Ripple Effects from the Pandemic: What Will and Won’t Change in Tampa Real Estate

Are Tiny Houses in Peril? Maybe, But Interest Rates Will Stay Rock Bottom

First off, here’s an update from my universe: I’m hearing from clients and old friends, only to find out that people are making plans to move forward with their lives. I feel that everybody who is buying right now has a reason. People are deciding what they want as we enter the peak of the pandemic and move past it, and they’re already starting to think about how they’re going to make changes. Many of those changes involve moving!

There is more activity in the Tampa real-estate market than you might suspect. Money magazine reports: 

“Many real estate agents are optimistic that the market will soon snap back. Pending home sales went up 6.2% in the week ending April 19, Zillow reports. And, after falling for five weeks, mortgage applications rose 12% for the week ending April 24, compared with the previous week, according to the Mortgage Bankers Association.”

What WON’T Change – Interest Rates

Elliot Eisenberg, Ph.D., consulting economist for Greater Tampa REALTORS, says interest rates will say low, low, low because the last thing that the Federal Reserve will want to do is interfere with the nation’s economic recovery.

Not to say that everything is roses during COVID-19. When new stats are compiled, April home sales will, of course, show a decline because of the pandemic, Eisenberg says. 

But the fact that inventory – the stock of available houses – is at record lows means that the housing market is not headed for that disastrous burst-bubble thing it did more than a decade ago. It is still a seller’s market here in Tampa Bay. He predicts a brief economic downtown from which Florida may recover soonest because of more people relocating to the Sunshine State.

The Tiny House Movement – Speeding Ahead or Stalled?

While some cities (think: San Diego with its new proposal to expand zoning laws) are turning to tiny houses to help create more affordable housing, other experts predict that the pandemic may put an end to the movement. In an article in The Atlantic, “The Pandemic has Made a Mockery of Minimalism,” the author points out that drastically paring down one’s space and belongings doesn’t make much sense for people confined to their homes for weeks or months.

Two factors present during the pandemic might work against tiny homes. 

• One is that more people are working from home, and this shift in the workforce could take root and become more permanent. That means people will be looking for more square footage in their homes so they can carve out a dedicated workspace.
• A second reason is that tiny homes work best for people who spend a lot of time outside of them. They’re either at their employer’s workplace or hanging out in the sorts of large, public congregating areas that are the first to shut down in times of crisis. Tiny houses in big cities also can pack people densely in close quarters, which may not be the most desirable state of affairs in the future.

I suspect that social distancing practices will spill over into the way we approach our home lives, and I can see a new standard emerging. The three-bedroom, two-bath minimum requirement so many buyers adopted over the years may be replaced with a desire for larger homes with a minimum of four bedrooms. I wouldn’t be surprised to see an increase in sales of five-bedroom homes as well – plus larger lot sizes. Lots close to other neighbors might not be as attractive anymore. And nuclear families may have to merge as the generations once again consider living together. But we’ll see!

What’s Your Story?

If you’re thinking of making changes post-COVID-19 that involve real estate, I can help you navigate the way. There’s no reason to put your life on hold forever. As that Money magazine article also states: “Despite the difficulty of listing and closing house sales, many real estate market fundamentals are strong, real estate experts say.” If you’re planning to upsize or downsize, move out to the country, relocate to be closer to family – whatever your circumstance,

Check out our inventory of

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As a Tampa Realtor, one of the most common questions I’m asked by buyers is “who pays the commission?”

A Buyer’s Agent is compensated by splitting the Listing Agent’s commission, so it cost you nothing.

So what does a Buyer’s Agent actually do, and why do I need one?

A well accomplished Realtor will be able to help you purchase a home in many ways you may not have thought about. First, a Buyer’s Agent is working for you and has your best interest in mind. Think of the relationship as having your own personal representation from someone who is going to guide you in the right direction and negotiate the best possible price on your behalf.  While you, as a buyer are looking at all bells and whistles, like granite counter tops and stainless steel appliances, your agent may notice little things that most buyers wouldn’t think of looking for. They will point things out about the home such as: Stains on the ceiling from possible water intrusion, stucco repairs to the outside, or termite damage.  In addition to pointing out defects of a home, a good Buyer’s Agent will be able to explain in detail the terms of the contract and leave you with a “way out” should you decide not to proceed due to a home inspection that revealed issues, or if a home doesn’t appraise for the purchase price.

The Goal of a Listing Agent:

To get the best possible price for the owner in the shortest period of time. A listing agent works for the seller and may not be able to disclose certain pertinent information to you, such as what the seller’s bottom line is, or what their motivation is for selling. A listing agent can also use the information you give them to relay your thoughts and feelings back to the seller. Let’s say you are really excited about a home and disclose this to the listing agent who showed you the home. You then decide to make an offer with the listing agent who knows you love the home. The listing agent will most likely tell the seller that they believe you will come up in price based on your emotional attachment to the house.

Good Questions to Ask a Realtor who is a Buyer’s Agent:

• How much was the home listed for originally and how many price reductions were done?
• How many days the home has been on the market?
• Can you give me any history of the home in (MLS), Multiple Listing Service i.e…. if it was listed prior with another Realtor and how much they were asking at that time?
• Information about property taxes and how much they will go up next year?
• What is Homestead Tax Exemptions and how does it work?
• What is the neighborhood’s popularity and where are the good schools?
• What homes sold for in a particular neighborhood, called a Comparable Market Analysis.
• How do short sales work?
• Can I put more than one offer in at the same time?
• Are there any outstanding permits that have not been closed out?

If Real Estate Buyer’s Agents are free to use, why wouldn’t you want to use one?

Don’t pick the first agent you speak with, instead interview at least two agents to determine who is the right fit for you.  You should also ask for recommendations from their past clients, and do a Google search for their name. You’d be surprised at what you can find out.

If you are thinking of purchasing a home and would me to represent you as your real estate agent in the Tampa Bay area, you can contact us here. 

The post Why Use a Buyer’s Real Estate Agent Instead of a Listing Agent? Tampa, Fl appeared first on The Tampa Real Estate Insider.

Waterfront Condos and townhomes in St. Pete starting in the 200’s ….

Wide-open unobstructed WATER VIEWS from this second-story, completely updated condo at Waterside at Coquina Key. Enjoy cool breezes and watch the wildlife every day on your tropical balcony. Yes, you’ll even see the dolphins swimming by! The unit faces East, so you’ll get a lovely sunrise in the morning without the intense sun in the afternoon. Hardwood flooring throughout the unit with ceramic tile in the kitchen and bath. The kitchen is oversized with a breakfast bar, tons of storage, and counter space. Recent renovations include new drywall, an island counter in the kitchen, new cabinets, laundry added with full-size washer and dryer, new stainless steel appliances, granite countertops, new plumbing, new modern bath with a glass-enclosed shower, AC 2015, and a new electrical panel. Waterside at Coquina Key boasts 88 acres of lush grounds and is a Resort Community with on-site Key West Style Club House that hosts weekly events for the residents. Prime location just 10 minutes to Downtown St. Pete, shopping, upscale restaurants, music venues, and art studios. The famous Vinoy Golf Course, waterfront restaurants to dock your boat for lunch, and the new St. Pete Pier are also nearby. St. Pete Beach is ONLY 15 minutes away, and Tampa Int’l airport 35 minutes. You won’t find a more breathtaking waterfront view for this price! If you are looking for an excellent getaway for a month or seasonal, use it when you want and rent it out through the on-site property manager or airbnb it! Beautiful lush grounds, on-site café/bar with happy hour specials, two pools, one heated year-round, and facing the bay with open views and a spa! There’s also a fitness center, kayak storage, volleyball, tennis, 24-hour guard, fishing pier, and more. Ask your agent about boat slips listed for sale in MLS that can be purchased separately! Call today to see this fantastic condo before it’s gone!

Waterside Yacht club with private Resident-only restaurant and bar
Boat docks, boat slips, lifts and dry storage available
Lighted tennis and sand volleyball courts
3 resort swimming pools and spas in the Gulf Coast tradition
3 miles of sea wall for strolling and watching glorious sunsets
88 acres of lush, colorfully landscaped grounds
2 state-of-the-art fitness centers with saunas and cardio theater
24-hour staffed gatehouse for your peace of mind

If you are looking for a great deal on a waterfront property, you’ve found it! Perfect for vacation or second homeowners because SHORT TERM Rentals are allowed.  Boat Slips are also for sale!

Call me for a showing and additional information 813-784-7744

St Petersburg Fl Homes For Sale

Contact me here: Rae Anna Conforti, Realtor

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Have you ever heard of selling anything, including a home, by using the process of elimination?

If something isn’t working currently, then we analyze the possible reasons why. If your home is currently listed for sale and it’s not selling, there is a reason.

First, let’s take a look at the key factors of selling a home:

1. Price of Home.

Price is one of the main determining factors of why anything doesn’t sell, including your home. Overpricing a home will lead to disappointment, fewer showings, and a waste of everyone’s time and energy. You can read more about overpricing versus underpricing your home here.

Good agents will tell you honestly what your home may be worth to a potential buyer. Keep in mind; there are plenty of Realtors out there who will tell you what you want to hear, which isn’t always the truth. Overpricing a home is part of how they get your house listed.

One of the first questions a buyer will ask their Realtor is, “How long has this home been on the market?” In fact, in today’s day and age, they usually find out themselves using websites like Zillow. If your home has been sitting on the market for an unusually long period of time, buyers will think something is wrong with your home!

Here’s a straightforward way to avoid overpricing your home. Interview three real estate agents and see what they think your home is worth. If two agents say it’s worth $400,000 and one says $500,000, then you know it’s closer to $400,000.

Your home is priced right; now what? Once you’ve concluded that price is not the problem, then you can move on to the next step in the process of elimination.

2. Condition of Home. 

What is the condition of your home?  For the most part, today’s homebuyers don’t want to buy your “project” — they’ll go down the street and buy a home that is “move-in ready.” I won’t go into too much detail here. Just watch HGTV and use some common sense. Don’t leave questions in the buyer’s mind about how much money it will take for them to move in. Replace carpet, paint, touch up, and clean! If you want top dollar for your house, then take any possible questions out of a buyer’s mind about the home’s condition. For everything a buyer has to do to make your home move-in ready, they will take thousands off an offer amount, and if you are lucky, you’ll get a low-ball offer.

If you want top dollar for your house, then take any possible questions out of a buyer’s mind about the home’s condition. For everything a buyer has to do to make your home move-in ready, they will take thousands off an offer amount … and if you are lucky, you’ll get a low-ball offer.  You can read more about how to prepare your house for sale here.

3. How Mistakes in Marketing Your House Will Decrease The Bottom Line.

How you market your home is huge! One of the biggest mistakes Realtors make when selling homes is that they don’t take the unique qualities of each and every home into consideration. Our job is to come up with a strategic marketing plan that will set your house apart from the competition and get qualified buyers in the door.

Gorgeous photography will get buyers in your home!

The biggest mistake I see Realtors make when marketing listings is using poor photography in their marketing. I got the inspiration to write this whole article based on a current listing on the market with another Realtor. The seller contacted me and wants to re-list the property with another agent because they are not happy with their traffic. The first thing I do is look at what other agents are not doing right! The photography was blurry and taken with a camera phone. You could hardly make out the photos. It’s a disgrace that this home has been on the market for six months with photos that look unprofessional.

If your home isn’t selling, then it’s time to look at these three components of what’s being done to move the property — and make a change if something’s not working.

If you are thinking of switching Realtors and are in the Tampa, St. Petersburg, or Clearwater areas, you can contact my team and me here.

Looking for more buying and selling tips? Head over to porch.com and check out their article from agents around the country.

The post 3 Reasons Your Home Won’t Sell | Is Switching Realtors The Answer? appeared first on The Tampa Real Estate Insider.

Stunning Rent Rises Might Open Way for Investors as Well as First-Home Buyers

As a Tampa Realtor working with clients who want to relocate from another city, I’m often asked about the pros and cons of buying versus renting. I recently did a blog post diving into the details of fresh studies showing that, in the Tampa real estate market, if you want to win financially in the long run, your best bet is to buy, not rent.

Now new figures have come along that shed more light on the region’s rental markets. This data holds value whether you’re making a personal life choice – a rent-or-buy calculation on the home front – or a decision as an investor researching whether renting out a home would provide a good financial return.

Rent Café is a nationwide apartment search website, part of Yardi. The organization provides original research, in-depth analysis and insights about real estate from city to city. Yardi’s research has turned up a solid five-year trendline showing that Florida, in contrast to nation’s hottest real estate markets, is showing rents going up, up, up.

One of the more dramatic examples is St. Petersburg, where the average rent increased by more than 9 percent over the past year. Over five years, St. Pete’s rents have spiked upward at a rate sharper than the nation’s. 

• A studio apartment that rented for $700 in 2013 commands a monthly rent of $865 today.
• A one-bedroom apartment that cost the renter about $800 in 2013 shot up to a monthly rent of more than $1,100 today.
• A landlord charging just a hair over $1,300 for a three-bedroom apartment in 2013 can ask more than $1,700 for the same unit today.

Search homes for sale in St. Pete here

Tampa rent trends show a similar pattern, but without St. Pete’s overall sharper spike.

• A studio costing around $600 in 2013 now goes for $835.
• A one-bedroom apartment that cost the renter about $800 in 2013, still about $100 a month cheaper than in St. Pete, costs the renter about $1,000 today.
• A landlord charging somewhat more than $1,300 for a three-bedroom apartment in 2013 (getting about $100 per month less than a landlord in St. Pete) can charge the renter more than $1,600 today.

Search Tampa Homes for Sale here

In none of the hot Florida markets that Yardi studied did rents decrease. Miami’s rent growth, at 2.4 percent, is much slower than Tampa’s or St. Pete’s, but Miami is still, of course, a more expensive city to live in. Average rent in Miami is $1,610, compared with St. Pete’s $1,258 and Tampa’s $1,217.

If you’re interested – and I know you are; everyone’s always fascinated by the price of properties in Florida – the most expensive cities for Florida’s renters are Fort Lauderdale and Miramar. Orlando falls No. 2 behind St. Pete on the list of cities with the fastest-growing rents in the Sunshine State. (Orlando’s growth rate is just over 6 percent.)

In comparison, cities where rents decreased include Charleston, South Carolina; Kansas City, Kansas; Lubbock, Texas; and two New York landmark addresses – Brooklyn and Manhattan. Smaller cities where rents decreased include Bakersfield, California; New Orleans; Tulsa, Oklahoma; and Pittsburgh.

More Reasons to Buy Now

As I reported in my earlier blog post, Tampa home seekers find it 45 percent cheaper to buy than to rent in the long run. Looking at the trends from another perspective – that of the potential investor – there’s much to suggest that the time is also ripe for buying an investment property.

So there’s yet another great reason to buy a home in the greater Tampa Bay area. If you ever need to move for any reason, it’s a good bet you’ll be able to capitalize on your house as a rental property in one of the rental markets in the country where rents grow fastest.

I welcome any comments or thoughts on this article. Please contact me here if you are wanting an agent to assist you with real estate in the Tampa Bay area.

See Also: Garden Apartments: Is this Apartment Type Right for You?

If you like this article, please share!

The post Average Rent Increases by More Than 9% in One Year -St. Pete, FL | Tampa Rising Up appeared first on The Tampa Real Estate Insider.

The rental conditions are very strong here in Tampa Bay.

Does it make sense to invest in real estate now and retire later?

What makes Tampa so great for real estate investors?

One reason we have a great market for investors is our close proximity to MacDill AFB. Military personnel have a guaranteed housing allowance and they usually rent before they buy.  Here is one neighborhood close to the Air Force Base here in Tampa

The second reason, and probably the strongest, is that major companies are relocating to our area by the droves and those people need a place to live before they purchase a home.

Now that you’ve heard of the positive side of being a landlord, here are some obstacles you may face:

Don’t count on buying a condo:

Many condos have restrictions on the percentage of renters vs. owner-occupied.  If the association has restrictions, the building is most likely at their maximum allowable rental capacity.  Most of the condos I’ve seen only allow 20% of the building to be allocated for rentals.  You’ll want to check with your Realtor first if you are thinking of investing in condos, as they may already have knowledge of which communities will allow rentals. Don’t be surprised if there are only a handful.

Here are a few that I have first-hand knowledge of that don’t have a cap on the percentage of rentals.

Currently, the Towers of Channelside in the up and coming Channelside district does not have restrictions on the percentage of rentals.

Another great community that you may want to check out is a 2/2 condo will rent for $1,800-$2,200 per month. You will not find a better location! Only 6 min to Tampa International Airport, and 30 min to St. Pete Beach!

Another popular area in Tampa is along Tampa Bay called Bayshore Blvd. These condos are right on the water and can be rented as well. Sorry, no Air BnB. A 7-month lease is the minimum time requirement. More about Air BnB rentals in a later post.

How much will I need to put down?

You need 25% to put down on Condos if it’s going to be used as an investment property.  There is an exception if the development has a portfolio lender that is willing to finance a larger amount.

If you only have 5% or 10% to put down, a Single-family home would be a better option for buying an investment property. It just makes sense when you consider it will be easier to get a loan, and there are no restrictions on rentals.  You’ll want to double-check if the house is located in a mandatory homeowner’s association, as sometimes they can enforce restrictions on lease terms.

What can I rent the home for? Here’s an example of home Rental Rates for Tampa.  Remember that these are only averages and the actual rental amount will be greatly influenced by school districts and close proximity to beaches, downtown, and the airport.

A more in-depth report showing average rental rates and trends in both Tampa and St. Pete can be found here: Stunning Rent Rises Might Open Way for Investors as Well as First-Home Buyers

You can search all our MLS Listings here to get an idea of what homes cost in the Tampa, St. Pete, and Clearwater areas.

Want to talk to a Realtor about buying an investment property in Tampa? Give us a holler!

Related articles

Tampa Real Estate Investing: 10 Reasons Buying In Florida Is A No-Brainer!

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3 Things to Know about Tampa’s Hot Housing Market 

Predictions  Include a Low Housing Inventory that Keeps Hanging On

It might seem counterintuitive given the strange times of this pandemic, but I’m projecting that our current housing shortage will not change anytime soon. So if you are waiting for a better time to buy or sell, you may be in for a long wait. Buyers, especially, may be burned if they think a bargain may materialize if they just give it time. 

Here are three key reasons to make your move now:

Tampa is a hot market. As part of its annual housing forecast, Realtor.com evaluated 100 metro areas. Tampa turned up in the Top 10 in terms of year-over-year price growth expected in 2021. Price growth could jump 7.5%, putting Tampa ahead of Miami, Orlando and Jacksonville. Tampa is also in the top third of all metro areas in projected growth in year-over-year sales.  

Inventory is still low. Lack of housing is a long-term nationwide problem with roots in the great recession beginning in 2007. Literally thousands of subcontractors got out of the construction business, and in the following dozen years, they never came back. The U.S. ran a deficit of about 400,000 homes per year. We’re still not caught back up – nationally or in the greater Tampa area.

Some COVID realities are here to stay. Here is an interesting observation from Daryl Fairweather, chief economist at Redfin, quoted in Fortune magazine late last year: “So long as the pandemic goes on, I think we will see more demand at the top of the market because those are the people who are getting word from their employers that they can work from home as long as they want.” A second expert quoted in the same article said, “The whole pandemic changed the way we think about work/life balance. You factor in lower interest rates, better purchasing power, the millennial population coming in, the first-time homebuyers—it feels like the perfect storm, all these things influencing strong buyer demand.”

More National Trends 

You may have read a recent Wall Street Journal story about people who rushed to buy houses when COVID hit, then regretted it. Some ended up disliking the house they bought. Others rushed into a deal without due diligence and found problems that forced them to resell the home quickly. Still others experienced a drying up of income and could no longer afford the house. 

My take on the WSJ story: Even if all those in the latter category end up in foreclosure, that still wouldn’t put enough homes back on the market to fulfill current demand. And NEVER rush into a deal! That’s why you need the help of a Realtor like me. Whether you’re a buyer or a seller, we help you uncover problems before you’re in too deep. 

Meanwhile, CNBC’s Jim Cramer is characterizing the U.S. housing market as booming – not in the way of a bubble soon to crash, but more as a sign of strength in the economy. Mortgage standards are back up to snuff, and many Americans are saving, not spending, during the pandemic. He sees the ripple effect of a strong housing market doing good things for companies like Lowe’s and Home Depot and home-décor businesses. Home Warranty Providers are also expected to feel this increase in demand and even car companies may benefit as people move to the suburbs or out in the country. “Workers able to work from home may place less value on a shorter commute and move farther from the office,” says a report from the Federal Reserve Bank of St. Louis.

Bringing It Home

What does all of this mean for you? Back to the Realtor.com forecast. The headline is that sellers will get top dollar, while buyers still struggle for affordability. The time for sellers to act is now, with Tampa projected to have one of the highest home price hikes in the country. Paradoxically, the time for buyers to act is also now. The housing shortage is continuing and real.

If you are interested in buying or selling a home anywhere in Tampa Bay, you can reach me here!

Get your home evaluation here!

The post Any End In Sight for Tampa’s Housing Market Shortage? Forecast.. appeared first on The Tampa Real Estate Insider.

Today’s guest blog post is from a home inspection company here in Tampa. Please check out what they have to say about the myths of a home inspection, what you should expect from a top-notch home inspection company and the overall process of a home inspection.

There are a lot of myths and misconceptions surrounding the home inspection. In this blog post, we will dispel some of those myths and establish the facts.

Myth #1: The home inspection is pass/fail.

A common myth among home buyers is that the home inspection is pass/fail. Those that believe this think that in order to purchase a house, it must first pass the home inspection. Alternatively, if the home fails the home inspection, they will no longer be able to purchase the home.

The truth is, home inspectors do not determine whether a house passes or fails the home inspection. Instead, home inspectors evaluate the condition of a home and report on the defects present. Ultimately, it is the buyer’s decision whether or not to buy the house.

Myth #2: Home Inspectors determine if a house is up to code.

Some buyers believe that home inspectors determine if a house is up to code. While home inspectors sometimes refer to code during their inspections, a home inspection should not be confused with a code inspection.

During a home inspection, home inspectors are looking for defects that could affect the safety of your family or the value of your home. Code inspections, on the other hand, look for compliance with certain building standards. Just because something is not up to code, does not inherently make it a home inspection defect.

Myth #3: The seller will repair every defect the home inspector finds.

While the home inspection report can be used as an effective negotiating tool, it does not mean sellers will repair every defect the home inspector finds. In fact, sellers are not obligated to make any repairs if your agent is using an as-is contract.

When negotiating home inspection defects, focus on issues that could be costly to repair. Minor problems like missing caulking or peeling paint can be addressed after you purchase the home.

Myth #4: New construction homes don’t have to be inspected.

Another myth about the home inspection is that new construction homes do not have to be inspected. These buyers assume that since everything is new, there is no need for a home inspection.

Truth is, new construction homes can have serious defects that could be costly to repair. Problems occur when a builder cut corners, manufacturer’s recommendations are not followed, or workers simply make mistakes.

Myth #5: Home Inspectors determine the value of a house.

Some buyer’s believe that home inspectors determine the value of a home. This is actually the job of the appraiser. The appraisal is usually done after the home inspection by a Certified Appraiser. Appraisers research home sales in the area, the condition of the property, and the physical characteristics to determine a fair market value.

While there is some overlap, the focus of the home inspection is the condition of the home and the focus of the appraisal is the value of the property.

Myth #6: Home Inspectors check for termites.

While this is true in some states, inspecting for termites requires a Pest Control license in Florida. This means that termite inspections have to be performed by a pest control company.

If you are in the process of buying a home, a termite inspection is strongly recommended. Termites account for almost $2 billion dollars in property damage every year and most of that damage occurs in the Southeastern United States where termites are the most prevalent.

Author: Cristhian Perez

Cristhian Perez is a licensed home inspector at Home Check Inspections — a top rated home inspection company serving Hillsborough, Pinellas, Pasco, Polk, Sarasota, and Manatee counties. Since 2015, Home Check has been dedicated to helping home buyers get the facts about their homes.

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Contact me if you are thinking of buying or selling a home anywhere in the Tampa, St. Pete or Clearwater areas

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“To Disclose or Not Disclose When Selling a Home”

Seller Liability for Non-Disclosure of Known Defects

By: Charles R. Gallagher III

It is a decision that every seller of real property is burdened with, to disclose, or not disclose….damage, defects or other problems with the property.  Charged with knowledge and a history of the property, the law imposes a duty upon sellers to provide the buyer with a candid assessment of the condition of the real property, for their due diligence purposes, even if it jeopardizes closing the deal.

Typically, this disclosure arises in connection with a Seller’s Property Disclosure Statement furnished to prospective buyers prior to any offer.  The Florida Association of Realtors disclosure form lists a variety of areas for the seller address the condition of the property, requiring an affirmative or negative response with explanation.  However, sellers can also disclose information on the condition of the property orally or in a less formal writing.

Disclose What You Know

Under Florida law, a seller must disclose all known defects or damage to their property.  Non-disclosure of known defects or damage is actionable and commonly known as a “Johnson v. Davis” action.  A Johnson v. Davis action for non-disclosure, requires that a buyer must plead: “[W]here the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer.” Johnson v. Davis, 487 So. 2d 625 (Fla.1986).

In other words, “[a] nondisclosure claim under Johnson has four elements:

(1) the seller of a home must have knowledge of a defect in the property,

(2) the defect must materially affect the value of the property,

(3) the defect must be not readily observable and must be unknown to the buyer, and

(4) the buyer must establish that the seller failed to disclose the defect to the buyer.”

See Jensen v. Bailey, 76 So. 3d 980 (Fla 2d DCA 2011).

We frequently litigate these matters and recently resolved a case where a seller had actual knowledge of an unrepaired sinkhole present at their property and failed to inform the buyers of the same.  The buyers closed on the property later finding cosmetically repaired and hidden cracks.  Once the buyers found out about the non-disclosed sinkhole they brought suit on the grounds that it was known defect.  The Court applied the Johnson standard echoing the obligation of the seller to disclose what it knew.

We are currently involved in a case defending the realtor and brokerage where a buyer brought suit for nondisclosure, where neither the seller nor realtor had knowledge of the alleged termite damage.  Here the Court has repeatedly dismissed the buyer’s lawsuit given the absence of knowledge by the realtor.

In determining the judgment call of whether to disclose or not disclose, there is helpful test laid out by Johnson; does the damage or defect “materially affect the value of the property.”  Applying that test to the damage or defect will allow for a candid disclosure as to the condition of the property.          

Actual Knowledge of Defect

But what if you should have known of the defect?  Sellers are protected from liability where the defect is unknown.  Florida law requires actual knowledge and a seller will not be held liable for a defect which it should have known or constructive knowledge.  Actual knowledge of the defect is required for a seller to be liable for non-disclosure of the defect.  Jensen v. Bailey, 76 So. 3d 980, 984 (Fla. 2d DCA 2011).  Sellers who are legitimately unaware of defect will not be liable for non-disclosure.

Under that same logic, constructive knowledge of the alleged defect and damage is insufficient to hold a seller liable for non-disclosure. Florida case law explains the reason a claim for nondisclosure must be based on actual knowledge of the alleged defect is to prevent converting those involved in selling the property into guarantors of the condition of the property.

“As Is” Contract Does Not Relieve Disclosure Obligation

“Not to worry, it was an “As Is” Contract”, you might think.  To the contrary, a seller’s disclosure obligations are not relieved by using an “As Is” Contract under Florida law.  

In Solorzano v. First Union Mortg. Corp., 896 So.2d 847 (Fla. 4th DCA 2005) the court held that the inclusion of an “as is” clause in a contract for the sale of residential real property does not waive the duty imposed upon a seller under Johnson. See also Syvrud v. Today Real Estate, Inc., 858 So.2d 1125, 1130 (Fla. 2d DCA 2003).  Courts have also held that an “as is” clause in a contract for sale of real property cannot be relied upon to bar a claim for fraudulent misrepresentation or fraudulent nondisclosure.

Johnson Applies to Seller’s Realtors

The duty to disclose what you know is not limited to sellers and applies to realtors.  In Syvrud v. Today Real Estate, Inc., 858 So.2d 1125, 1129 (Fla. 2d DCA 2003), the court extended the Johnson duty to disclose to the seller’s real estate broker under a negligence theory.  There, purchasers of a condominium, brought action against seller for damages related to structural defects in the condominium.  The court that the contract did not relieve the listing broker of the duty to disclose known hidden defects within the structure of premises.  The distinguishing fact here involves the realtor’s actual knowledge of the defect and failure to inform the buyer of the same.

Best Practices for Sellers and Buyers

It is always advisable to consult with an experienced realtor on all real estate transactions to navigate you through the entire sale process.  In the event you have questions about your disclosure requirements or your transaction includes legal issues, it is also prudent to obtain the assistance of an experienced real estate attorney.

To avoid liability for non-disclosure, Sellers are well advised to carefully review and candidly prepare their Seller’s Property Disclosure Statement.  If it’s a close call, err on the side of disclosing it.  Don’t expect that significant obvious damage or defect will escape the eye of a buyer, their realtor, and their inspectors.  Allow the buyers as long as they want to inspect the property.  Be open and candid with any questions they may have.  Finally ask yourself, does this damage “materially affect the value of the property?”  While this can be a stressful time, defer to the guidance and judgment of your realtor during this process.  

To protect your purchase and avoid buying a damaged home, Buyers are well advised to spend sufficient time inspecting the home and property during daylight, when the power and utilities are on.  Research public records (including property appraiser’s records, tax collectors records, public records for sales/conveyances and court records) to determine if there were anomalies, claims or lawsuits regarding the property.  You might find construction litigation against a builder or an insurance claim against the insurer.  You might find the taxable value to be reduced due to the presence of a sinkhole.  You might find unqualified sales or sales at a salvage rate.  Obtain a survey, secure a home inspector and termite inspector to report on the condition of the property.  Use your due diligence period to investigate and research.  As with sellers, defer to the judgment and guidance of your realtor during this transaction.

As they say, an ounce of prevention is worth a pound of cure.  Whether you are a buyer or seller, adequate preparations and investigation in connection with the disclosure requirements of a home sale will save you time and money in the long run.  Should you have any questions about your obligations, feel free to contact the attorneys at Gallagher & Associates Law Firm, P.A.

Thinking of selling your home? You may contact me here, or call me at 813-784-7744. I hope you found this article useful and please feel free to share with your friends!

Charles R. Gallagher III is the founder and principal of Gallagher & Associates Law Firm, P.A., a concierge legal practice in St. Petersburg, Florida.  His practice includes real estate, foreclosure defense, consumer law, real and business litigation and insurance litigation.  Mr. Gallagher is a graduate of Rollins College and Stetson University College of Law.  He is a graduate of Leadership St. Pete and was selected as a Rising Star by Florida Super Lawyers and selected as an “Up and Comer” by the Tampa Bay Business Journal.  He frequently lectures and serves as a media commentator on legal topics.  More information about G&A is available at www.attorneyoffices.org, Twitter: @GallagherLaw or Facebook/GallagherLaw.

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