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Title insurance provides protection

Dear Mr. Feichthaler,

I am considering buying a condominium directly from a friend of mine, without the use of a Realtor. He is the only owner of it, and it was built in 2017. He has suggested we forego title insurance, and that he sign and provide a warranty deed to transfer the property to me. Do I need title insurance?

Sincerely,

-Paul S.

Dear Paul,

P. Feichthaler

Real Estate Law

Multi-family properties like condominiums have become more numerous in recent years, and have been “flipped” during our recent real estate boom. First, let’s talk about what title insurance is. It is a policy that is issued by a law firm or title company, on behalf of an insurance underwriter, that protects the purchaser of real estate against loss that may occur due to a defect in your ownership. This can be issues like defective deeds in the chain of title, improper legal descriptions of the property, etc. The policy also pays for the costs of court and will defend the seller if there is an issue of title that arises later.

While true that most people who own a condominium have actual clean ownership, occasionally they don’t. Items like mortgages, IRS liens and other government liens will follow the property, even if transferred to you. While you may have recourse against the seller, what if they have no money, can’t be found, or otherwise makes it difficult on you to correct the issue? Without an owner’s title policy, the costs of court will be squarely on your shoulders.

I always recommend a buyer demand a title policy, especially since, in Lee County, it is customary for the seller to pay for the policy. The cost is typically just over one half of one percent of the sales price of the property. Although the percentage risk of an issue may be fairly low, the cost if there is a defect could be steep, including your entire amount of your investment. My advice: write a contract (or have an attorney prepare one for you) laying out all the details, rights, and responsibilities. One of the requirements of the seller should be to provide a full title search, and a title policy protecting your investment.

Home renovations are significant undertakings. Though some projects require more sizable investments of time and money than others, all merit homeowners’ attention and inspire some excitement when pondering the finished product.

A finished product tends to offer more appeal when the project is overseen and undertaken by a professional contractor. Small projects may be in the wheelhouse of skilled do-it-yourselfers, but most homeowners are best served leaving home renovations to the professionals. Finding the right contractor for a given job is of the utmost importance, and the following are some tips to help homeowners do just that.

· Seek word-of-mouth recommendations. Word-of-mouth advertising has long been recognized as an invaluable tool to attract customers, and for good reason. Word-of-mouth is so valued because homeowners can ask friends or neighbors about their experiences with a given professional in a pressure-free setting. Word-of-mouth also can help homeowners cut down on the pool of potential contractor candidates, which is no small benefit in markets flooded with renovation professionals.

Research the recommendations. In many cases a word-of-mouth recommendation is good as gold but it can lead you to the wrong contractor for your specific project. Taking the time to research online and elsewhere will remove the guesswork from which contractor has the skills for what you need done. Take advantage of online reviews to read exactly what others have said and apply those to what you are looking to have renovated.

Secure multiple written estimates. It can be time-consuming to speak to multiple contractors and secure written estimates from each one, but such legwork is well worth the effort if the end result is finding Article continues on Page 3

Eric P. Feichthaler has lived in Cape Coral for over 37 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Cape Coral to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, and Cape Coral Kiwanis where he serves as president. He has been married to his wife, Mary, for 24 years, and they have four children. He earned his board certification in Real Estate Law from the Florida Bar, and primarily practices in real estate law and wills and trusts. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney .com, or 239-542-4733. This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.

Eric

the right contractor. Secure multiple estimates even if the first one provided to you is below budget. Multiple estimates allow homeowners to compare what’s included, and not included, in each one. Some contractors offering low estimates may not include materials costs or additional factors that will increase the price. Others may seem more expensive initially but may prove more affordable than competitors if their estimates include all of the costs associated with the project. Only a direct comparison of multiple estimates, which should include details specific to the project and an itemized list of what will be provided and performed by the contractor, can give homeowners an idea of what they’re paying for.

· Stay local when possible. Hiring local contractors is beneficial for a number of reasons. Hiring locals keeps money in the community and thus supports the local economy. And working with local contractors can make it easier for homeowners to keep lines of communication open. Many projects also require a little post-completion upkeep or even some tweaks, which is more easily accomplished when working with contractors based nearby. And finally, local contractors will be familiar with building codes and other details specific to a given town. That familiarity can ensure a project is done in adherence to codes and not stalled by permit- or inspection-related delays.

· Confirm their insurance. Travelers Insurance urges homeowners to confirm a contractor is properly insured and bonded prior to signing a contract. Contractors should be willing to provide a certificate of insurance (COI) that indicates their provider, policy number and coverage limits. Travelers also notes homeowners can contact insurers directly to verify coverage and ensure the policy is current. Never hire a contractor who is uninsured or unwilling to provide proof of insurance.

Hiring a contractor to perform a home renovation may be a leap of faith, but homeowners can take steps to ensure they find the right professional for the job.

PROPERTY TRANSFERS

Source: Lee County Property Appraiser

PROPERTY TRANSFERS

First quarter luxury home sales down versus 2024

It is time once again for our quarterly tip of the hat to the late, great Robin Leach, with our Cape Coral version of “Lifestyles of the Rich and Famous,” as we review the first quarter 2025 sales results for our luxury single-family home segment. For our purposes, the luxury market in the Cape includes homes selling at $1 million and above.

On a positive note for our market, as of Tuesday, April 15, the number of overall pending single-family home sales in the Cape jumped up to 775 homes currently under contract with buyers. This topped the previous high for pending home sales in our daily and weekly market surveys for this “season,” which was 768 pending home sales on March 25 and 26. The fact that pending home sales are remaining at nicely elevated levels indicates that the number of closed home sales in the second quarter of this year are likely to be near last year’s numbers and that this season is following our historical pattern where the number of closed home sales hits its peak in the second quarter of the year. So after a slow start to this year with a combined 590 closed home sales this January and February, which was the worst start to a year since there were only 579 total sales in the first two months of 2017, sales have accelerated with this March running about even with the 536 home sales in March of last year.

Even though it looks like the number of closed home sales in the first quarter of this year will be coming in about 6.7% below the 1,205 sales in the first quarter of 2024, what is likely to be a solid second quarter for home sales is providing an opportunity for home sellers who are willing to be more aggressive with their list prices than other sellers to get their homes sold.

A bit more troubling, for sellers in the Cape and throughout much of Florida, is the continued slow and steady deterioration in home values and home sales prices. For example, in the first three months of this year the average median home sales price in the Cape has dropped by 6.4% to $385,000 per month from $411,407 per month in the first three months of last year. We tend to think the rough patch of declining home prices will continue this year, and as we said a year ago, the sooner a seller gets their home priced correctly to the current market conditions, the more money they are likely to receive for their home. Or, put another way, what you receive from a buyer today will probably be more than you will get three months from now, and probably more than you will get three months after that. Buyers are active right now, but it is fair to say that in the last 30-plus months many sellers have been getting less for their homes than they expected, so lower home prices are not a new trend.

Getting back to the Cape Coral luxury single-family home market, there were a total of 64 closed sales in the first quarter of this year, including 11 sales in January; 15 sales in February; and 38 sales in March. The final sales prices ranged from $1 million to $3.999 million, and the median first quarter sales price for these 64 luxury home sales came in at $1,272,500. The number of closed luxury home sales this year came in 9.9% below the 71 luxury home sales in the first quarter of 2024, when there were 17 sales in January; 26 sales in February; and 28 sales in March. In the first quarter of 2024, luxury home sales prices ranged from $1 million to $3.42 million, and the median sales price for our luxury home segment was $1.335 million, which was 4.9% higher than this year.

Here is a deeper breakdown of the 64 luxury home sales in the Cape during the first quarter of this year. A total of 37 of the 64 closed luxury home sales, or 57.8%, were located in the Southwest Cape, followed by 14 sales in the Northwest Cape, and 13 sales in the Southeast Cape, with no luxury homes being sold in the Northeast Cape. All 38 of the pending sales for luxury homes in the Cape were located on “saltwater” canals, with 25 of these 38 located on direct sailboat access canals. Getting back to the 64 closed sales in the first quarter of this year, only one home was sold for more than its initial list price. This home was listed at $979,900 and it went under contract with a buyer in 24 days, before closing at a final sales price of $1.1 million, or for 12.3% above its list price.

One other home was sold for its initial list price, but it appears to have been a prearranged deal before it came on the market as an active listing. There was also one other home that shows it was sold at its full list price of $1.495 million after going under contract with a buyer in 10 days, but this home had been previously listed with a different agent for $2.25 million. So it was actually sold for $755,000, or 33.6% less than its initial list price. A total of 23 of the 64 luxury homes sold, or 36%, did not need to make a price reduction from their initial list prices in order to attract a buyer, but 20 of these 23 sales actually closed for less money than their list price. Every other luxury home that was sold in the first quarter of this year had to make at least one price reduction before it went under contract with a buyer, so it has not been an easy market for sellers.

The currently highest-priced active listing in Cape Coral has been on the market 147 days at $6.985 million without making any price reductions. The second highest-priced luxury home listing in the Cape is currently priced at $6.7 million. This new construction riverfront home was initially listed for sale at $7.867 million in September 2023, and after four price reductions it is now listed for $1.167 million less than its initial asking price, for a discount of 14.8% so far. Looking at the numbers for the highest-priced closed home sale in the first quarter of this year, we see that it was initially listed for $6.5 million on October 30, 2023, with one price reduction to $6.45 million in April 2024, before the listing expired in May 2024. This home was relisted with a different Realtor for $5.98 million in June 2024, followed by three more price reductions down to $4.5 million on Jan. 30 of this year. It finally went under contract on Feb. 16, at a closed sales price of $3.999 million on March 14, for a total discount of $2,501,000 or 38.5% below the initial list price.

The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of April 15, 2025, unless otherwise noted. It was compiled by Bob and Geri Quinn and it includes information specifically for Cape Coral single-family homes, and does not include condominiums, short sales or foreclosures. The data and statistics are believed to be reliable, however, they could be updated and revised periodically, and are subject to change without notice. The Quinns are a husband and wife real estate team with the RE/MAX Realty Team office in Cape Coral. They have lived in Cape Coral for over 45 years. Geri has been a full-time Realtor since 2005, and Bob joined with Geri as a full-time Realtor in 2014. Their real estate practice is mainly focused on Cape Coral residential property and vacant lots.

By comparison, in the first quarter of 2023 when our market was still bouncing back from the impacts of Hurricane Ian, there were 62 luxury home sales in the Cape. Back in the first quarter of 2022, there were 115 luxury home sales as the post-COVID real estate boom was unknowingly approaching its peak. The 2022 numbers blew away the 44 closed luxury home sales from the first quarter of 2021 by a whopping 161%, and for the record, back in 2020 there were only 12 first quarter sales in the Cape’s luxury home segment. Keep in mind that in 2020, the first phase of the COVID shutdowns had just kicked in during mid-March of that year, and the big run-up in home values had yet to occur, so the number of million dollar-plus homes in the Cape was only a fraction of today’s number.

Digging down into the current 2025 luxury home numbers, as of Tuesday, April 15, out of the 3,432 active single-family home listings through the MLS in the Cape, a total of 367 homes were for sale at $1 million and above. One year ago on April 16, 2024, there were 2,827 active listings in the MLS for Cape Coral single-family homes, including 350 luxury homes listed at $1 million and above. Out of the current total of 775 pending home sales in the Cape, there were 38 luxury homes under contract with buyers at $1 million and above. Back on April 16, 2024, there were a total of 863 pending home sales through the MLS in the Cape, including 61 homes under contract with buyers at $1 million and above. So we are still lagging behind last year, and the high end of our market has slowed down from a year ago.