404) 331-5140 or (800) 440-8091, or directly at the Miami Field office at (305) 536-4456.

HUD’s Tools For Forcing Compliance. HUD may: conduct investigations, engage in “Conciliation” (i.e. mediate), request parties enter into a “Conciliation Agreement” (i.e. a written settlement or require the parties go to arbitration to award appropriate relief including monetary); make the conciliation agreement public, refer breaches of the conciliation agreement to the Attorney General’s Office for a civil lawsuit to be filed, at any time authorize the AG’s Office to file immediate injunctive relief pending final disposition of the complaint; and if the complaint relates to discriminatory housing practices may refer the matter to a State agency. Hearings may be conducted on an expedited basis before an administrative law judge, or by the AG’s office in United States District Court. Sanctions include: actual damages; injunctive relief; equitable relief; and civil fines up to $10,000 (1st time); $25,000 (>1 in 5yrs); or $50,000. If a real estate agent is found to have committed discriminatory housing practices HUD must refer the case over to the DBPR for disciplinary action.

Civil Lawsuits. Within two (2) years an aggrieved person (i.e. Someone who claims to have been injured, or will be injured, by a discriminatory housing practice) may sue, and the court may appoint an attorney upon application. The court may: award actual damages; award punitive damages; order temporary and permanent injunctions; issue restraining orders; compel affirmative action be taken; award attorney fees and costs; and award other relief as the court deems appropriate.

* Additionally, be aware that Florida’s Fair Housing Act (Fla. Stat. §§760.20-37), and any county or city rules that could add even more protected classes, such as source of income, age, or actual or perceived status as a victim of domestic violence, dating violence, or stalking.

DISCLAIMER: Not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney. FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

[1] In 1988, Congress passed the Fair Housing Amendments Act, which expanded the law to prohibit discrimination in housing based on disability or on family status (pregnant women or the presence of children under 18).

eNotes and eVaults – Why are they eSpecial?

Many of us are familiar with DocuSign as a quick and easy means of signing documents electronically. But why can’t you just slap a digital signature on a promissory note, what makes promissory notes so different, and what is an eNote?

History. Back in 2000, Congress passed the ESIGN Act (Electronic Signatures in Global and National Commerce) 15 USC §7001 et sequi, forcing states to accept electronic signatures and records as valid, legal, and enforceable means of conducting transactions but “Transferable Records” (or eNotes as they are commonly called in the industry) were given special treatment.[1] As a result, 47 states adopted the UETA (Uniform Electronic Transactions Act) which established uniform guidelines for accepting electronic signatures and records (WA, NY, and IL adopted their own similar legislation).

Promissory notes are unique. The obligation to repay a loan for a residence was traditionally evidenced by a written-paper-negotiable promissory note. It is common for the original lender to then turnaround and resell that note secured by a mortgage to GSE’s (Government Sponsored Enterprises) like Fannie Mae, Ginnie Mae, and Freddie Mac. The GSEs then pool, bundle, and repackage notes and mortgages into Mortgage Backed Securities (“MBS”) and resell them on the secondary mortgage market to investors. These are typically seen as low-risk investments because the GSEs guarantee the principal and interest on the note even if the borrower defaults. Reselling the note is how lenders free up money to make more loans and the circle of buying and selling notes, which is big business, on the open market continues.

How is a note Transferred? Transferring a written promissory note is generally accomplished by physically delivering the original wet ink signed note, along with a written or stamped “indorsement,” thereby giving the transferee the right to enforce the note. But as the industry moved to substitute paper notes, a new process to replace the physical delivery of possession and indorsement of an “original” paper promissory note needed to be created.[2] Most promissory notes fall under the legal scheme of “negotiable instruments,” which is governed by Article 3 of the Uniform Commercial Code (UCC).[3] Article 3 of the UCC alone does not support a promissory notes executed as electronic records.[4] But more importantly, the industry and borrowers needed assurances and protection. A pdf of a promissory note signed by a borrower could be easily duplicated and forwarded by email instantaneously to an infinite amount of people, a black-market of duplicated counterfeit notes could be sold to unsuspecting buyers, borrowers could be subject to multiple counterfeit claims because their note was resold to multiple investors without anyone knowing (unlike a wet-signed paper version) which one of the electronically signed promissory notes was the original and only note capable of being enforced. This is why eNotes required special attention and legislation, and simply slapping an electronic signature on a pdf of a note is insufficient.

“eNotes” are the electronic version of a paper-based negotiable promissory note. It is not just a pdf version of a promissory note. Florida’s Statute §668.50 is Florida’s UETA (Uniform Electronic Transfer Act) which establishes the framework for signing, storing, and transferring eNotes from an original lender to subsequent purchasers. The technical and legal term for an eNote under Florida’s UETA is also called a “Transferrable Record.”[5] Rather than being concerned with a paper promissory note’s “possession” and “indorsement” requirements, eNotes focus on “control” and “transfer of control” of the electronic records showing ownership thereof. In addition to meeting Florida’s statutory requirements set forth in §668.50(16), in order for the eNote to qualify for being purchased by a GSE (e.g. Fannie Mae’s requirements are examined below), eNotes must be:

  • Electronically created by the Lender in the MISMO S.M.A.R.T. Doc® format (Not a pdf).[6] SMART stands for Securable • Manageable • Archivable • Retrievable • Transferable; [7]
  • If it is an eNote that is intended to be offered for sale to Fannie Mae or Freddie Mac, then be aware that they use “Uniform Instruments” which must be modified to reflect that the promissory note is actually an eNote. If an eNote is going to be used as part of the loan package, then the eNote must contain additional headers, footers, and clauses agreeing to the electronic means; [8]
  • eNote is then loaded by the lender into the eClosing platform chosen by the lender.[9]
  • Electronically signed by the borrower;[10]
  • A system of logs and audit trails must be maintained for the life of the loan plus seven (7) years; [11]
  • A tamper-evident cryptographic seal, created by digital signature technology, must be applied to the signed document immediately after the last borrower’s signature has been applied. If any alterations are made to the document, the seal will be compromised, therefore making it apparent that the document has been altered. [12]
  • Within one (1) business day of signing, the eNote must be “registered” in the “MERS® eRegistry” (owned and operated by MERSCORP Holdings, Inc) showing the original lender named in the eNote as the party with “control” of the eNote (the “Controller”) and the location of the eNote (i.e. where the eNote is being stored); [13]
  • After registration, all subsequent transfers of “control” from one party to another must be properly recorded on the “MERS® eRegistry”, so that the MERS® eRegistry identifies the current party in “control” (i.e. the current transferee).

eVAult. With respect to locating the eNote, the eNote is only “registered” in the MERS® eRegistry but that is not where the eNote is “stored.” The MERS® eRegistry is like the librarian of the eNote world. It simply tracks who controls which eNote and which eVault the eNote is stored. The actual eNote is stored and maintained by the lender or its designated custodian in an “eVault.” eVaults are electronic platforms built to store the eNote and integrate directly with the MERS® eRegistry. That lender must be prepared to demonstrate that the eNote, while in the lender’s “control,” has not been impermissibly altered since it was signed, thus the eVault must have the proper controls in place to maintain a definitive copy of the eNote, otherwise referred to as the “authoritative copy.[14] Thus an eVault is a critical component to enforceability. Controllers mostly utilize third-party services to maintain the eVault, but some operate the eVault software platform within their own internal data processing services.

DISCLAIMER: Not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney. FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

[1] See, 15 USC §7002.

[2] See, 673.2011 Negotiation.—

(1) The term “negotiation” means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder.

(2) Except for negotiation by a remitterif an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by the holder. If an instrument is payable to bearer, it may be negotiated by transfer of possession alone.

[3] Why Can’t I Just Slap an E-signature on a PDF Note?

[4] Enabled By Lenders, Embraced By Borrowers, Enforced By The Courts: What You Need To Know About Enotes, By Margo H.K. Tank and R. David Whitaker, May 1, 2018, Pg. 1

[5] Fla. Stat. §668.50(16)

(16) TRANSFERABLE RECORDS.—

(a) For purposes of this paragraph, “transferable record” means an electronic record that:

1. Would be a note under chapter 673, or a document under chapter 677, if the electronic record were in writing.

2. The issuer of the electronic record expressly has agreed is a transferable record.

(b) A person has control of a transferable record if a system employed for evidencing the transfer of interests in the transferable record reliably establishes that person as the person to which the transferable record was issued or transferred.

(c) A system satisfies paragraph (b), and a person is deemed to have control of a transferable record, if the transferable record is created, stored, and assigned in such a manner that:

1. A single authoritative copy of the transferable record exists which is unique, identifiable, and, except as otherwise provided in subparagraphs 4., 5., and 6., unalterable.

2. The authoritative copy identifies the person asserting control as the person to which the transferable record was issued or, if the authoritative copy indicates that the transferable record has been transferred, the person to which the transferable record was most recently transferred.

3. The authoritative copy is communicated to and maintained by the person asserting control or its designated custodian.

4. Copies or revisions that add or change an identified assignee of the authoritative copy can be made only with the consent of the person asserting control.

5. Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy.

6. Any revision of the authoritative copy is readily identifiable as authorized or unauthorized.

(d)Except as otherwise agreed, a person having control of a transferable record is the holder, as defined in s. 671.201(21), of the transferable record and has the same rights and defenses as a holder of an equivalent record or writing under the Uniform Commercial Code, including, if the applicable statutory requirements under s. 673.3021, s. 677.501, or s. 679.330 are satisfied, the rights and defenses of a holder in due course, a holder to which a negotiable document of title has been duly negotiated, or a purchaser, respectively. Delivery, possession, and indorsement are not required to obtain or exercise any of the rights under this paragraph.

(e) Except as otherwise agreed, an obligor under a transferable record has the same rights and defenses as an equivalent obligor under equivalent records or writings under the Uniform Commercial Code.

(f) If requested by a person against which enforcement is sought, the person seeking to enforce the transferable record shall provide reasonable proof that the person is in control of the transferable record. Proof may include access to the authoritative copy of the transferable record and related business records sufficient to review the terms of the transferable record and to establish the identity of the person having control of the transferable record.

[6] Guide to Delivering eMortgages to Fannie Mae, April 20, 2020, ¶3.3.2

[7] Mismo SMART Doc® Components consist of: “An electronic document created to conform to a specification standardized by MISMO®. A SMART Doc® can lock together data and presentation in such a way that it can be system-validated to guarantee the integrity of the document. The SMART Doc Specification is a technical framework for representing documents in an electronic format. This format links data, the visual representation of the form, and signature. The visual representation of the documents can utilize a variety of technologies, such as XHTML, PDF, and TIFF. A SMART Doc can be secured to prevent tampering. Therefore, the Specification allows system validation to ensure that what the borrower sees and signs on the computer screen is the exact document that will be stored. It also ensures that the data displayed on the screen will be the exact data used for processing the loan.”

[8] Guide to Delivering eMortgages to Fannie Mae, April 20, 2020, Appendix A ¶(c) e-Note Clause

[9] E-Notes and E-Mortgages what you should know.

[10] Guide to Delivering eMortgages to Fannie Mae, April 20, 2020, ¶3.3.3

[11] Guide to Delivering eMortgages to Fannie Mae, April 20, 2020, ¶3.3.4

[12] Guide to Delivering eMortgages to Fannie Mae, April 20, 2020, ¶3.4.1

[13] Guide to Delivering eMortgages to Fannie Mae, April 20, 2020, ¶3.5

[14] Enabled By Lenders, Embraced By Borrowers, Enforced By The Courts: What You Need To Know About Enotes, By Margo H.K. Tank and R. David Whitaker, May 1, 2018, Pg. 2

PropTech, turf-war for Realtors, or welcomed change?

PropTech, refers to technology in real estate. It focuses on ways to optimize the way people research, rent, buy, sell, and manage property. PropTech already sought to disrupt the real estate industry but COVID-19 and stay-at-home orders just catapulted it into the fast tracked. Here are some PropTechs worthy of your attention that are going to be market disrupters, useful tools, or game changers that will help real estate professionals adapt, evolve, fail, be inspired, or make strategic partnerships in a virtual cyber gang-war over real estate turfs:

CupixEasyPanoEyeSpy360MatterportRicohToursZillow, 3DHomeTour, 360 degree cameras for virtual tours. Some turn a space into accurate and immersive digital doll houses giving the real feel of being right inside the property. Matterport allows you to click and drag to accurately take measurements for furniture placement.

AivaMarketLeaderReferralExchangeBoomTownVerse/Agentology, Real estate lead generation. Verse even calls, makes the appointment, and calendars like a personal secretary.

ApartmentListBungalowNestPick. Residential rental listings, find a roommate.

Co-Buy. Buy a home with one or more friends, family, or lovers. Handles joint financing, if co-owner wants to leave but the other doesn’t, or if one goes bankrupt.

CompStak. Provides nationwide lease and sales comps.

Cozy. Tenant screening.

CrowdStreetRealCrowd. Investment opportunities for various real estate projects.

Divvy. Locates rent-to-purchase homes. Good for those worried about being corporately relocated.

DoorSteadOneRent. Property management, and pays guaranteed amount if property remains vacant.

EasyKnockLeaseBack. Sell house, get needed money, and lease it right back.

FastCustomer. Free App. Instead of waiting on hold, App has company call you back.

Flip, finds replacement tenant, proposes qualified subtenant to landlord, and provides paperwork.

Flyhomes. Makes every buyer offer more attractive as a cash-offer.

FTIC that’s us, national award winning title insurance company authorized to conduct Florida closings 100% virtually and has trademarked the “No Junk Fee Guarantee.” ®

Happy. Logs and records punch list for needed repairs during property inspections. Good for multi-units.

HelloRentedMyndObligo,. Insures landlords against lost rent in case of residential tenant default, helps ease burden of large advanced rent and security deposit requirements, or acts as double insurance for nonpayment.

HouseCanary. Quickly appraise property on your desktop with certified inspector and appraiser using AI.

Keepe. Take picture of handyman needs and receive bids.

Knock.  Start living in new home while Knock sells old home, no waiting for old house to sell.

Krisp. Mute background noise in videoconferences and any communication app.

Niido, Development company that design-built an apartment complex in Miami with home-sharing in mind to avoid roadblocks of short term rentals that Airbnb faced.

OpenDoorKnockOfferpad, Buys and/or sells houses via iBuying, which stands for instant buying, using prompt, algorithm-driven cash offers and then sell the homes themselves.

RealtyHive. Markets buyers based on geofence created around property.

Rentberry, bid on home rentals anywhere in the world like an ebay auction.

Reonomy. CRE.

Seniorly. Senior living listings and the peculiar care options.

Squarefoot.   Rental listings for commercial real estate and shared office space.

TruliaZillow. Real estate and rental listings.

Unison. Instead of a loan they provide cash in exchange for co-ownership.

UrbanDoorZeusLiving. Furnished apartments for professionals who travel. Owned by Airbnb.

Vacasa. Airbnb alternative. Rent vacations homes with 3D virtual tours and maid service.

We, Shared office spaces, good for freelancers and remote workers needing occasional away from home office, high-speed internet, bright modern spaces, large common areas, business-class printing and scanning, conference rooms and private phone booths.

How Pandemics like COVID-19 infect Real Estate

This article addresses (1): The origins of COVID-19, “Wet Markets”, and the Chinese sale of Wildlife; (2) Chinese buyers are hot, but how about for Florida?; (3) Cultural differences about using masks; (4) Becoming today’s 2020 Virtual Realtor; (5) Mortgage rates bottom to lowest in 49 years; (6) HELOCs as an alternative to fix up homes; (7) Lack of inventory and new construction; (8) Can COVID-19 Survive on Imported Products/Goods/Building Supplies?; (9) Litmus Test of Looking at Retail Stores in Airports; (10) Other Brick and Mortar Retailers/Tenants; (11) Triggering Insurance Coverage; and (12) Real Estate Stocks.

Origins of COVID-19, “Wet Markets”, and Chinese sale of Wildlife. This is not the first time the world encountered a pandemic or a coronavirus. For instance, the phrase “Avoid it like the plague!” dates back to the 14th Century bubonic plague which swept Asia, Europe, and Africa up in the “Black Death” killing an estimated 50 million people.

Coronaviruses are named for the spikes protruding from their surface which resemble a crown. In 2003, a coronavirus called SARS-coV (Severe Acute Respiratory Syndrome) emerged from Civet Cats in a wet market in southern Foshan, China. In 2012, a coronavirus called MERS-coV (Middle East Respiratory Syndrome) emerged from camels in Saudi Arabia.[1] Diseases derive from animals to wit: Plague (fleas); Influenza (birds, pigs); HIV (chimpanzees), EBOLA (fruit bats); ZIKA (Mosquitoes); MERS-coV (Camels); SARS-coV (Civet Cats); and COVID-19 (Bat to Pangolin).

Doctors traced COVID-19 (the nickname for Coronavirus disease 2019) to a “wet market” in Wuhan, China. Wet markets are a market where live animals are slaughtered and sold for consumption. In Wuhan, cages and cages of animals were lined up in rows and then stacked one-over-another. As the waterfall of animal urine, blood, vomit, and excrement soaked each of the ensuing caged animals from the animals above, conditions became exponentially unsanitary allowing viruses to brew and fester.

In the 1970’s, communist China which controlled all food production, faced famine and was unable to feed all its people. In 1978 China gave up control, allowing private farming. Big companies focused on staples like beef, poultry, and pork production. Smaller farmers however focused on wild animals like snakes, bats, turtles, ostrich mouse, bear, peacock, alligator, duck, fox, civet cats, tiger, rhinoceros, camel, and pangolin. In 2018 the wild-life market was estimated at ¥148 Billion Yuan (equivalent to $21.3 Billion US dollars) and exerted tremendous lobbying power in China to stay open. The wildlife food industry shifted marketing strategies to promote wildlife animals as tonics, body-building, sex enhancing, and disease fighting. Notably, the majority of Chinese do not eat wildlife animals. China has since shut down thousands of wet markets and temporarily banned wildlife trade. Unlike in the past, Chines social media is now available and is pressuring the government to make the ban on wildlife sales permanent. [2]

Chinese buyers are hot, but how about for Florida? For seven (7) consecutive years, since 2013, China has been the largest foreign buyer in the U.S. in terms of total dollars spent of residential property: (2013 $12.8B); (2014 $22B); (2015 $28.1B); (2016 $27.3B); (2017 $31.7B); (2018 $30.4B); and (2019 $13.4B). For five (5) consecutive years, since 2015, China has also been the largest foreign buyer in the U.S. in terms of total number of purchases of residential property: (2015 33,807); (2016 29,195); (2017 40,572); (2018 40,372); and (2019 19,900). For Seven (7) consecutive years (excepting 2017) the average purchase price paid by Chinese buyers in the U.S. has also been the highest (2012 $484K) (2013 $556K); (2014 $590K); (2015 $832K); (2016 $937K); (2018 $753K); and (2019 $675K). However, even though Florida has consistently dominated the U.S. market as a major destination for all foreign buyers (e.g. Canada, UK, India, Brazil, etc…) since 2009; only 4% of Chinese buyers are buying in Florida, with the lion share of 34% of Chinese buyers purchasing in California. But before snubbing 4% off, that would translate into over $53 Million in Florida residential sales in 2019, and nearly half of all Chinese purchases were all-cash. [3]

Cultural Differences in Using Masks. In the U.S. when you see someone with a facemask you think they’re sick. But in China, the understanding is that people wear facemasks to avoid getting infected by others.

Becoming Today’s 2020 Virtual Realtor. Today, just about every part of a real estate transaction can be accomplished virtually. Realtors may expect reaction to be strongest among sellers, who worry about strangers entering their homes. Realtors have been giving property tours through WhatsApp, Facetime, and other video conferencing phone apps.   When listing properties, realtors may want to consider three-dimensionally scanning homes, so buyers may virtually tour homes without having to congregate in an open house. My favorite technology is offered by Matterport which amazingly uses 360 degree cameras to turn a space into an accurate and immersive digital doll house that gives the real feel of being right inside the property. The program also allows you to click and drag to accurately take measurements for furniture placement. Contracts can be signed through DocuSign, money can be transferred through wires, and effective January 1, 2020 we are even capable of having all of a buyer’s and seller’s documents signed and notarized using simultaneous online audio and video technology through our specially licensed Remote Online Notaries.

Mortgage Rates Bottom to Lowest in 49 Years. Lower rates mean more buying power for those already motivated in the market looking to buy. Lower rates will also entice previously unmotivated new buyers who have been hesitantly sitting-on-the-fence to jump at the opportunity for FOMO (Fear of Missing Out). In early March we saw the 30-year-fixed mortgage rate fall to 3.29%, which is the lowest rate in history since Freddie Mac started tracking such rates in 1971. Similarly, the 15-year fixed hit 2.79%, which is also the lowest rate in history since Freddie Mac started tracking that rate in 1991. The central bank noted that the move was in response to the “evolving risks” the COVID-19 outbreak poses to the economy.[4] Mortgage applications are up, the industry is on a mortgage broker hiring spree, and it anticipates capturing refinances to save owners several thousands of dollars in lower monthly payments. Big banks are shifting staff to help support the influx of mortgage applications. Refinances could stimulate the economy because consumers will have more money in their pockets to spend. Although some experts predict 30-year-fixed rates may drop further to 3.0%, how much more do they really need to drop considering the current low rates already accomplished the goal of creating a boom to refinances, and despite homebuyer interest it doesn’t change the fact that there is a shortage of homes for sale? As a result, lenders don’t need to give Americans much more incentive to apply for new home loans.

HELOCs as an Alternative to Fixing Homes. As an alternative to refinancing, one thing to suggest are HELOCs (or Home Equity Lines of Credit). Although falling in popularity, the rates on HELOCs from lenders are going to be so tempting, especially for people wanting to fix-up homes and take out temporary but modest loans.

Lack of Inventory and New Construction. Generally, as mortgage rate drop, home sales rise. However, the major problem is the supply of homes being offered for sale remains at historic lows. No matter how much a buyer wants, there are not enough homes on the market for sale to buy. Therefore, regardless of how good the rates are, prices from sellers may remain unaffordable. But the lack of inventory of re-sales, should promote growth in construction of new homes to relieve the strain of low inventory. Focus on pre-construction contracts for new developments. While “pending contracts” are not completed contracts, it is an indicator of future housing trends. The concern however is that developers will suffer from building supply shortages such as lighting, appliances, flooring etc., which will lead to higher construction costs, defaults, and delays in finding alternate suppliers.

Can COVID-19 Survive on Imported Products/Goods/Building Supplies? COVID-19 seems to behave like other coronaviruses with studies suggesting that it may persist on surfaces for a few hours or several days, which may vary under different conditions (e.g. type of surface, temperature or humidity of the environment).[5] A study of other coronaviruses found they remained on metal, glass and plastic for up to nine (9) days.[6],[7]

Litmus Test of Looking at Retail Stores in Airports. Declining foot traffic in terminals flying to Asia have seen sales slump by as much as 50% (JFK); 20% (LAX); 15% (SFO); and in terminals inside of Asia like Hong Kong, Singapore, and Thailand, as much as 70%; causing some major airport authorities to offer rent relief for several months.[8]

Other Brick and Mortar Retailers/Tenants. As if the one-two punch of increasing competition with online stores and sagging attendance at malls couldn’t get worse, retailers in shopping centers are now dealing with the inability to get supplies from Asia, plus declining sales, as consumers opt to avoid mass public places. COVID-19 could push buyers out of public malls and even further into the reclusiveness of e-shopping. In the heat of tenants demanding rent abatements, reductions, and less hours, the Singapore government offered a 15% property tax rebate to landlords. Tenants here in the U.S. may wish to look closely at their lease agreements force majeure (or acts of god) clauses very closely, as a diving board for discussions with their landlords.

Steps Taken by Landlords and Convention Centers. Several major office landlords are stepping up efforts to keep buildings clean and sanitary by disinfecting frequently touched surfaces such as: tabletops, doorknobs/handles, and elevator buttons; and installing hand-sanitizing dispensers at entryways, lobbies, and throughout buildings. A number of conferences and events have been cancelled. In China, landlords are offering discounts to tenants who sign long-term contracts.

Employer Response to COVID-19: Companies have shut factories, canceled conferences, drastically scaled back non-essential employee travel, required self-quarantine upon return, held board meetings via mass video conferencing, allowed employees to work remotely, bolstered IT, focused on keeping “critical operations” running, instituted layoffs, and have been curious about how to address the infectious disease with suspected employees in light of HIPPA. In major cities, employers are paying for taxis to have employees avoid public transportation like buses, trains and subways. JP Morgan Chase allowed 12,000 employees to work remotely which has the added benefit of testing their communications in the event of widespread disruption.

COVID-19 as a Contractual Defense. Health and safety of clients and staff are a priority. Therefore, the legal defenses of act of god, force majeur, impossibility, and commercial frustration are certainly going to be tested as cancellations, terminations, and non-performance of contractual obligations mount.

Triggering Insurance Coverage. Others may look to the wording of their insurance policies for coverage. Business Interruption coverage could be triggered if a disease’s outbreak at an insured location results in people choosing not to patronize a business. Previously coverage was found for cases of SARs, bird flu, and Zika, but again that was based on the specific wording of the policy. Trade disruption insurance (TDI) focuses on loss of earnings, extra expenses and contractual penalties incurred as a result of delays or disruptions in trade. Employees traveling on business into infected areas or those stationed permanently or semi-permanently in high-risk areas would be the most likely to make convincing cases for worker’s compensation coverage. If buying travel insurance, since insurance guards against future unknown events, find out first whether there is an exclusion for infectious disease, pandemics, or COVID-19.

Real Estate Stocks. Real estate is generally seen as a safer investment, but with tourism down and people staying clear of public places, there has been massive selloffs. Airbnb froze all business in Beijing for two months. Hotels and shopping malls have been hard hit, and for whatever reason even self-storage REITS suffered a significant decline.

DISCLAIMER: Not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney. FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®

[1] Center for Disease Control – About MERS

[2] Vox – Why new diseases keep appearing in China

[3] NAR – Profile of International Transactions in U.S. Residential Real Estate – 2019

[4] Market Watch – What the Fed’s surprise interest rate cut means for mortgage rates

[5] World Health Organization – Q&A on coronaviruses (COVID-19)

[6] New York Times – Surfaces? Sneezes? Sex? How the Coronavirus Can and Cannot Spread

[7] Journal of Hospital Infections – Persistence of coronaviruses on inanimate surfaces and their inactivation with biocidal agents

[8] WSJ- Airport Shops Suffer Crisis as Coronavirus Upends Travel