June is here and Floridians know what that means, hurricane season is upon us. Hurricane season for the Atlantic runs from June 1st through November 30th. Throughout that time there may only be a few tropical depressions swirling around or there could be back to back storms headed towards the U.S. This could create a problem for people looking to buy or sell a house during this six month span. Do not panic though. Ironically, this six month span is also the busiest time of the year for real estate transactions. This week’s blog will have tips for ensuring a smooth transaction during hurricane season.
If you are planning to finance your home it is important to remember that any mortgage lender will require that the buyers provide proof of homeowner’s insurance coverage on the day of the closing. Failure to do so will result in the lending company’s refusal to release the funds and the closing will at best postponed or outright cancelled.
As a storm develops insurance companies will suspend issuing homeowners insurance policies until the storm passes, even if the area is not in the direct path of the storm. It does not take a direct hit by a storm to cause damage. The Florida Realtors®/Florida Bar Contract for Sale and Purchase contains within it a clause that extends the closing date for a period of time in this event; however, it could impact other areas such as interest rates, points and closing costs, homeowner’s insurances rates, etc. It is important to know.
There is a very simple way to avoid this happening. Start shopping as early as possible for homeowner’s insurance. These types of storms can pop up out of no where. A great time to start would be as soon as you have an executed contract on the property. Narrow down your choices and as soon as you feel good about your loan being approved or you have been informed by your lender; go ahead and have your insurance company "bind" your policy. You will be required to write a check at the time of application and the policy will become effective on the date of closing. If the sale falls through for whatever reason or you are delayed you can always cancel the coverage and request a refund from the insurance company for any unused premiums. Make sure you talk to your local insurance agent before signing anything.
TEAM JOHNSON can help navigate you through a successful sale even in the middle of hurricane season. Each of the members on our team have been long time Florida residents for a minimum of 20 years. We have seen some of the worst seasons for the state of Florida including the record setting 2004 where we had 4 hurricanes (Charlie, Frances, Ivan, and Jeanne). Give us a call at 904-495-0146 or email us at teamjohnson@watsonrealtycorp.com
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