Southwest Florida Title Insurance & Real Estate Blog

It’s that time of year . . . you know . . . to be scared of scary things. We see a lot of scary things in real estate . . . a lot of scary things. But it’s our job to shield you from those menacing figures. If my 10 year old daughter were writing this, she would say that in Harry Potter terms, we are the Patronus that casts away real estate’s Dementors. The spell we’re casting here is to warn you about the pitfalls associated with purchasing a tax deed. Although tax deed sales can be lucrative investments, they bear with them a certain element of risk.

Tax deed sales in a nutshell:  Owner of real property fails to pay property taxes. Third party investors buy “tax certificates,” which they do so that they may collect a bit of interest on the payment. Those certificates, if not redeemed, can after time result in the investor’s application for tax deed. That application, under certain circumstances, results in a tax deed sale and the investor earning the “deed” to the property. Give us a call if you want more details. Again, nutshell version here.

The point of this post is to give you very useful insight into what tax deeds look like from our wizardly title insurance perspective. After all, if you purchase a tax deed, you’re likely interested in selling the interest in the property at some point. At that point, you’re going to have to jump through some hoops in order to do so in such a way that is acceptable or marketable, as we say, to a savvy buyer. Here are those steps and what they could mean to you or your investor clients.

Read the rest of this entry »

We are tremendously excited to announce that construction has begun on Winged Foot Title’s new home!

Winged Foot Title (well, a separate entity actually) purchased the old Palm Printing building, located at the corner of Jackson Street and Dr. Martin Luther King Jr. Blvd., earlier this year in March. With all the planning and permitting finally in place, the first hammer fell yesterday and the Winged Foot Title team took a field trip to snap some before pictures and to take the obligatory selfie.

At the corner of Jackson & MLK, Winged Foot Title will be a part of the revitalized and ever-growing Downtown City of Ft. Myers. This location also provides the utmost convenience for our southwest Florida clients, with easy access from Cape Coral, North Fort Myers, Lehigh Acres and points east like as well as points farther north and south because of our proximity to I-75. We’re already ALL SMILES about being here!

Our reception area will be at the northwest corner of the building, and two beautifully appointed, modern yet comfortable conference rooms will be nearby.

Our office hub will be located here (left). This picture was taken facing south. Ten private offices will line the periphery of the interior space. We have retained the center space for a flexible and open work space as well as a space to accommodate educational seminars and meetings for up to 50 guests very comfortably. Where the team is standing we’ll have a kitchen, bar (we are in the real estate business after all!!!) and dining area.

Of the almost 6,000 total square feet, Winged Foot will occupy about 3,950 on the north side. So, we’ll have another approximately 1,880 square feet for lease. This unit, like the rest of the building, will have newly cut windows and will have its own signage and entrance on the southwestern corner of the building.

It’s not much to look at at the moment. But everything’s coming out and the exterior will get a much-needed facelift, with new stucco, windows, aluminum awnings and cool entrance feature. One of the nicest things about the new location is the neighboring park.

To our east is Bennett-Hart Park, which our guests, clients and team members will get to enjoy.

We’ll look forward to continuously updating you on the project’s progress. Should you have any questions for us in the meantime, please don’t hesitate to call or email.

Last month the team at Winged Foot Title was able to donate $310 to the Children’s Home Society of Southwest Florida. And we’re keeping it with the kids in September, which happens to be Childhood Cancer Awareness Month.

In 2000, Alex Scott set up a lemonade stand in her front yard and raised $2,000 to fight childhood cancer. She was four. Some three years earlier, Alex had been diagnosed with neuroblastoma. By eight, when that childhood cancer took Alex’s life, she had raised $1,000,000. Alex’s full story.

Alex’s Lemonade Stand Foundation for Childhood Cancer was formed on Alex’s ninth birthday in 2005. Since then, the foundation has raised “more than $127 million . . . to:

• Fund more than 650 cutting-edge research projects

• Create a travel program to help support families of children receiving treatment

• Develop resources to help people everywhere affected by childhood cancer.”

In memory of Alex and in support of our friends, family and customers who have been touched by childhood cancer, we are honored to support Alex’s foundation this September. As always, a portion of every closing will be donated to ALSF. In the meantime, we encourage you to check out http://www.alexslemonade.org/ and GET INVOLVED. You can also engage with ALSF on social media (Facebook; Twitter; YouTube; Instagram; Pinterest; and, LinkedIn). Let’s all like, share and contribute our way to fighting childhood cancer.

It’s time for another installment of #ClosingWithACause. This month, we’re going back to the well in support of a team favorite local non-profit – the Gulf Coast Humane Society. We will donate a portion of our revenue from June to the GCHS.

If you aren’t familiar, GCHS is a “no-kill, animal welfare organization.” It has an adoption center, spay and neuter veterinary clinic, and educates the public about abandoned pets. GCHS receives NO funding from the US Humane Societs or the ASPCA, which makes our donations and YOURS all the more special. Take a few minutes and learn more about GCHS:

And THANK YOU, as always, for your support of Winged Foot Title and our charity of the month.

We are absolutely thrilled to announce our support of summer campers at the Alliance for the Arts. During the month of May, a portion of our revenue from every real estate closing will be donated to the Alliance to fund scholarships for summer camp tuition.

“The Alliance for the Arts is the state designated arts agency for Lee County; a member supported non-profit with a passion to facilitate and nurture the creation, development, promotion, and education of arts and culture.” There is no place better to witness the Alliance’s fulfillment of that passion than at its Summer Arts Camps. Kids aged 5 to 12 from all walks of life fill the Alliance eight weeks during the summer, lifting their voices, moving their feet and creating an array of visual arts. And each week culminates final stage performances which are an absolute riot. Take a look for yourself.

We are sold on the arts and their positive impact on the children of Southwest Florida. Here’s proof. If you’d like to learn more about the Alliance, check them out at ArtInLee.org. Thanks so much for your support! Oh, and the kids say thanks too!

Welcome back! In Part 1 of “Tax Prorations Explained for Florida Real Estate Closings” we looked at WHY we prorate taxes and the contractual rules by which we typically prorate. Now let’s look at how to understand how those prorations work.

Cont’d.  3.  Which accounting period is used?

Florida real estate taxes often include different types of taxes and assessments. For example, we have ad valorem taxes, which are based on the appraised value of the real property; and, we have non-ad valorem taxes, which are based on other elements. These taxes and assessments are sometimes assessed by their taxing authorities on different accounting periods. Some use the calendar year while others use a fiscal calendar.

This is where things can begin to get understandably confusing. When we prorate, we must use the proper accounting period for each tax and assessment. In the example above, ad valorem taxes are assessed on the calendar year – from January 1 through December 31. And the Lee County Solid Waste Assessment, as you see below, is assessed on a fiscal calendar from October 1 through Septmeber 30. In our experience, taxing authorities who use a fiscal calendar for accounting typically use October 1 through September 30. You should take note here that the typical fiscal calendar uses an end date that could extend into the year after your closing.

Irrespective of the accounting periods, all of these taxes are payable with  your current year’s tax bill. In Florida, taxes for the current year are due and become a lien on real property on November 1. Make sense? If not, please let us know! So, knowing the taxing authority’s accounting period for a given tax or assessment is an integral part of getting your prorations right.

4.  When is your closing date?

Remember when we talked about the contractual provision that prescribes how we are to prorate taxes at closing? It says that taxes and assessments shall be prorated “as of the day before Closing.” This is of course important because it tells us the “through date” for the prorations. Simple enough. If you have used the standard form FAR form and your closing is on October 29, 2015, the prorations made at closing would be made through October 28.

5.  What is the amount of the assessment to be prorated?

Our contract says that we must use the actual tax or assessment; or, if that amount cannot be determined, we must use the amount from the preceding year as an estimate. To determine the right amount, we have to use both the accounting period and closing date. We can make some generalizations based on what we’ve discussed so far.

If your closing is between January 1 and September 30, you would estimate the amount of the ad valorem taxes (calendar year) based on the preceding year’s amount; and, you would be able to use the actual amount for any non-ad valorem assessments accounted for on a fiscal calendar.

If your closing is between October 1 and October 31, you would estimate the amount of all taxes and assessments based on the preceding year’s amount.

And if your closing is between November 1 and December 31, you would be able to determine the exact amount of all taxes and assessment by reviewing the current year’s tax bill.

6.  Are the assessments paid or unpaid at closing?

This is another crucial question which we must answer in order to prorate properly at closing. If the assessments have been PAID by the owner/seller at or prior to the closing, then the seller will receive a credit from the buyer for days during which the buyer will have owned the property but for which the seller had paid. On the other hand, when an assessment or tax has NOT BEEN PAID at or prior to closing, the buyer will receive a credit from the owner/seller for the days during which the seller owned the property but for which the buyer will pay in the future.

7.  Calculating tax prorations for closing.

Have a headache yet? Thought so. Hopefully this will simplify things for you. The image below is a screenshot of our title processing software’s proration section. It should provide a clear example of how our system does the math based on the variables we’ve discussed thus far. Let’s explore a little using our must-ask questions.

What accounting period is used?

See the “time period” column? That is the accounting period. Here, we’re dealing with two periods – Jan – Dec & Oct -Sep. See that?

What is your closing date?

The closing date is reflected in the “thru” column. Here, that’s Oct. 28, 2015; and, that will be the date through which our prorations are made. The “time period” and “thru” date result in the “days” which will be prorated.

What is the amount of the assessment/tax to be prorated?

The total amount, not surprisingly, is located in the “Total” column.

Are the assessment paid or unpaid at closing?

Important question! You’ll see two sections in our software with the blue headers – a section for “Items Paid by Seller in Advance . . .” and a section for “Items Not Paid by Seller . . . .” With our closing date of October 28th, it so happens that ALL of the applicable taxes and assessments are NOT PAID at closing; therefore, the seller will credit the buyer the amounts in the last column – “Proration.”

Let’s look at the 2015 Ad Valorem taxes in detail. The actual amount of the taxes is $4,779.65; the taxes are assessed on a calendar year from Jan through Dec (365 days). Based on those numbers, getting the per diem (i.e., the per day amount) for our calculations is easy – divide $4,779.65 by 365 = $13.0949/day. Luckily, the system counts the number of days from Jan 1 through Oct 28 – 301. So, 301 times $13.0949 = $3,941.57 (rounded). So . . . the seller will credit the buyer that amount on the settlement statement at closing.

Make sense? We sure do hope so. We also know that this is a lot of information. If you have questions about your taxes and prorations at closing, please don’t hesitate to call us at 239-985-4142 or contact us online. Until next time!

It’s that time of year! Real property taxes in Florida will be assessed any day now. Until they are, calculating tax  prorations at closing can be a confusing affair. If you are curious about how tax prorations should work for your closing, please read on.

1.  Why we do Tax Prorations for Florida closings.

The main reason we prorate taxes at closing is because your contract demands it. More on that in just a bit. The rationale for this type of contract provision is pretty simple. At closing, the Seller might have paid taxes for a period that extends past the closing date. In this case, the Buyer should credit the Seller for the days during which the Buyer will have owned the property but for which the Seller paid. Alternatively, taxes may be unpaid for a period during which the Seller owned the property but for which the Seller could not have paid because many of our assessments in Florida are paid in arrears. In this case, the Seller should credit the Buyer for that period during which the Seller owned the property but for which the Buyer will pay when that tax becomes due and payable. Make sense? If not, please contact us and we’ll go through it with you.

2. What does your Florida real estate contract say?

It is very likely that your contract demands that certain items be prorated at closing. (Note: If it doesn’t, then there wouldn’t necessarily be any reason to prorate taxes at closing). Most of our Florida residential real estate transactions are controlled by the standard form(s) promulgated by the Florida Association of REALTORS®. The latest form (CRSP-14 as of 9/2015) says the following about prorations: Read the rest of this entry »

August was a great month. We were able to donate $350.00 to the Candlelighters of Southwest Florida, whose mission is “to provide support, education and assistance to families of children with cancer or blood disorders and the professionals who care for them.”

Gulf Coast Humane Society

We are delighted to announce that this month’s charity will be Gulf Coast Humane Society. From the discussion at our most recent team meeting, it is clear that everyone in the Winged Foot Title office has been touched in some way by GCHS. GCHS provides adoption services and veterinary care (even to the public!) and does so without any federal or state support. Check out this video to learn a bit more about GCHS and how you may be able to help.

We would love to learn about your experience with GCHS or a similar provider. Have you adopted, donated or volunteered? Please share your story in the comments below. And thank you for helping us to support this great organization!

In June, Winged Foot Title raised $400 for the Children’s Home Society of Florida. What a great cause! This month, a member of our team and a veteran herself recommended that we do something for the Florida Veterans Foundation. A portion of this month’s revenue will go directly to the Foundation.

A “Direct Support Organization” of the Florida Department of Veterans’ Affairs, “[t]he FVF serves, supports, and advocates for Florida veterans to improve their well being.” Here’s a great example of what the Foundation does from its website:

“I sometimes stayed in my car with my girls.”

It’s Friday, a typically busy day for us in the title business. We have five loan closings on the schedule – five families about to complete the home buying journey. This should be an awesome day! The awesomeness, though, is already tarnished. Why? Great question! And the answer is why we are sorely disappointed that the CFPB has decided to kick the TRID can down the road.

TRID delay keeps closing tables empty . . . .

Of the five loan closings on our schedule today, only one is ready to go. That’s right . . . only one. On the other four, we are still waiting for closing instructions and documents from the buyers’ lenders. That means that four eager home buyers do not know whether or not they will be able to close today. Four eager home buyers do not know how much money they need to wire to complete their purchase. Four eager home buyers do not know whether they will be able to unload their moving trucks today. This scenario creates tons of stress for consumers, who should feel nothing but excitement about their closing. Yet it happens every day; and it is, by far, the worst part of what we do – having no control over something that causes unsuspecting consumers so much stress.

For us, the best part of the new TILA-RESPA Integrated Disclosures (TRID) rule addresses this annoying and stress-inducing phenomenon. Initially effective on any loan application made on or after August 1, 2015, TRID requires creditors (mortgage lenders) to deliver the Closing Disclosure form to consumers (buyers/borrowers) at least 3 days prior to “consummation” (under the final rule, the Closing Disclosure replaces the HUD-1 settlement statement and the final Truth in Lending Disclosure). That means no more Fridays like today; no more poor buyers waiting helplessly on the day of closing for final figures; and it should mean improved experiences for every party to the transaction. Because of that, we were really looking forward to the implementation of the rule, warts and all.

On Wednesday, the Consumer Financial Protection Bureau announced that it would delay the effective date of the rule to October. Most of our industries’ advocacy groups have heralded the decision as ideal for consumers, the thought being that the complexity of the changes would interfere with closings. No doubt, there will be some hiccups. They’ll be there in October as well. In the meantime, we’ll be here, with empty closing tables, waiting for closing instructions and helping to manage buyers’ stress.