One question I get with less frequency but still very often is…

What’s the minimum credit score I need to get a loan?

The answer is much more complex than you might think even when looking at a single loan product like a Fannie Mae of Freddie Mac (a/k/a Conforming) loan. CLICK HERE for a link to the Fannie Mae Eligibility Matrix.  Jumbo Loan products vary from lender to lender depending upon who is buying the debt in the secondary market.  We will focus on Fannie Mae loans as conforming loans represent the majority of all new loans being under written and Fannie Mae does most of these.

First, when the say a ‘Credit Score’ they are referring to your FICO credit score.

This chart can take a bit of getting used to but let’s look at 2 examples:

1) If you want to borrow up to 95% of the purchase price for a property you intend to occupy as your primary residence then you must have a credit score above 680 if you intend to borrow between 76 and 95% of the purchase price.  If you are borrowing 75% or less of the purchase price then you must have a credit score greater than 620.  Both of the assume a Debt:Income ration lower than, or equal to 36%.

2) If you want to borrow up to 90% of the purchase price for a property you do NOT intend to occupy as your primary residence then you must have a credit score above 680 if you intend to borrow between 76 and 90% of the purchase price.  If you are borrowing 75% or less of the purchase price then you must have a credit score greater that 640.  Both of the assume a Debt:Income ration lower than, or equal to, 36%

Here’s a question that is not asked nearly enough.  What duties and obligations can I expect from my real estate agent in Florida?  Note that this question is NOT what can I expect from my Realtor because as a Realtor we adhere to the Code of Ethics.  The Code of Ethics are the rules of a trade organization but Agency is the law in Florida.

There are a few instances to watch what you say to the Broker/Agent. The big one is when you go with your agent to view a property and the listing agent (the agent for the Owner) is there. Do NOT say anything in front of them which would affect your ability to negotiate.  This is because the limited confidentialty only applies to an agent acting as a Transactional Broker but you MAY NOT KNOW the agency relationship of the Broker NOT representing you. Even if they are acting as transaction broker most agents will tell their customer whatever you say. So remember don’t say anything while you’re in front of the other agent.

The other one is when you are looking to buy a new home directly from the builder.  These are typically licensed agents and many times they’re also Realtors (but not always so they may not adher to the Code Of Ethics) BUT they are in a Single Agency Relationship with the Owner of the community.  The sales people at Toll Brothers, Lennar or whereever that work at the sales center on site are there representing the interests of the developer and NOT YOURS.  DO NOT TELL THEM ANYTHING ABOUT YOUR BARGAINING POSITION. You’ll see a small sign someplace that tells you this but you’ll have to to look to find it.

A few years ago all this agency law changed.  Today the consumer (the Buyer or the Seller) may assume (except as noted above and few other instances listed below) that the agent is acting in a Transaction Brokerage Relationship. This is true UNLESS and UNTILL another Agency Relationship is established in writing. So until you sign something, and the exception oted above like wehn you fo to a builders sales center, that you are speaking to an agent who is acting as a Transactional Broker. So first, what’s that?

TRANSACTION BROKER RELATIONSHIP—A transaction broker provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. The duties of the real estate licensee in this limited form of representation include the following:

Most brokerage firms use this form of representation exclusivly because there is NO fiduciary relationship and thus one party can not be held accountable for the action or inaction of the other party.  However there are instances where there is a Single Agency relationship between the Broker and the either the Buyer or the Seller.  But NEVER both.

SINGLE AGENT RELATIONSHIP—The duties of a real estate licensee owed to a buyer or seller who engages the real estate licensee as a single agent include the following:

So, there are a few exceptions to discuss but generally, the real estate disclosure requirements of this section do not apply when a licensee knows that the potential seller or buyer is represented by a single agent or a transaction broker; or when an owner is selling new residential units built by the owner and the circumstances or setting should reasonably inform the potential buyer that the owner’s employee or single agent is acting on behalf of the owner, whether because of the location of the sales office or because of office signage or placards or identification badges worn by the owner’s employee or single agent.

Here’s another question I get all the time:  Chris what’s a (insert) loan all about?

CONVENTIONAL OR CONFORMING – This is a loan which would conform to the underwriting guidelines or either Fannie Mae (www.fanniemae.com) or Freddie Mac (https://www.freddiemac.com/).  These are what most people will obtain as a mortgage but there are some limits on them.  The big one is that these loans can not be for more than a certain amount which is specified each year by location.  I just looked up the 2015 conforming loan limit for Palm Beach County and it’s $417,000.  Typically Buyers will want to put down 20% of the purchase price to avoid the mortgage insurance premium and thus the maximum purchase price would be 417/0.8=521,250 but if the qualify lesser down payment options (as little as a 3%) then the maximum purchase price would be 417/0.97=429,897.

Conventional – 3% Down Payment.  If at least one of the buyers is a first time Homebuyer, and has a FICO as low as 620 they may be able to buy a home with only 3% down payment.  The definition of a First Time Homebuyer is a buyer that has not owned a home is the past 3 years, which makes this program open to most buyers.

There is now a 4 year waiting period for a Buyer who has a short sale on their record before they can qualify for a conforming loan.  Unless there were “extenuating circumstances” and then the borrower may be eligable after only 2 years.  Extenuating circumstances are nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.  In many cases, extenuating circumstances are required for a creditor to have agreed to the preforeclosure sale or deed-in-lieu of foreclosure; therefore, many borrowers will be eligible under the shorter waiting period.

Fannie Mae Elligability

JUMBO – A jumbo loan is one for more than the conforming loan limit for the specific area.  Again, in 2015 in Palm Beach County this is 417k and thus if you need to borrow more than this then the loan is a considered a Jumbo.  Welcome to the big leagues and get ready for some close scrutiny of your application.  These loans are not purchased by the governemnt so the under writing requirements vary.

FHA – 3.5% Down Payment

For a buyer purchasing a $250,000 home, the borrower will save about $100 per month due to reduced MIP in effect as of today!

By the way, FHA rates are also typically lower than conventional loans with 3-5% down payment.

Also, a buyer with a prior short sale can typically buy a home after 3 years using FHA Financing.

VA – NO Down Payment

Don’t forget to ask your buyers if they are a Veteran. If they are an eligible Veteran, they may be able to purchase a home with no down payment.

What are my rights if I own a waterfront property?

CLICK HERE to read my updated blog posting on this and how to tell which one it is for a particular property.

There are two large sub sets to the answer to this question.  Does the uplands have riparian rights?

If the water over the submerged land was NOT historically navigable, as in when the state was created, then someone owns the land below that water column.  Someone, at some point in time, created a sea wall and dug out in front of it to allow water to cover or submerge the land.  This land is owned by someone (usually a Home Owners Association), it may or may not have a parcel ID and it’s most likely taxed.  If you own land on a canal that looks man made then it probably was and you may or may not have an easement over the submerged land by virtue of your Home Owners Association documents or other recorded documents.  Much of the intracoastal waterway in this area is over land which an easement was taken.

By contract a property is said to have Riparian rights if abuts water and the submerged land which WAS historically navigable.  Think rivers and lakes.  These upland properties do NOT own any land under the water nor do they own any land in between the high and low water called the inter tidal zone.  The upland property owners riparian rights include the rights of ingress, egress, boating, bathing, fishing and even the right to an unobstructed view of the water abutting their land.  The right to an unobstructed view is somewhat unique to Florida riparian property owners.  The owner of a riparian property has the right to get out to the navigable water which is about 4′ of depth or the first marked channel.  The state will in essence grant you a permit to place a dock on the submerged land to get you from your uplands to the navigable water.

One big difference between these two is that one can get title insurance on a littoral rights land.  I copied this from the the ‘The Fund’ title insurance underwriters handbook…

“C. Boat Slips/Docks:
Under circumstances in which the insured appurtenance consists of a boat slip or dock, the FUND member should be mindful of the possible ownership interest of the State of Florida in the submerged lands underlying the slip or dock. The member should confirm that the submerged lands are privately owned. In addition, title policies issued must contain exceptions for the rights of the public to use the navigable waters covering the lands and the rights of the State of Florida and the
USA to regulate the use of the navigable waters, under TN 32.01.01(B)(1). Further, exception for riparian and littoral rights (TN 32.02.01) should be made and the possible application of the Navigational Servitude Exception (TN 32.02.03) evaluated. In the event that private ownership of the bottomlands cannot be confirmed, the slip/dock should not be insured.”

So, if you buying a dock in say Mariners Cove then it has a parcel ID, it’s a littoral area, one can get title insurance on it and thus it’s financeable.  But if your buying a dock in say Twelve Oaks then this is an ownership in the Marina Association with an exclusive right to use say Dock X-X.  The marina is built on what was historically navigable water.  The state owns the land under the dock and it granted a permit to the Association to build and maintain the dock.  One can not get title insurance on this ownership interest.

Most people reading this are only concerned with docking but an interesting aside to the conversation is that the state has expanded the inter tidal zone definition along a beach defined as:  “Beach” means the zone of unconsolidated material that extends landward from the mean low-water line to the place where there is marked change in material or physiographic form, or to the line of permanent vegetation, usually the effective limit of storm waves. “Beach” is alternatively termed “shore.””   Thus, there is an easement on ALL beaches in Florida for ‘public use and enjoyment’.

Chris, What does XX stand for?  Looking over an MLS sheet there are all kinds of acronyms and other short hand descriptions. Things like CBS (Concrete Block Stucco) which has its origins in the tax data.  These are some others you might see on the local MLS listing sheet:

Status: Indicates the availability or contract change of subject property:
ACT (Active): Indicates that the subject property is available for purchase.

BU (Back Up) : Indicate the property is under contract to another party but that contract is subject to contingencies such as financing or inspections and the Owner is willing to enter into a Back Up contract for the property subject to the cancellation of the primary contract.

CTG (Active Under Contract) : This Status identifies that the subject is under contract through agreement between buyer and seller but the
contract is contingent on some additional action (Sale of another property, Third Party approval, Inspections,
financing approval, etc)

PND (Pending): Indicates that the subject property is under terms of contract and all contingencies if any have
been met and listing is awaiting closing.

CLS (Closed) Indicates the terms of the list agreement have been completely executed and the subject property as been successfully brought to close.

Area Number: 4 digit search code used to narrow down the geographic area of the subject property.
Note: Maps can be viewed at  North Palm Bch A.

Geo Area: Larger Geographical area containing two or more Area numbers. This is filled in automatically once the area
number is chosen.  Note: Maps can be viewed at north palm beach county MLS Area Map.

ER (Exclusive Right to Sell): Participant (Listing Broker) is granted the exclusive right to earn a commission by
representing the owner and bringing a buyer either through another brokerage or directly. The owner pays both the
listing and selling broker fees. The owner is prohibited from selling the subject property him/herself without paying a
commission to the listing broker.

EB (Exclusive Brokerage aka Exclusive Agency): Allows the owner to sell the subject property. Owner is
unrepresented and therefore is responsible for paying the commission to only the buyers representative

ER EX (Exclusive Right to Sell with Exceptions): Participant (Listing Broker) is granted the exclusive right to
earn a commission by representing the owner and bringing a buyer either through another brokerage or directly. The
owner pays both the listing and buyers representative commissions. The owner is prohibited from selling the subject
property him/herself without paying a commission to the listing broker unless an exception is indicated in the listing
agreement. The term “Exception” normally refers to the list broker allowing an individual who has expressed interest
in the property “X” number of days to produce a contract directly with the owner without the owner owing a
commission to the list broker.

EB EX (Exclusive Brokerage aka Exclusive Agency with Exceptions): Allows the owner to sell the subject
property. Owner is unrepresented and therefore is responsible for paying the commission to only the buyer’s
representative. Exceptions are indicated in the listing agreement. The term “Exception” normally refers to the list
broker allowing an individual who has expressed interest in the property a specified number of days to produce a
contract directly with the owner without the owner owing a commission to the list broker.

ER LS (Exclusive Right to Sell with Limited Service): Participant (Listing Broker) is granted the exclusive right
to earn a commission by representing the owner and bringing a buyer either through another brokerage or directly.
The owner pays both the listing and selling broker fees. The owner is prohibited from selling the subject property
his/herself without paying a commission to the listing broker. The limitations of service are defined in the listing
agreement.

EB LS (Exclusive Brokerage aka Exclusive Agency with Limited Service): Allows the owner to sell the subject
property. Owner is unrepresented and therefore is responsible for paying the commission to only the buyer’s
representative. Limitations of Service are defined in the listing agreement.

Listor Agency: Obligations under which the owner/buyer will be represented:

1. SNGAGT (Single Agency): Is a broker/associate who represents a buyer or seller but not both in the same
transaction. Single Agency includes the following obligations to the client
a. Dealing Honestly and Fairly: (The broker/associate should not have any interests that are contrary to
those of the client)
b. Loyalty: The broker/associate must be aware and avoid all occurrences that would breach the trust and
loyalty of the client.
c. Confidentiality: A broker/associate cannot reveal to a third party private or personal info that may
lessen the client’s bargaining position.
d. Obedience: The broker/associate must act in good faith and abide by all the client’s lawful instructions
and or requests. If a principal should unlawfully instruct a buyer or seller, the broker/associate should
inform the client about the unlawfulness of his/her request. If the client does not change the instruction it
is advised to withdraw from his/her relationship.
e. Full Disclosure: the broker/associate must keep the client informed (at all times) of anything that could
possibly affect the transaction or value of the property.
f. Accounting for all Funds: The broker/associate must be able to explain and track all funds accepted on
behalf of their client.
g. Skill Care and Diligence in the Transaction: the broker/associate should be able to supply the client
with answers or the resources to answer any issues that may arise during a transaction.
h. Presenting all Offers and Counteroffers: Offers/counteroffers must be presented in a timely manner
(timely manner as defined by Real Estate is usually immediately unless otherwise directed by the client).

2. NONREP (Non Representation): Neither Buyer nor Seller are represented by a brokerage until they
engage in an authorized brokerage i.e., transaction brokerage or single agency relationship. The duties of a no
brokerage relationship include
a. Dealing honestly and fairly
b. Disclosing all known facts that materially affect the value of the property not readily observable to the
buyer.
c. Accounting for all funds entrusted to the licensee.

3. TRANBK (Transaction Broker) : Is a broker/associate who provides limited representation to a buyer,
seller or both. In a transaction brokerage relationship the buyer or seller is the “customer”. Duties of a
transaction broker are:
a. Dealing honestly and fairly
b. Accounting for all funds
c. Using skill, care and diligence
d. Disclosing all known facts that materially affect the value of residential property that are not readily
observable by the buyer
e. Presenting all offers/Counteroffers in a timely manner
f. Limited Confidentiality, unless waived in writing by a third party.
g. Anything else that is mutually agreed to by all parties involved in the transaction.

Sub Type: Description of subject property based on construction and physical design, regardless of legal description.
1. S (Single Family Detached): Free standing residential dwelling that does not have common walls.
2. C (Condo or Coop Condominium or Cooperative):
a. Condominium: A group of housing units that share common walls, ceilings and floors. Typically, each
individual owns the unit space and areas of common use. The land is typically owned in common by all unit
owners.
b. Coop (aka Cooperative): A group of housing units that share common walls, ceilings and floors. Ownership
is not conveyed. In a co?op purchase the buyer becomes a shareholder in a corporation that owns the
building. The buyer carries a leasehold interest in the subject unit.
3. T (Townhouse/Row): A row of multi?story homes sharing common walls. Can be attached to other houses with one
or both sides sharing common walls, depending on whether the unit is in a center or end position. Townhouses can be
grouped together as small units, such as duplexes or triplexes, or they can be a part of a multi?townhouse complex.
Ownership includes any areas of common use.
4. V (Villa): Single story residences that have at least one wall attached to a neighboring unit.
5. M (Mobile Home): A dwelling manufactured in a factory and designed to be transported and is semi permanently
attached to the land. Mobile homes must be attached to real property and taxed as real property to be listed in the
MLS system.

Governing Body:
1. Coop (aka Cooperative): is usually an apartment building or mobile home park that is owned by a corporation. The
shareholders or members of the corporation are entitled to lease one of the apartments / mobile home sites. The
proprietary lease is entered between the member and the corporation.
2. Condo (Condominium): This form of ownership can take almost any architectural form. The Declaration of
Condominium sets forth the boundaries of a number of units and of the common elements of the association.
Typically, a unit consists of the air space bounded by the surfaces of the walls, floor, and ceiling. The property other
than the units is the common elements, which typically includes the actual real estate, the buildings themselves, all
structural components, the grounds, and exterior areas. In addition to owning the air space that consists of a unit,
each unit owner also owns a percentage of the common elements (as tenants in common with all other unit owners)
according to the percentages set forth in the declaration.
3. HOA (Home Owners Association): Each member owns his or her own Lot in the same way as a single family
homeowner. However, the surrounding common areas are owned by the Association for the benefit of the
homeowners. Many of these associations are multi?family housing buildings, such as townhouses, and the association
performs exterior maintenance on the buildings. However, a homeowners’ association can be a neighborhood
association of single?family homes or of a mixed community
4. None: Indicates a lack of presence of any governing body

HOA (Home Owners Association):
1. V (Voluntary): Fees not required
2. M (Mandatory): Fees are required
3. N (None): Governing body does not exist fees are not applicable
4. Y (Yes): Association is present

HOA Amount (Homeowners Association Amount): Total payable amount to a governing body.

Liv Area SqFt (Living Area Square Footage): Heated / Air conditioned Living space, measured by exterior walls not inclusive of exterior attachments i.e. garage, carport, patio or atrium space.

Total Bldg SF Incl (Total Building Square Footage with Inclusions): Overall square footage including living Area
Square Footage and outdoor attachments i.e. garage, carport, patio or atrium space.

Subdivision Name: Name of the subdivision located within a development. Only the legal name or common names of the
subdivision are allowed in this field. Names of enclaves within larger developments would be included in this field.
Development Name: Development name. The legal or common name of the Master planned community or development.
(IE Abacoa, Traditions, PGA National)

Model Name: Name of model home issued by the developer. NO other information may be placed in this field. If the subject
property does not have a specific model name this field should be left blank.
Short Sales:

Short Sale : The sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured
by the subject property.
1. Y (Yes): Subject property is a “Short Sale” property.
2. N (No): Subject property is not a “Short Sale” property.

Short Sale Addendum: Florida Realtors® (FR) Agreement that indicates acknowledgement of specific terms related
directly to a short sale transaction.
1. Y (Yes): Short Sale Addendum has been signed.
2. N (No): Short Sale Addendum has not been signed.

Multiple Offers Accepted: Notification that multiple offers will be accepted by the Seller on the short sale property

Tax Year: Year of current assessed tax. This field should be reviewed every March for listings that overlap tax postings.

Tax Amount: Total tax amount. This field should be reviewed every March for listings that overlap tax postings.

Special Assessment: A tax or fee levied against a property or properties to pay for all or part of improvement that will
benefit the property assessed.

Minimum Days Lease : Minimum number of allowable days to lease the subject property deemed by the governing body
aka HOA.

Lease Times per YR (Lease Times per Year): Number of allowable times that the subject property may be leased within
a year deemed by the governing body aka HOA.

DOM: (Days on the Market) Total number of days between List date and closing date on the specific listing. If the property
goes off the market and back on, the time is not subtracted from the count. Ex: Listing with List date of 11/21/06 to 2/17/08
= 454 DOM

CDOM: (Cumulative Days on the Market) Cumulative Number of days between List date and Closing date for all listings
with matching Tax Id numbers and Category (RES, Rental). CDOM starts over once the property has been off the market for
longer than 45 days. Formula = List date through closing date (Expiration Date), minus any off?market time.
EX: Same listing as above: List date of 11/21/06 to 2/17/08 was off market from 10/12/07 to 1/6/08 ?83 days = 370 CDOM

I was at Jupiter Country Club the other day and you would think they’re giving away free houses there.  I decided that a list of new communities in the Jupiter area may be useful.  Just follow the links o the communities below to see specific community information:

Jupiter Country Club

Rialto

Prado

Windsor Park at Abacoa

Sandpiper Cove at Botanica

Tierra del Sol

The Preserve at Juno Beach

Frenchman’s Harbor

Bay Colony

Sandpiper Cove

Villa Diamante

Hampton Cay

Gardenia Isles