Naples Area Board of Realtors Q3 by Palm Beach Media Group

NAPLES AREA BOARD OF REALTORS® MAGAZINE

Q3 2022

PRICED OUT

Community-wide efforts are underway to create attainable and workforce housing in Collier County 2

PALM BEACH ILLUSTRATED

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CONTENTS FEATURES 26

New Hori-Zones What do Opportunity Zones mean for Collier County? Will they attract more industrial activities?

Priced Out Community-wide efforts are underway to create attainable and workforce housing in Collier County.

Calculating Value

SOUTH FLORIDA WATER MANAGEMENT DISTRICT

Industry experts explain why obtaining sound appraisals has been challenging in this unprecedented market.

DEPARTMENTS 8

Message from the President

For Openers The state of our water quality. Issues surrounding flood and homeowners insurance. Cryptocurrency’s potential in property transactions. Waiving home inspections. SafeShowings app. Legislative update.

Get Smart Does home staging matter in this hot market? MLS Tech Conference and new MLS features. Supporting Project HELP. Meet RPAC Hall of Famers who explain the importance of supporting RPAC. Dot all of the i’s in condo transactions. Selling and buying in non-warrantable communities. Understanding Collier County’s new short-term vacation rental ordinance. NABOR® insights.

NABORhood

GARRENTEED VISUALS

Professional Development Committee and Young Professionals Network spotlights, social photos, and upcoming events.

N A P L E S R E A LT O R ®

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The Close Food & Spirits: Summertime Soirees. Destination: The Ritz-Carlton Golf Resort, Naples. Picturing Paradise: Look Into My Eyes.

Q3 2022

6/16/22 4:04 PM

TAKE A PEEK AT YOUR FUTURE

SCAN THE CODE WITH YOUR PHONE’S CAMERA TO DISCOVER THE DOWNING-FRYE DIFFERENCE.

MIKE HUGHES, Vice President (239) 398-7572 MHughes@DFryeRealty.com

WENDY MORELL, Recruiting Mgr. (239) 300-5979 Wendy@DFryeRealty.com

JERRY MURPHY, Mgr. Bonita Springs (239) 877-2002 JMurphy@DFryeRealty.com

df DOWNING-FRYE REALTY, INC. 8950 Fontana Del Sol Way #100, Naples, FL 34109 | 3620 Tamiami Trail N., Naples, FL 34103 | 27399 Riverview Center Blvd. #101, Bonita Springs, FL 34134 | 719 Bald Eagle Drive, Marco Island, FL 34145

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NAPLES REALTOR

NABOR® Officers 2022 President Ryan Bleggi President Elect Nick Bobzien Vice President/Secretary Christine Citrano Treasurer PJ Smith

NABOR® Directors 2022 Paula Angelopoulos Urbinati, Corey McCloskey, David Puskaric, Marcie Roggow, Stuart Tackett, Terrilyn VanGorder, Mary Waller

NABOR® COMMITTEES 2022 Budget & Finance Chair PJ Smith Budget & Finance – NABOR® Metrics Chair PJ Smith Commercial Chair Austin Howell V-Chair Cristin Madden Community Involvement Chair Gretchen Shelton V-Chair Nancy Bjork Diversity, Equity, & Inclusion Chair Paula Angelopoulos Urbinati Events for Networking Chair Shannon Livingston V-Chair Ben Boorom Expo Chair Jorge Velasquez V-Chair Julie Blanton Economic Summit Chair Brenda Fioretti V-Chair Gwen Davis-Gideon Global Business Chair BJ Cottrell V-Chair Brett Brown Governmental Issues Chair Maurice Cossairt V-Chair Tom Regan

Governmental Issues Water Quality Chair Adam Vellano

Young Professionals Network Chair Henry Albarracin

Grievance Chair Larry Fleming

V-Chair Allisa Pipes

V-Chair Courtney Smith

Naples REALTOR® Magazine Editorial Board

Leadership Development Chair Ron Coburn V-Chair Mariana Birmingham Legal Resources Chair Jeff Jones V-Chair Sam Saad Media Relations Chair Ryan Bleggi Membership Chair Sandra Schlaupitz V-Chair Perry DeSiato Membership – Broker Involvement Chair Adam Vellano NABOR® History Chair Ray Gonzalez NABOR® Magazine Chair Mary Waller MLS Chair Shaun Garry V-Chair BC Cloutier Professional Development Chair Adam Vellano V-Chair Rick Baranski Professional Development – Instructor Advisory Council Chair Gwen Davis-Gideon Professional Standards Chair Rick Fioretti V-Chair Carrie Lademan RPAC Chair Brett Brown V-Chair Sara Brand

Chair Mary Waller Director of Marketing Marcia Albert Patricia Asencio Paula Angelopoulos Urbinati Chris Capon Gwen Davis-Gideon Ray Gonzalez Karen McKay Jeffries Paula King Elizabeth Grace Koplitz

NABOR® Staff Chief Executive Officer Marty Manion Administrative Assistants Ann Mazzei Jeanette O’Neill Administrative Assistant to the Executive Committee Deborah Linville Chief Administrative Officer Corie Chase Chief Financial Officer Carl Russell Director of Marketing Marcia Albert Director of Membership Elizabeth Saggio Director of MLS Cindy Cornman Director of Professional Development Services Michelle McKenna Manager of Events and Communication Specialist Melissa Bognaski Membership Administrators Sherry Olson Zamira Collado MLS Compliance and Support Specialist Cheyenne Luckey MLS Support Specialist Allisson Gonzalez Network Technician Michael Bryant REALTOR® Store Manager Taiana Londono Receptionist Joan Welsher Vice President of Public Policy Danielle Brazil Hudson Videographer Wade Mastro

N A P L E S R E A LT O R ®

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There’s a lot that goes into our name. Q As the leading developer and builder of luxury residences in Southwest Florida, the STOCK name has always been synonymous with exceptional craftsmanship and incomparable lifestyle. Now’s the time to introduce your clients to our award-winning style, craftsmanship and quality.

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BROKER PARTICIPATION WELCOMED. ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS REFERENCE SHOULD BE MADE TO THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE. NOT AN OFFERING WHERE PROHIBITED BY STATE LAW. PRICES AND COMMISSIONS SUBJECT TO CHANGE WITHOUT NOTICE.

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REDEFINING THE CLOSING EXPERIENCE Publisher Liz Goodman Editorial Director Daphne Nikolopoulos Editor Cathy Chestnut Creative Director Olga M. Gustine Art Directors Diana Ramírez, Jorge Marquez Web Editor Abigail Duff y

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CONTRIBUTING WRITERS Robin F. DeMattia, Artis Henderson, Dick Hogan, Beth Luberecki

CONTRIBUTING PHOTOGRAPHERS Shane Antalick/Sanibel-Captiva Conservation Foundation, Caleigh Michele Amor, Garrenteed Visuals, Wade Mastro, David Michael, Andrew Occhipinti, Nick Shirghio, South Florida Water Management District, The Coldest Water

ADVERTISING Advertising Services Coordinator Liz Hackney Marketing Manager Christopher Link

PRODUCTION

Visit our website to learn how we are setting the standard for excellence. 5147 Castello Dr., Naples, FL | 239-449-4888 | www.fltitlegroup.com

Production Director Selene M. Ceballo Production Manager Kayla Earle Digital Pre-Press Specialist George Davis Digital Production Coordinator Brendan Everson Advertising Design Coordinators Anaely J. Perez Vargas, Jeffrey Rey

OPERATIONS Chief Operating Officer Todd Schmidt Office Manager Robin Primbramsky

IT Manager Keith Gonzalez Marketing Manager Christopher Link Distribution Manager Judy Heflin Logistics Manager Omar Morales Circulation Manager Marjorie Leiva Circulation Promotions Manager Marcus Alviar Circulation Assistant Elizabeth Gillespie Accounting Specialist Mary Beth Cook Accounts Receivable Specialist Ana Coronel Group Publisher Terry Duff y

SUBSCRIPTIONS 800-308-7346 In Memoriam Ronald J. Woods (1935-2013) HOUR MEDIA, LLC CEO Stefan Wanczyk President John Balardo PUBLISHERS OF Palm Beach Illustrated • Naples Illustrated • Fort Lauderdale Illustrated • Orlando Illustrated • Palm Beach Charity Register • Naples Charity Register • Florida Design • Florida Design Naples • Florida Design Miami • Florida Design Sourcebook • Palm Beach Relocation Guide • Southwest Florida Relocation Guide Fifth Avenue South • The Jewel of Palm Beach: The Mar-a-Lago Club • Traditions: The Breakers • Palm Beach 100 • Naples 100 • Art & Culture: Cultural Council for Palm Beach County • Pinnacle: Jupiter Medical Center Foundation • Waypoints: Naples Yacht Club • Naples on the Gulf: Greater Naples Chamber • Jupiter • Stuart • Aventura • Vero Beach Magazine • Community Foundation of Collier County Community Report Advances: Tampa General Hospital • Fisher Island Club Magazine • Naples REALTOR®: NABOR®

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N A P L E S R E A LT O R ®

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Proud Partner

Naples Illustrated 3066 Tamiami Trail N., Suite 102, Naples, FL 34103 • 239-434-6966 • Fax 239435-0409 • Naples Illustrated is a registered trademark of Palm Beach Media Group North, LLC • Corporate Headquarters: P.O. Box 3344, Palm Beach, FL 33480 • naplesillustrated.com

Q3 2022

6/16/22 3:35 PM

Your golfing friends at Eagle Creek invite your clients to

Discover the Difference And tour our reimagined golf course and practice facilities, complete with new outdoor verandah. Visit JoinEagleCreek.com or contact Membership Director Laura Pelletier at 239-793-0500 for more details. Non-Resident Waitlist now commencing.

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MESSAGE FROM THE PRESIDENT

IN A TOUGH SPOT? We can help with your trickiest real estate matters.

INVESTED IN IMPORTANT ISSUES Dear NABOR® Members,

With over 50 years of combined experience, Thompson Lewis has expertise you can trust.

Thompson Lewis Law Firm 745 12th Avenue South Suite 105 Naples, FL 34102 239-316-3006 www.tllfirm.com

N A P L E S R E A LT O R ®

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Hello. I was fortunate to attend the 2022 REALTORS® Legislative Meetings in Washington D.C. in May for the purpose of advancing issues important to the real estate profession and the livelihood of our membership. The meetings, which were very insightful and filled with information, allowed us to build on the momentum of the advocacy work of the National Association of REALTORS® and continue the critical policy conversations among REALTORS®, lawmakers, and industry leaders. As you may be aware, Congress has discussed significant changes to our tax preferences regarding homeownership such as capping the Mortgage Interest Deduction (MID) and Property Tax Deduction and limiting the 1031 Like Kind Exchanges, all of which have a significant impact on the housing market and your business. I encourage you to voice your opinion about this legislation to your local and state representatives. My hope is that you will continue to lead prosperous, fulfilling, and successful careers in the real estate industry. You can invest in the success of our industry and your own business by responding to Calls for Action and investing your fair share ($20) in the REALTORS® Political Action Committee (RPAC). I encourage you to please invest your time and dollars, so the American dream of homeownership remains for many years to come. Best wishes for a great third quarter!

Ryan Bleggi

NABOR® President

Q3 2022

6/16/22 2:48 PM

At Kalea Bay, There’s no need to ask “Y”

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Oral representations cannot be relied upon as correctly stating representations of the developer. For correct representations, make reference to this brochure and to the documents required by chapter 718.503, Florida statutes, to be furnished by a developer to a buyer or lessee.

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FOR OPENERS

State of Our Water Southwest Florida’s water quality is getting the attention it deserves BY ARTIS HENDERSON

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Professor Barry Rosen, Ph.D., is a leading expert on cyanobacteria, harmful algal blooms, and blue-green algae. He’s also a REALTOR®. Rosen is optimistic that Southwest Florida is on a better path these days. “The state and federal governments are putting a lot of effort into understanding the dynamics of red tide and harmful algal blooms,” he says. “It’s only a matter of time before we understand these organisms and can control them better.”

SHANE ANTALICK/SCCF

he Gulf of Mexico seems to be on the mend, thanks to strong efforts from local agencies and nonprofits. That means more tourism dollars in the Southwest Florida economy and a continued robust outlook for home prices. Still, experts say vigilance is key to keeping our waters clean. June marked four years since the 2018 crisis when blue-green algae and red tide converged to cause trouble in the Gulf of Mexico and local waterways, killing off tons of fish, giving residents respiratory distress, and fouling the coastline. Many Southwest Florida businesses took a hit, from hotels to restaurants to ecotours operators and kayak outfitters. One study from the University of Florida’s Institute of Food and Agricultural Sciences put the loss to the tourism industry at $184 million. Charter boat operations were down 61 percent during the summer of 2018 and marine recreation in general reported a 36 percent decrease in sales. Tourism wasn’t the only industry affected by water quality. Real estate agents suddenly found themselves brushing up on their biology so they could explain the situation to their clients. Words like Okeechobee release, cyanobacteria, and turbidity suddenly became part of the REALTOR® vernacular. According to an article published in the scientific journal Environmental and Sustainability Indicators in February 2020, real estate prices weren’t immune to the water quality issues. Using data pulled from Zillow, the study’s author determined that property values within five miles of the coast decreased around 10 percent in the months plagued by red tide. These price reductions were steeper for homes on the water. With each additional month a red tide outbreak persisted, prices dropped by one or two percent. Florida Gulf Coast University Water School

Yet Rosen recognizes that addressing water quality issues is not an exact science. Living organisms can be complicated and unpredictable. “Everyone’s looking for a magic bullet, but organisms like blue-green algae and cyanobacteria have been evolving for 3.5 billion years. They’ve developed traits that make them very, very successful.” If scientists manage to push one organism out, a similar organism with slightly different traits will pop up in its place. That’s why he emphasizes that our waters are a living, interconnected, complex ecosystem—“not a swimming pool.” Since 2018, several groups have joined forces to address the water quality issues brought to light that summer. “There’s a massive amount of public awareness on the issue,” says Captain Daniel Andrews,

executive director of Captains for Clean Water, a grassroots nonprofit launched in 2016 by Andrews and another local fishing guide following two years of seagrass die-offs in the Caloosahatchee estuary triggered by massive discharges from Lake Okeechobee. The nonprofit is a vocal advocate in Tallahassee dedicated to shaping public policy to protect Florida’s water. “People haven’t forgotten” the 2018 crisis, Andrews says. The Waterkeeper Alliance is also using its reach to bring about changes to the local water situation. The Waterkeeper Alliance is the largest and fastest-growing clean water nonprofit in the world. With 346 chapters on six continents, the group has 15 chapters in Florida, including the Collier County Waterkeeper. Every Waterkeeper is charged with cleaning and restoring the watershed. KC Schulberg spent three years as the executive director of the Calusa Waterkeeper in Lee County before becoming the Collier County Waterkeeper. He describes the work of the Waterkeeper Alliance as testing, monitoring, educating, and getting the word out. “We’re working very hard,” Schulberg says. Like Rosen, Schulberg is optimistic about the future of Southwest Florida’s water quality. His optimism stems from the awareness around the issue that has spread like wildfire across the state. “We had a real wake-up call in 2018,” he says. “Now water quality is very much on everyone’s radar.” He remembers the political signs that popped up in front yards after that terrible summer. They didn’t advocate for Republicans or Democrats. Instead, they said: Vote Water. “It’s an issue that cuts across both parties,” Schulberg says. “These problems are solvable. It just takes an application of resources and the correct political will out of Tallahassee.”

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FOR OPENERS

INSURANCE EXPLAINED

Insurance Tempest Today’s perfect storm in the home and flood insurance industry can impact sales BY ROBIN F. DEMATTIA

eeking peace of mind and home protection has become a challenge as a confluence of issues rile the homeowners and flood insurance markets. It’s a perfect storm: Roofing fraud. Rising premiums due to expensive litigation costs. Insurance companies going belly-up. Mounting underwriting losses in Florida reaching $1.6 billion in 2021, according to the Insurance Information Institute. Add in supply chain issues and increased costs for building materials—leading to higher claims payouts—and REALTORS® have plenty to discuss with potential buyers. “In 2020 and 2021, we had pretty significant rate increases across the board, and in 2022 we’re seeing them continue to go up,” says Andrea Pelletier, client advisor and partner with Gulfshore Insurance. It’s not just hurricane losses that insurance companies are targeting. Natural disasters are unfolding across the country, from wildfires in California to burst water pipes in Texas to tornados in the Midwest and Southeast. “All these weather-related events put stress on the carriers and affect the reinsurance market,” she says, “and adds to the spiraling effect.” Even carriers rated by Demotech, which evaluates the financial stability of property and casualty insurers, are struggling, Pelletier says. Regular go-to insurance companies such as United, Universal, Heritage, and Tower Hill Insurance are seeing major rate increases.

Look Up

Insurance carriers are becoming more conservative because they don’t want to take on more risk, Pelletier explains. It may 12

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come as a surprise that they are particularly wary of older homes, which in Florida can mean 20 years old. They are particularly picky about older roofs. “If the house went through Hurricane Irma and the roof has not been replaced since then, it’s not an ideal situation,” Pelletier says. This restrictive policy, of course, means fewer options in the marketplace. “For people moving to Florida in recent years, it’s a big challenge,” notes Rodiana Andis, principal agent at Andis Insurance Agency. “They don’t understand our market and our mom-and-pop insurance companies. They say, ‘How can a 1999 home be old?’ because they’re coming from northern states where that would be considered fairly new.” The adage, “If it ain’t broke, don’t fix it,” isn’t applicable to roofs in Florida. Andis advises homeowners considering selling in the near term to get a new roof, not only as a key upgrade but to ensure a smooth insurance situation for the buyer. And she has an analogy that REALTORS® can share to explain exactly why. “It’s like the tires on your car. When they need to be replaced, insurance doesn’t pay to replace them,” Andis says. “If your roof is 20 years old and has no damage, you should replace it yourself—you should plan and save for it.” Pelletier recommends that buyers purchase their insurance through an insurance agent, as opposed to purchasing it online, to make sure they select the right amount of coverage and to get competitive pricing from several companies. She also suggests bundling homeowners, auto, and valuable articles insurance.

New NABOR® video guides REALTORS® through the insurance maze Jeff Jones, chair of NABOR®’s Legal Resources Committee and President 2019, recently helped produce a nine-minute video to help REALTORS® understand what is happening with insurance to better help their customers. “The homeowners insurance market is in complete chaos,” Jones says. He cites the number of insurers who have gone out of business, rate increases of 20-plus percent, and people flocking to Citizens. In October 2021, Citizens’ policy count jumped to 700,000-plus from 420,000 in October 2019. Its policy count could reach 1.3 million by the end of the 2022. Jones says it’s important for REALTORS® to help customers determine the impact of homeowners and flood insurance premiums on ownership costs before purchasing. “The contract assumes that the buyer has already investigated their insurance situation, especially if they are using financing,” Jones says. However, “the monthly costs of the insurance premiums for homeowners and flood could affect their affordability for mortgage financing.” Buyers may not think to ask their REALTOR® about insurance costs but Jones says that REALTORS® should investigate those costs in advance so they are prepared to present the information to customers and point out factors that might impact insurance rates or availability, such as an aging roof. “We look at the cost of buying the home, but we really live with the monthly payment, which includes mortgage interest and the costs of maintaining the home, of which insurance is a significant factor,” he emphasizes.

View the video: naborvideos.com/ legal-q-a/homeowners-and-floodinsurance-will-impact-real-estatesales-in-2022/

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A Flood of Concern Andrea Pelletier

Rodiana Andis

Pelletier says she always asks REALTORS® to confirm that the seller has a flood policy. “That will manifest into a much more preferred rate for a homebuyer,” she says. Flood insurance costs are rising because flood-zone maps were modified to include more properties that weren’t deemed to be in flood zones in the past, Andis says. She also recommends researching other insurance options before turning to the staterun Citizens Property Insurance Corporation, known as the “insurers of last resort” for homeowners who can’t find affordable coverage in the private marketplace. “I caution about going with them because of their limited coverage options,” she says.

In addition, Citizens’ policyholders can also be assessed on top of their premiums and deductibles. Citizens states in black and white: “Citizens is funded by policyholder premiums; however, Florida law also requires that Citizens levy assessments on most Florida policyholders if it experiences a deficit in the wake of a particularly devastating storm or series of storms.” With premiums increasing, policyholders feeling the pinch can raise their deductibles without reducing coverage, Andis advises. “I highly suggest to all consumers to study their policy and ask questions of their insurance agent—go over what it covers and don’t just look at the price,” she says. “You need that policy to respond to a claim. Don’t just look at dollar signs.” N A P L E S A R E A B O A R D O F R E A LT O R S ®

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FOR OPENERS

N A P L E S R E A LT O R ®

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DIGITAL TRANSACTIONS? Unraveling the mysteries of cryptocurrency’s potential in real estate purchases BY KAREN FELDMAN

fter creeping up in value since its launch 13 years ago, cryptocurrency has gripped the imaginations—and disposable incomes—of a growing number of investors. Now that they have had it for a while, some are looking to convert those intangible assets into something they can touch, such as valuable art or real estate. Even though more than 81 million people now use blockchain wallets, which hold their cryptocurrency, they are discovering it’s not that easy to spend these funds. There are a variety of reasons that digital currency hasn’t become widely accepted as a means of purchasing property, although a smattering of sales is taking place. The country’s second-largest mortgage lender, United Wholesale Mortgage, canceled a planned national rollout to accept cryptocurrency just months after launching a pilot program last summer after determining there wasn’t enough demand. Naples REALTOR® Kimberly Alvord, of Kimberly Luxury Group at Royal Shell Real Estate, had a buyer looking to spend $3 million on a local estate. “He was an Instagram influencer who had moved here from China and wanted to pay in cryptocurrency,” she says. “It’s been around for a while, but it was the first time anyone had asked me about it.” She contacted Naples attorney Eric Olson, who owns Cardinal Law, P.A., and Cardinal Title, Inc. He found that underwriters weren’t interested. In the end, Alvord says, the seller did not want to accept it, either. However, both Alvord and Olson think there are several reasons it could work well if people are willing to give it a try. Olson says there are apps, such as BitPay, that

can convert crypto to cash prior to closing. “With a real estate closing, you can convert the money and do it in cash like normal,” he says. “Theoretically, if you want to stay in crypto, you can convert to a stablecoin, like a U.S. Dollar Coin (USDC), and create a (digital) wallet, then transfer the wallet’s key (private password) to the seller. The seller would confirm they received it and what’s in the wallet. The closing company holds it in escrow until the transfer of the wallet is confirmed and then completes the transfer.” So, who is buying property with crypto? The Wall Street Journal reports that investors who have made their fortunes in digital currencies are buying high-end properties with it, although many of these transactions involve converting the cryptocurrency to cash before closing. So why use it?

◉ It’s available 24/7 with no middleman. ◉ It attracts buyers with ready income, provided the cryptocurrency’s value is high.

◉ For real estate specifically, blockchain

technology could simplify verification of property ownership by providing instantly verifiable proof of who owns a property and could allow multiple parties to own portions of a property, thereby lowering the amount of money needed to make a purchase.

The major drawback to cryptocurrency is that its value can fluctuate dramatically. Bitcoin, for example, traded at close to $69,000 per coin in November 2021. By early April 2022, its value was about half that.

CRYPTO LINGO If you are interested in delving into the crypto arena, here are some of the basic terms you should know: BLOCKCHAIN: Think of it as a checkbook that’s distributed across computers around the world. Transactions are recorded in blocks then linked on a chain of previous cryptocurrency transactions. Anyone who owns cryptocurrency has a copy, creating a unified transaction record that is updated by software whenever a new transaction takes place. CRYPTOCURRENCY: Forbes Advisor describes it as “decentralized digital money based on blockchain technology.” The most familiar versions of this digital, encrypted, and decentralized currency are Bitcoin and Ethereum but there are some 5,000 varieties. No central entity manages it or controls its value. Instead, that’s largely determined by users via the internet. It can be used to buy goods and services and as an investment. DEFI: Stands for decentralized finance, an emerging technology based on secure distributed ledgers like those used by cryptocurrencies. It allows investors to hold money in a secure digital wallet rather than a bank, eliminating the fees typically charged. Anyone with internet access can use it and can transfer funds in a matter of minutes, eliminating intermediaries. NFT: A non-fungible token is a digital asset that represents a real-world asset, like artwork or real estate. These are bought and sold online, usually with cryptocurrency. STABLECOIN: A class of cryptocurrencies that aims to offer stable prices backed by a reserve asset, thereby providing the immediacy and privacy of crypto while mitigating the volatility. If you want to take a deeper dive, visit the U.S. Securities and Exchange Commission’s investor.gov.

N A P L E S A R E A B O A R D O F R E A LT O R S ®

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FOR OPENERS

WAIVING A HOME H INSPECTION? This untraditional practice can lead to costly headaches the buyer didn’t see coming BY ROBIN F. DEMATTIA

N A P L E S R E A LT O R ®

ow hot is the real estate market? Homes are selling so quickly that buyers are waiving home inspections. That might get them a home, but it also might get them into unforeseen trouble. “Unless it’s a crazy seller’s market, I don’t know anyone who would waive inspections,” says Gregory Economos, broker associate with William Raveis Real Estate. But this fevered environment shouldn’t deter buyers from having inspections done. “Buyers are so desperate to get a property that they sometimes aren’t being as rational as they would have been,” he says. “Your home is the biggest investment of your life. Be cautious.”

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Economos says these buyers are running the risk of an issue arising after closing that is so costly that they don’t have the money to pay for it—and that could ruin their finances, he says. The only justifiable times to waive an inspection, Economos says, are for teardowns or for new construction that comes with a builder’s warranty.

What Lurks?

Because sellers are receiving multiple offers these days, there are ways to make an offer attractive without waiving the inspection. “Make

If a buyer does not live locally, Economos offers to accompany the inspector not only as a service to the customer but for his protection. “It covers my own liability issue,” he says. Perry DeSiato Perry DeSiato, a REALTOR® with Downing-Frye Realty, says that even before an inspection, there are often clues to the condition of a property. “When you walk into a home, you can tell if a home is in good order and well-kept or if there are legitimate concerns,” he says. DeSiato, who was in the building arena for 30 years, looks closely at inspection stickers on air-conditioning units and checks for rust marks on hot water heaters. Like Economos, he also attends inspections, even if he’s representing the seller. “I don’t get involved but will ask at the end if there are any concerns, so I can explain to the seller without any misinterpretation,” DeSiato explains. He keeps a book of dependable, quality vendors, such as handymen, plumbers, electricians, and radon and mold mitigation specialists should a buyer or seller need to make a repair or upgrade. First-time homebuyers, especially, should never waive an inspection, DeSiato says. “This is a big deal for them, and you want to minimize their nervousness and frustrations,” he says. “They’ve never owned a home before, so they have no idea what to look for.” N A P L E S A R E A B O A R D O F R E A LT O R S ®

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a Si De

Moving Forward

Assisting the Customer

Perry

Termites, plumbing and electrical issues, and roof damage are some of the biggies that are uncovered during an inspection. Inspections can also reveal illegal additions or installations or survey mistakes that lead to encroachment issues. And these “happen more frequently than you think,” he says. Headaches don’t stop there. Mold and elevated radon levels may lurk. While there are often visible signs of mold, only an inspector can reveal if it’s in ductwork or walls. “I’ve had some inspectors come in and say they can smell it automatically,” he says. Septic systems and well water should also be checked, Economos advises. Insurance companies may also require an inspection, especially a wood-destroying organisms report, he notes. And some insurance companies are no longer issuing policies for homes with roofs over 10 or 15 years old.

sure you’re fully approved or have no financing contingency,” Economos suggests. A buyer can also conduct an informal inspection and let the seller know it is for their own information and the sale is not contingent upon the findings. If issues are discovered, “you can ask for repairs or credits, but the seller in this market may say no, so it’s up to the buyer” to decide whether to proceed, he says. For sellers whose home may need some upgrades, Economos recommends offering a credit for the new owners to tackle the project to save time and energy. “It’s easier and causes less of a headache” for the seller. REALTORS® who represent sellers need to acknowledge material defects, he adds. “If a seller’s agent knew and didn’t disclose it, it can cause litigation, which no one ever wants,” Economos says. “It doesn’t happen often, but with the prices of homes in Naples—and people are litigious—it would not surprise me.”

6/20/22 2:54 PM

FOR OPENERS IN STORE FOR YOU

SUPPORT FAIR HOUSING BY TATIANA LONDONO, NABOR® STORE MANAGER

iscrimination in the real estate industry persists. You, as community leaders, have the opportunity to be a part of the transformative solution, providing equal service to all. Show you support for equal opportunity in housing by displaying this poster and sticker sold at our NABOR® REALTOR® Store: ◆ Poster for indoor or outdoor, size 24’ x 18’, made of weatherresistant plastic. NABOR® member price: $22.95+tax ◆ Sticker for indoor, size 4’ x 4’, made of paper. NABOR® member price: $0.69+tax.

N A P L E S R E A LT O R ®

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D O W N T O W N L I V E

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ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, MAKE REFERENCE TO THIS WEBSITE AND TO THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE. All artist’s renderings are proposed concepts shown only for marketing purposes and are based upon current development plans, which are subject to change by the developer, Aura at Metropolitan Naples, LLC, which reserves the right to make changes at its sole discretion, without prior notice or approval of the purchaser. This project has been filed in the state of Florida and no other state. This is not an offer to sell or solicitation of offers to buy the condominium units in states where such offer or solicitation cannot be made. This advertisement does not constitute an offer where prior registration or other qualification is required. Prices, availability, plans, features, dimensions, specifications and amenities are subject to change at any time without notice. All Rights Reserved. Equal Housing Opportunity.

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South Carolina REALTOR® created this app after experiencing a situation that made her fear for her personal safety; it was launched in April 2020. Florida Realtors® strongly endorses it.

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Set up a list of emergency contacts (three recommended). Create a showing with a pre-set timeframe of your choosing (such as 30 or 45 minutes) and capture a secure image of the client’s face at the beginning of the showing. After the showing ends, you click “end showing.” If you fail to press “end showing,” your emergency contacts will be notified of the exact location and time, and authorities will have a secure image of the client’s face. Free to download from the Apple Store, Google Play, and floridarealtors.og. However, the “Create Showing” functionality needs an in-app subscription: $4.99/month or $49.99/year.

How do I explain to the prospective buyer why I am taking their picture?

Say: “The homeowner has requested that we have a record of every person entering their home” or “My company requires I have a record of who I am with while showing properties,” the app’s founder advises. Learn more: safeshowings.com or floridarealtors.org/tools-research

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800-670-3110 www.TrustcoBank.com Subject to credit approval. 1 - Applicable to our portfolio mortgage product. If you fail to qualify for that product, you may be offered a mortgage that does have an appraisal fee, borrower-paid PMI, and a tax escrow account. *Private Mortgage Insurance. Lender Paid Private Mortgage Insurance on loans over 89.5% Loan-to-Value. Please Note: We reserve the right to alter or withdraw these products or certain features thereof without prior notification. NMLS #474376 20

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Conroy, Conroy & Durant, P.A.

Conroy, Conroy & Durant, P.A. (“CC&D”) is a boutique real estate law firm which has focused on real estate solutions for over 27 years. Founded by attorneys with deep roots in the community, CC&D has grown to help our clients navigate Naples’ increasingly competitive and sophisticated real estate market. Whether seeking representation in the purchase or sale of commercial or residential property, our team of lawyers has experience handling complex real estate transactions with integrity. Reputable: CC&D has four attorneys who are board certified in real estate law by the Florida Bar. In addition, each partner has achieved an AV-rating by Martindale-Hubbell, demonstrating the highest level of professional excellence and ethics. Reliable: Over the years we have not only developed procedures for the various types of real estate transactions, but also established relationships with local companies involved in real estate transactions, both of which allows us to provide our clients with reliable and prompt service.

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FOR OPENERS

ON MESSAGE On May 1, the National Association of REALTORS® showcased a new certificate course to help real estate professionals combat implicit bias called “Bias Override: Overcoming Barriers to Fair Housing.” “REALTORS® are committed to upholding fair housing laws and the Code of Ethics. However, our brains sometimes take shortcuts that can unknowingly lead us astray. This innovative certificate course helps participants recognize unconscious biases and how they impact interactions, ultimately enhancing professionalism and expanding business opportunities as we work to make homeownership accessible to all.”

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Minutes from downtown – miles from the crowd Villa Homes

Comfort Casual

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Visual Representation of Kitchen. Not actual model

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is proud to offer one and two floor residences that feature two and three bedroom floorplans built as twin villas, each with individual and attached garages. Well-appointed units that features premium construction specifications as concrete block construction, wind rated windows and doors and premium brick paver walk and driveways. Interior features include such equally impressive standards as Kohler fixtures, wood cabinetry with soft close hinging, Whirlpool kitchen and laundry appliances and quartz countertops. Using superior and value added structural components as building standards has set the community apart from other new construction developments in Naples, Florida.

239.691.4455 5840 Whitaker Rd. Naples, FL 34112

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This one’s for you! 6/1/22 1:20 PM

FOR OPENERS

2022 LEGISLATIVE SESSION WRAP-UP What were the hottest issues for Florida Realtors®— and what was the outcome? BY CATHY CHESTNUT

lorida Realtors® was intensely focused on the state capitol during the 2022 Legislative Session, which ran from January to March, watching out for REALTORS® and property owners’ interests. Florida Realtors® provides programs, services, and legislative representation to 225,000 members in 51 boards and associations. Its mission is to advance Florida’s real estate industry by shaping public policy on real property issues. “Support of Florida homeownership programs was on full display,” the association declared after the session wrapped up, “thanks largely to the impassioned advocacy efforts of REALTORS® throughout the state. As a result, homeownership and other related housing programs will receive $362 million this coming fiscal year.” Here are key issues it was tracking:

Hometown Hero Housing Program

Stance: Supports | Status: Approved Legislators created the new Hometown Hero Housing Program (HHHP), a zero-interest revolving loan program that provides down payment and closing cost assistance for qualified firefighters, law enforcement officers, teachers, nurses, and other hometown hero professions. The program was funded at $100 million for the 2022-2023 fiscal year. These loans are repaid once the home is sold, rented, or refinanced, creating a continuous cycle of homeownership for some of Florida’s most essential workers. The governor also announced his support of nearly $363 million for affordable and workforce housing in the 2022-2023 budget—the highest total in 15 years.

Funding for the State Housing Initiatives Partnership (SHIP) and State Apartment Incentive Loan programs (SAIL)

Stance: Supports | Status: Approved The State Housing Initiatives Partnership (SHIP) and State Apartment Incentive Loan (SAIL) programs 24

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serve low-income Floridians. Lawmakers allocated $262 million in the 2022-2023 fiscal year budget to the State and Local Government Housing Trust Funds for these programs. SHIP funds provide first-time homebuyers with down payment and closing cost assistance and are used to preserve existing housing. SAIL funds are used to rehabilitate existing apartments in dire need of repair or to build new units where needed.

Condominium Reforms

Stance: Supports condo documents transparency and other reforms | Status: Approved in Special Session The June 2021 collapse of the Champlain Towers South condominium building in Surfside, Fla., highlighted the need to review current laws governing the construction, maintenance, transparency, and daily operation of these residential buildings. Florida Realtors® has advocated for more transparency of community association documents and other issues for years. While initial legislation wasn’t passed, strides were made in a special session held in midMay, when Senate Bill 4D - Building Safety was passed. It creates statewide “milestone inspection” requirements for condominiums and cooperative buildings.

Rising Property Insurance Costs

Stance: Supports reforms to address Florida’s escalating insurance costs | Status: Approved in Special Session Property insurance costs continue to rise at alarming levels in many parts of Florida due to several factors. Higher insurance costs and lower levels of coverage due to changing underwriting guidelines are making homeownership unaffordable for many Floridians and driving private insurers out of some areas of the state. Florida Realtors® has supported comprehensive property insurance legislation designed to address Florida’s escalating insurance costs. This year, two proposed bills

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did not move forward. However, state lawmakers met in mid-May for a week-long special session in Tallahassee to discuss solutions. It passed Senate Bill 2D - Property Insurance, which addresses roofs, legal fees, policyholders, insurers, and other key issues.

Business Rent Tax

Stance: Supports ending this tax | Status: Failed The business rent tax currently stands at 5.5 percent but will drop to 2 percent in the coming years based on the work of the 2021 Legislature. Two proposed bills would have eliminated this burdensome tax but neither one passed.

Water Quality and Environmental Funding

Stance: Supports proper funding | Status: Approved Several environmental measures moved forward totaling $1.6 billion for Everglades and springs restoration, wastewater and resiliency programs, and Lake Okeechobee Watershed Restoration. Other bills relating to the cleanup of harmful substances in soil and groundwater, the establishment of the Statewide Office of Resilience within

the governor’s office to coordinate flooding and sea levelrise resilience, alternatives to landfills, and septic system inspections passed.

Help Floridians Strengthen Their Homes

Stance: Supports | Status: Approved House Bill 701 provides sales tax relief to homeowners to harden their homes from storms, which helps to keep more money in their pockets and fight insurance rate increases.

Private Property Rights

Stance: Supports legislation that creates a statewide, uniform system of commonsense regulations for vacation rentals while protecting private property rights | Status: Mixed While there is no uniform system of regulations, a new law, Senate Bill 620, allows private, for-profit business owners to recover business damages caused by new or modified local government ordinances that cause a reduction of at least 15 percent of the business’s profit, including vacation rental property managers. N A P L E S A R E A B O A R D O F R E A LT O R S ®

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What do Opportunity Zones mean for Collier County? Will they attract more industrial activities?

Immokalee Rd

NEW HORI-ZONES Immokalee Rd

Pelican Bay

Golden Gate Blvd W

North Naples

BY ARTIS HENDERSON

Pine Ridge Rd

sk REALTORS® and business leaders in the Naples area about local industrial real estate and the answer is often the same: There isn’t enough. “The vacancy rate on industrial properties is between one and five percent, which is incredibly low,” says Bill Poteet of Poteet Properties, who has received commercial REALTOR® awards from both Florida Realtors® and the National Association of REALTORS®. “It’s a question of zoning,” Poteet says. “Industrial properties are not the most popular properties in town. People don’t want to mix cement trucks with residential communities. Developers right now have a gated community concept that works well for them and is very successful economically. We’re seeing people buy land and zone it residential or commercial, usually retail or office, mostly C1, C2, C3, or C4.” In fact, he adds, many commercial areas are being rezoned into residential areas. Recently, the Courthouse Shadows retail center in East Naples has been torn down and swapped out for a 300-unit apartment complex. The Naples Design District has plans for mixed-use spaces that combine commercial and residential. With residential use dominating real estate and commercial slotting in behind, that leaves little room for industrial

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spaces. This can potentially inhibit the future expansion of industry in the area, Poteet says. “Communities need a balance. Otherwise, we have to rely on one or two industries to maintain the economy. In Collier County right now, that’s construction and tourism with some agriculture. We don’t have a major manufacturing component. And we won’t get it unless we have more industrial properties.” When REALTOR® Chip Olson, manager and broker at RE1 Advisor, moved to Naples in the mid-1980s, industrial properties weren’t so rare. He remembers an industrial park off Airport Road that felt like it was far outside of town. “Guys would go out behind the buildings and shoot guns because there was nobody around to bother them,” he says. “Now you look at the Airport Road area and it’s totally surrounded by residential neighborhoods.” The area north of J and C Boulevard was the crème de la crème of industrial property in the late ‘80s and early ‘90s. Olson remembers friends who kept a ski boat on one of the lakes in the area because nobody was around. Then developers came along and transformed the property into residential communities. The days of industrial property—and awaiting ski boats—are long gone.

Golden Gate

Naples

East Naples

Lely

South Naples

Naples Manor

Pine Ridg

Marco Island

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Everglades Blvd N

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Immokalee

Harker

Oil Well Rd

Collier County Opportunity Zones

Alligator Alley

Pine Ridge Rd

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Collier County has grown so fast over the last 30 years that industrial spaces have been outpaced by residential and commercial real estate, which, Olson says, may ultimately be to the detriment of Collier County. “For a healthy community, you have to have a balance” in employment sectors and economic diversity. Still, he recognizes that industrial properties can be a hard sell due to noisy trucks and other activities. “When you go into industrial zoning, it’s not as clean as office and retail space,” Olson says. “It’s not always preferred to have an industrial site backing up 28

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to your residential community.” Olson has seen out-of-state businesses try to relocate to the Naples area without much success. They’ll move their headquarters to Collier County, but they end up going back north because they can’t find labor or materials. “We’re at the end of the world,” Olson says. “At the end of the day, it’s easier to put a production plant in Des Moines.”

Opportunity Zones Though not specifically targeted to industrial real estate, many Naples REALTORS® are enthusiastic about the

presence of Opportunity Zones in Collier County. What are Opportunity Zones? Per the Internal Revenue Service, they are “an economic development tool that allows people to invest in distressed areas.” Their goal is to promote economic growth and job creation in low-income communities while providing tax benefits to those who invest in them. Opportunity Zones were developed through the Tax Cuts and Jobs Act of 2017. The first Opportunity Zones were designated in April 2018. In a news release published soon after the designation of the Collier County Opportunity Zones, a county official

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“Communities need a balance. Otherwise, we have to rely on one or two industries to maintain the economy,” says Bill Poteet of Poteet Properties optimistically stated: “The Opportunity Zone designation will be a boon to our highest-need areas, Immokalee, Golden Gate, and Naples Manor, and will boost growth investment. We look forward to seeing local investors and businesses take advantage of the benefits provided in our Opportunity Zones.” Each state nominates communities to become Opportunity Zones, and the U.S. Department of the Treasury is responsible for certifying the nominations. There are currently 8,764 Opportunity Zones throughout the United States. Collier County has five of them:

• Three census tracts in and around

THE COLDEST WATER

Immokalee, from Lake Trafford to the west to the county line to the east • The Naples Manor community west of Collier Boulevard, north of U.S. 41 East, and south of Rattlesnake Hammock Road • Land in Golden Gate, west of Collier Boulevard, south of Golden Gate Parkway, and east of Santa Barbara Boulevard

The Coldest Water was launched by Collier County entrepreneur David Ahmad in his one-car garage in 2015. By 2021, his products were being sold globally, operations had moved to an industrial warehouse, a retail shop was opened at Coastland Center, and the company was named among Inc.’s fastest-growing companies in the nation. Manufacturing is a robust component of the local economy, although industrial zoning has been waning.

Qualified Opportunity Zones were designed to spur economic development by offering tax incentives to investors who invest capital gains in businesses operating within the zone. The capital gains must be invested in a Qualified Opportunity Fund, which is an investment vehicle organized for the purpose of investing in Opportunity Zone property. The incentive? A deferral, reduction, or potential elimination of certain federal capital gains taxes depending on how long the investment is held. Investors don’t need to live inside an Opportunity Zone, but a Qualified Opportunity Zone business must earn at least 50 percent of its gross income from business activities within the zone. Greater Naples Chamber of Commerce Director of Business and Economic Research Melanie Schmees says “there has definitely been an increased interest” in these zones, with inquiries on their locations and tax benefits. “As the county grows, the zones and the areas surrounding these zones are adding

more services, restaurants, and other commercial spaces” although businesses within the zones don’t need to take advantage of the tax perks. She predicts there will be much more interest and activity when ongoing and proposed infrastructure and road projects are completed because these will make these areas more attractive. These include the widening of Collier Boulevard and State Road 82 in Immokalee. Schmees says the Immokalee Airport has parcels within the Immokalee zone and has received increased interest in the past year. “It’s also important to note that some of these tracts are also overlaid with other designations meant to promote economic growth, such as Innovation Zones and neighborhoods under Community Redevelopment Agency oversight, so there are a variety of resources associated with the areas.” According to an online Opportunity Zones database (Opportunity Db), the total population of the five Opportunity Zones within Collier County is roughly 36,000. The median household income in the zones is between $27,000 and $57,000. The median home values range from $115,000 to $404,000, depending on the zone. The percentage of households below the poverty rate ranges from 12 percent to 44 percent, compared to the statewide rate of 13 percent. Crexi, the online commercial property real estate listing service, has several local properties listed with Opportunity Zone designation. These include a Kentucky Fried Chicken, a senior living complex, and a tract of undeveloped land—all in Immokalee. Opportunity Zones do just what they’re designed to do, says Stuart Tackett a REALTOR® with KW Commercial. These zones attract investors and commercial developers to areas that might not normally draw investment, he says, like the tracts in Immokalee and Golden Gate. Which makes sense, he says. “We don’t need an Opportunity Zone in Port Royal.” Tackett believes Opportunity Zones are a great instrument. “They’re a win-win for investors and these communities,” he says. N A P L E S A R E A B O A R D O F R E A LT O R S ®

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PRICED OUT Community-wide, collaborative efforts are underway to create attainable and workforce housing in Collier County BY DICK HOGAN

rush of wealthy pandemic refugees is fast displacing Collier County’s essential workers and now the county is trying an array of tactics to keep them here. But business and government leaders alike are worried that might not happen quickly enough to sustain the quality of life that brought the newcomers in the first place. “Our real problem is that we need people to fix our cars, build houses, serve our food, cut our grass, get stuff done,” says Maurice Cossairt, chair of the Naples Area Board of REALTORS® (NABOR®) Governmental Issues Committee. “And they’re being lost in the fray.” District 5 Collier County Commissioner William “Bill” L. McDaniel Jr. says the problem can be solved by streamlining construction permitting along with incentives for builders to include lower-priced units in future rental projects.

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The county’s message for nonprofit and for-profit builders alike: “Come back to me with a deal—a piece of property that is developable that provides for housing affordability—and even if we have to take money out of ad valorem (taxes) and backfill it out of the sales tax revenue, then we’ll do the deal.”

Gimme Shelter

Meanwhile, high prices in Collier are pushing the workforce out altogether, says Mary Waller, a member of the NABOR® Board of Directors. With few single-family listings under $400,000 in Collier, most working couples are now shut out of homeownership, says Waller, who also serves on the Collier County Affordable Housing Advisory Committee. “To buy a $400,000 property, you need to be making at least $117,000 to even qualify for a mortgage,” she says. “Mostly, people can’t afford that, even with a double income.”

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The choices aren’t great even for those who try to find a house in a nearby community and commute to Collier, she notes. “Even if you go to Estero or Bonita Springs, prices are not much different from prices in Naples.” Many workers travel from Lee, Hendry, Glades, and even Charlotte counties to their jobs in Collier County each day: The commuter traffic (and congestion) on I-75 and U.S. 41 clearly illustrates this fact. Community leaders have noted that when local employees live outside of the county, they are not participating in local school, church, or nonprofit activities, or shopping or paying taxes in this community. And emergency and law enforcement commuters are at a distance when a natural disaster strikes. If people can’t live closer to their jobs, Waller says, “they’ll wind up going to Tampa or into the middle of the state. They just leave altogether. You’re going to lose your workforce.” Still, she remains somewhat optimistic. “Little by little, things are happening.”

Keeping Them Here

An array of rental assistance programs and new multi-family construction are springing up to provide some solutions. Most ambitious is a 350-unit apartment complex being built on 25 acres at the site of the defunct, 167-acre Golden Gate Golf Course, purchased by the county in July 2019 for $29 million. The complex will include 250 units for essential workers making 80 to 120 percent of the local median income. The county will continue owning the land for this purpose, and it cannot be sold. “It’s teachers, nurses, EMTs, firefighters, and police,” says Collier Community Foundation President/CEO Eileen Connolly-Keesler. The Collier Community Foundation collaborated with other contributors to raise $10 million to defray costs to keep rents down. “We were trying to get our essential employees to live in Collier instead of driving an hour or two,” she says. “They were priced out four years ago and now they’re really priced out.” The Golden Gate project has experienced the same issues that have plagued workforce housing in Collier, Connolly-Keesler says. “The most difficult issue is getting the rezoning done and getting it to the point that we can actually begin construction due to the 32

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policies of the county and all the time this takes,” she laments. “Why is it taking twoand-a-half years to be able to put a shovel in the ground?” A delay that long is disheartening to the people and organizations that financially back workforce housing, she says. “The difficult thing, at least for these donors who have been at the table, is this project has been so slow moving that I think we’re going to have to make changes to get donors to want to participate,” Connolly-Keesler says. Donors were excited to support the project and watch it become a reality—and it hasn’t yet. Connolly-Keesler believes this publicprivate partnership was the first of its kind in Florida, and these collaborations will be key to future projects. Private enterprise isn’t suited for providing attainable housing stock, Connolly-Keesler says. “A developer can’t make this work if you have to pay $50 million for the land. The numbers will not work.” Future public-private partnerships will likely be smaller given the lack of large, undeveloped tracts. “Even small parcels can give you 40 units or 25 units,” ConnollyKeesler says. When it comes to attainable housing, “we’ve just got to take it where it is.”

Roots of the Problem

The shortage of attainable and workforce housing may just now be coming to a head, but the problem has been a long time in the making, says Greater Naples Chamber of Commerce President/CEO Michael Dalby. “Some of it dates back to the real estate recession in 2008,” he says. “We haven’t built enough new homes, whether they’re multi-family or single-family homes, to meet demand.” Dalby says there are several factors that have combined to create today’s crisis: delays in approving and permitting new developments, high land prices, a shortage of construction labor, and the rising cost of building materials because of national demand amid supply chain hiccups. “A lot of factors have come together to where it’s difficult to come up with short-term solutions,” he notes. Most recently, demand for housing rapidly increased over the past two years during the pandemic as more people moved to Florida. According to the Florida Office of Economic and Demographic Research, an estimated

NAPLES RENT BY THE NUMBERS Rent from March 2020 to March 2022:

48.6 percent increase March 2022 median rent for one-bedroom apartment:

$2,054

March 2022 median rent for two-bedroom apartment:

$2,433

SOURCE: apartmentlist.com

329,717 new residents settled in Florida between April 2020 and April 2021. “Oftentimes, those individuals were cashing out from someplace else,” Dalby says. “They had the money and the means to be able to buy at a higher price and they’re oftentimes not continuing on as part of the workforce. They’ve completed their work. They’re retired or not working.”

Helping People Stay

Home prices have risen to the point where it’s hard to help the people who are working to buy in Collier County, says Michael Puchalla, executive director of the nonprofit Housing Development Corporation of SW Florida, which is dedicated to homebuyer,

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credit, and lending education. Properties are being snapped up with cash transitions, which is shrinking available housing inventory down to historically low levels. “There just hasn’t been much, if at all, inventory,” he says. “We had several people who were in a good spot credit-wise, debt-ratio wise, who made a couple of offers and they literally weren’t in competition because the cash offers were stronger. Their offers were not accepted.” The high cost of real estate has spilled over to the rental market. “Because of the increase in the home values,” Puchalla says, “we’ve recently seen massive increases in rent payments, so that’s also now become a whole different situation.” Legal Aid Services of Collier County and the Housing Development Corporation of SW Florida have

partnered with the county to create an Eviction Diversion Program to facilitate mediations between landlords and tenants to avoid evictions. But the bottom line is that the programs can’t provide a permanent solution for renters or homebuyers, Puchalla says. “They’re not going to be able to afford to go out and buy something. They can’t afford the rent they’re in but at least the county has some short-term resources— between 12 and 18 months of assistance—that can help to keep their heads above water with the hope that maybe the market will settle down or that households can increase their capabilities.”

An Uncertain Future

The creation of workforce housing units has proceeded at a snail’s pace in part because of

the long permitting process for construction in general, says McDaniel. “Since I became a commissioner in 2016, I’ve been participatory in approving 9,500 multi-family units. Do you know how many are on the ground? 1,600,” he says. He calls the standard timeframe of 36 months from project pre-application to receiving a certificate of occupancy “a systemic problem.” During these long lead times, developers “have to put cash into it, and that starts to impact your rate of return on the other side,” McDaniel says. “Then you add $30,000 in impact fees.” Reducing impact fees would theoretically reduce the construction cost and the rent but there’s a catch, McDaniel admits: “There’s no guarantee that the developer receiving that benefit is going to pass it on to the consumer.” N A P L E S A R E A B O A R D O F R E A LT O R S ®

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Calculating Value Industry experts explain why obtaining sound appraisals has been challenging in this unprecedented market BY DICK HOGAN

s Collier County’s real estate inventory gets both scarcer and pricier, REALTORS® and property appraisers are using all their skills to help buyers navigate the trials of getting a home appraised due to low inventory, scarce comparable properties, and high expectations. The supply of homes is drying up largely because of an influx of buyers investing in the market or relocating here, says appraiser Chris Magher of Magher Appraisals in Naples. It’s not unusual to have a pool of 20 buyers bidding on two homes, she says, “so they’re all outbidding one another.” REALTOR® Christine Citrano of the Citrano-Batten team at John R. Wood Properties says that sometimes, there simply aren’t many houses to show a prospective buyer. “I remember several years ago, when I had a buyer coming into town to look at properties, I’d have three days when I was showing them 25 or 30 homes,” she says. “Now? I’m lucky if I have six to show them. It’s an inventory problem, pure and simple.”

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Counting Comps Here’s how the Federal National Mortgage Association (Fannie Mae) decides what comparable sales are OK for an appraiser to count:

NEIGHBORHOODS As a result, it’s getting harder to draw a bead on a home’s value. Recently, Citrano and her partner were closing on a unique property. “It’s not in a gated community, it’s not cookie-cutter, it’s not a one-builder kind of community,” so obtaining accurate appraisals for the property wasn’t easy. “There were no comparable properties,” Citrano says. “Until you close, you don’t know what the actual value is going to be, and that is really challenging.”

neighborhoods are going up at different rates of increase.” And that rate of increase is no small thing. “It’s not unusual to see market rate increases at between three and five percent per month, compounded,” says Carroll. Another way the scenario plays out is when the great expectations of the seller and listing agent bump into the hard ceiling of a market-driven appraisal, says William Dukes, senior mortgage loan officer of Naples-based

The appraisal process seems to be taking longer because there is just an overall lack of inventory,” says REALTOR® Christine Citrano

Sales in the neighborhood are the gold standard, but similar neighborhoods are acceptable if that’s all there are. The appraiser can’t just expand the neighborhood’s boundaries to pick up some comps: The identity of the competing neighborhood and an explanation of why it’s comparable is required.

SAME THING

Comps should have similar physical and legal characteristics such as site, room count, gross living area, style, and condition. They don’t have to be identical but should appeal to the same buyers looking at the home being appraised.

TRUE OR NOT

If there are no truly comparable homes available, properties that aren’t truly similar may be used but the appraiser must explain why.

DISTANCE This story turned out more or less happily. “The property ended up coming in over the appraised value and, fortunately, our buyer says, ‘OK, we’ll make up the difference.’ But I questioned the appraisal to begin with, simply because there weren’t enough comps.” Situations like this—once rare—now aren’t unusual, Citrano reports. “There have been a lot of properties pending, waiting for appraisals to be done. The appraisal process seems to be taking longer because there is just an overall lack of inventory.”

Finding Comparable Properties and Neighborhoods Appraiser Cindy Carroll of Carroll & Carroll Real Estate Appraisers & Consultants in Naples agrees that it’s a challenging and complicated time to be doing appraisals. Comparable sales (comps) “are hard to find, and there’s also the difficulty of extracting from the market the rate at which values are increasing,” Carroll explains. “Each neighborhood is different—and 36

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Summit Mortgage Corp. “Eventually, the comps do catch up a bit,” he says. “The big issue is when a listing agent goes in for a listing appointment and they already have in mind a robust listing amount that they believe will be aggressive, based on the comps they’re seeing. They go in with that seller and find the seller wants to go 10 percent above that. That is when it starts to cause an issue, because in those situations, you already have a REALTOR® who’s being aggressive and their seller is like, ‘Not good enough.’” The appraisal issue comes up, Dukes says, when a buyer falls in love with the house and agrees to pay that seller’s dream price—but needs a mortgage to make the deal work. “It’s tough for that to appraise,” Dukes says, because the rules of appraisals don’t allow it. “Mortgages can never lead the way with appreciation. Cash leads the way.” Whether a REALTOR® is representing the buyer or the seller, it’s important to alert them when the home isn’t likely to appraise at the agreed-upon price. “Otherwise, you end

The straight-line distance and direction the comp is from the home being appraised—for example, 1.75 miles NW— must be specified.

NUMBERS MATTER

At least three comps must be cited, and the home being appraised may be used as a fourth if it’s been sold previously. Contract offerings and current listings can be used as supporting data but don’t count among the three-comp minimum.

NOTHING GOING ON

If there’s been no activity at all in the area for more than 12 months, older sales may be used but the appraiser must explain why.

OTHER ACTIVITY

Foreclosures and short sales may be cited as comparables if the appraiser believes they are the best and most appropriate sales available. SOURCE: Federal National Mortgage Association

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up going down a dead-end road,” Citrano says, “and everybody’s frustrated.” Sometimes, a buyer’s emotions can get in the way of clear thinking, Citrano says. “Your home, yes, is a financial purchase that you are making and a rather substantial one. But it is tinted with a lot of emotional value as well.” Once they sign the contract, “in their minds, they’ve already painted the rooms; they’ve placed the furniture. In their minds, they’re in that house.” Ultimately, Carroll says, it boils down to “supply and demand, and in many market areas there are no listings.” In these cases, she advises: “The best you can do is research for the best, most recent, most similar comparables, go to the market and determine the market advancement for

that given neighborhood and competently make adjustments for differences in valueinfluencing characteristics.” A buyer who needs a mortgage but is really infatuated with a house sometimes decides to roll the dice—making a “cash offer” backed up by a non-refundable escrow, Citrano says. “You’re saying, ‘We’re going to buy this property, period. How we choose to buy it, we’ll figure out, but for all intents and purposes, we’re making this a cash offer,’” she says. If the buyer is trying to finance, Citrano says, it can be a risky situation “because they are essentially putting themselves and, more importantly, their escrow money at risk if they don’t get that loan.” A recent customer in this situation was

tempted to walk, but “I said, ‘No, don’t do that. We’re going to leave too much money on the table,’” Citrano recalls. Ultimately, the buyer obtained the loan and closed the transaction. “But there were a few days when they were seriously thinking of walking away from six figures.” When will these strange times end? As the Federal Reserve continues to ratchet up interest rates, Magher predicts these hikes will “slow the lower end of the market” of homes ranging from $300,000 to $500,000 because those buyers are typically younger people who need mortgages to buy their first home. However, she says, most sales higher than that are all-cash, so there’s no clear end of the boom in sight. “I don’t see it slowing down the overall market.” N A P L E S A R E A B O A R D O F R E A LT O R S ®

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To Stage or Not to Stage Is home staging necessary in this hot market? BY ARTIS HENDERSON

n today’s hot market, many REALTORS® are wondering if home staging is still worth the investment. “Without a doubt,” says Ryan Nordyke, REALTOR® with John R. Wood Properties. Every time Nordyke lists a home, he brings in Ann Waters from Naples Home Staging. Her staging has consistently contributed to his success, he says, including a recent beach house that was listed at $4 million and sold for $5.14 million. “In this kind of market, a home is still going to sell,” Nordyke says. “But if you can bring in a home stager, you’re going to get more offers.” For her home staging services, Waters charges either a flat rate or a $300 hourly fee, depending on the services required. The project price can range from $2,500 to $50,000. “We don’t base our prices on the sale price of the home,” Waters says. “We base it on the services offered and the furniture they need.” Waters and her team help with decluttering, modernizing furniture, and updating color palettes. Naples Home Staging works with both empty properties and fully furnished spaces. “Not every REALTOR® is staging in this market, which I think is a mistake,” Waters says. “They feel like anything will sell right now, but they’re missing the fact that they could get a lot more money for their clients if they only spend a little.” Margie Ogle at Staged Homes of Naples agrees. In addition to running her home staging service, Ogle has been a REALTOR® for more than 40 years, practicing in the Naples area since the 1990s. Ogle remembers the moment she knew she was in the right business. She’d launched Staged Homes of Naples in 2006, and her first aha! moment came soon after. She’d been hired to stage a condo in Pelican Bay that had languished on the market for more than a year. “Everything looked tired and worn,” Ogle remembers. “The colors were all wrong.”

Ogle worked her magic, staging the house in a matter of days. She removed the old furniture, brought in her own pieces, and put a fresh take on the decor. “It was amazing how much better it looked with the staging,” she says. She completed the job on a Friday and the condo sold at the open house on Sunday. “Since then, I’ve had many projects with that type of success, but that was my first real moment with the powers of home staging,” Ogle says. Of course, she admits that the market was slower back then. In today’s hot market, many REALTORS® are wondering if they should take the home staging step. Ogle’s answer: a definite yes. “After every staging, I step back and think, ‘Wow, this really made a difference.’ Staging highlights the best features of a home and makes the property more inviting,” Ogle explains. “It gives the impression that the home is well cared-for and it can make a space appear larger. After all, we’re selling square footage.” Even when bidding wars are the norm for scant inventory, sellers benefit from having a home stager as part of their team. “A stager can be a little more detached and truthful when it comes to updating the look of the home,” Ogle says. Like Waters, she agrees that updating the look can ultimately translate into a higher sales price.

Intentional Design

These days, many designers are using the buzzwords “intentional design.” The term first appeared in Silicon Valley and has been making its way through the tech and creative design world. Apple designer Doug LeMoine identified five elements of intentional design for the creative process: radical simplification, deep understanding, extreme focus, personal connection, and direct communication. Today, many interior designers are bringing this same level of intentionality to the interior design

process. Though home staging is different from interior design, home stagers are also incorporating similar elements, especially for luxury homes. Leia Ward, founder and principle of the staging design firm LTW Design, told Luxury Portfolio International, “Our staging designs are extremely strategic and intentionally created differently for each property. Our goal is to make the home speak to buyers as soon as they walk in the door and for every room to get better and better through their entire experience of the property.” She achieves this effect by using a monochromatic neutral color palette and what she calls “warm minimalism.” This creates an affluent vibe into which potential buyers can project themselves.

Outside Spaces

It’s not only the interior of a property that benefits from staging. Especially in Southwest Florida, a thoughtfully considered exterior can make all the difference. “The outdoor space has become the most talked about space in a house,” says Stuart Sheppard, owner of GWT Outdoors in Naples. Since the pandemic, “our clients are essentially turning their indoor living into outdoor living spaces.” Home stagers might bring the same intentionality to outdoor spaces as indoor spaces. It doesn’t take much. “Staging is not the same as decorating,” says Ogle. “A decorator will come in and want to fill the space. With staging, we use just enough pieces that the space looks really nice.” Crisp lanai furnishings and accents and elegant planters are all that’s needed to add shine. The key is hiring a professional—someone who has a fresh set of eyes. “You only have one chance to make that first impression,” Ogle says. N A P L E S A R E A B O A R D O F R E A LT O R S ®

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6/20/22 2:58 PM

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OFFER MANAGER

MLS Tech Conference & More The popular NABOR® event gave local REALTORS® a hands-on opportunity to hone their skills with MLS features BY CATHY CHESTNUT

he Naples Area Board of REALTORS® 2022 MLS Tech Conference in late March featured 17 vendors and 23 workshops, with three sessions featuring international speakers. NABOR® Director of MLS Cindy Cornman, who planned the annual event with the MLS Committee and staff, reports that 277 members who participated provided positive feedback and were thrilled to learn more about the latest Multiple Listing Service (MLS) tools designed to make their jobs easier. “Everyone seemed to have a good time,” she says. The conference is designed specifically for local REALTORS® to meet vendors and learn first-hand about their MLS tools. It was not held last year due to the pandemic, so Cornman is pleased with the turnout and response. Cornman says the top three workshops with the highest attendance focused on Remine, Form Simplicity, and ShowingTime. Remine: This high-tech data-mining tool is “great for prospecting for new listings,” says Cornman. It’s an analytical tool that uses an algorithm to assign a property owner a score based on the probability of whether they are a good candidate for selling their property now or in the near term. The score is based on a host of datapoints, such as the owner’s mortgage status, equity, length of ownership, age, marital status, income, taxes, and other factors. Owners are

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rated as high, medium, or low as a potential seller. “It’s one of the more interesting tools and it’s also one of the most underused ones,” Cornman says. “It’s a good way to find leads and get busy marketing. It’s a good start—and it’s free. Some people spend big dollars to get prospecting information. This is free but half of our members don’t know about it.” Form Simplicity: Owned and operated by Florida Realtors®, this digital transaction system helps you create offers on the spot with its integrated electronic signature service, eSign. “Form Simplicity’s paperless features save several hours per transaction, increasing profitability and productivity,” according to the product makers. It has other features for both brokers and agents. ShowingTime: This feature includes online scheduling. This helps to avoid time-consuming phone tag by showing each listing’s availability; buyer’s agents can submit appointment requests. Multiple showing appointments can also be scheduled, organized logically with a map and driving directions. It also generates automated feedback and in-depth reports that track agent, office, and listing activity, and compares properties in this market. There is also a mobile app for 24/7 scheduling access.

MLS networks in Southwest Florida and elsewhere feature some of the same MLS add-ons, but some of these tools are unique to NABOR®— including Offer Manager, which is linked through ShowingTime. Offer Manager helps REALTORS® submit and track offers on properties through MLS. You don’t have to wonder about an emailed offer going to spam or the wrong inbox because of a typo. Offer Manager delivers the offer to the right people and notifies you as soon as it’s opened via text, email, or through the ShowingTime app. “It benefits both the listing and buyer’s agents,” Cornman explains. “It keeps everyone informed of the process, which is especially important in this market, where things go so quickly,” says Cornman. “If there are 10 queries about whether the seller has decided, you can answer all 10 at one time, so it’s a great communication tool.” Listing agents can peek into Offer Manager and see how many offers are rolling in and compare them in the same context. “It makes it easier to understand all the offers coming in,” Cornman says. The listing agent and seller can review them all in one sitting—rather than trying to catch up each day with more calls and overwhelming information for the seller, Cornman says.

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Hone Your MLS Knowledge and Skills Stay tuned for MLS training opportunities through the rest of the year. The MLS is a REALTOR®’s most important tool, and it’s constantly evolving to adapt to the industry’s changing needs, streamline and enhance communication across the board, and make once-tedious tasks more efficient and seamless. The more you know about the customizable tools available through the MLS, the more responsive you can be to your customers. The NABOR® MLS Committee is increasing the number of MLS classes offered for the third and fourth quarter, including lunch-and-learn sessions

and online training videos created especially for NABOR®’s 7,000 members. “We will be reviewing products during the rest of this year, so our members need to keep an eye out for training opportunities,” says Cornman. The third quarter is a good time to catch up on some of these important updates and hone your skills in preparation of the next hopping season. Videos are a convenient way to learn on your own time. Cornman is happy to email links to specific video topics when members ask. It’s her goal, after all, to ensure members “know the full potential of the MLS system,” she says. N A P L E S A R E A B O A R D O F R E A LT O R S ®

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Project HELP NABOR® supports Collier County’s only certified rape crisis center BY KAREN FELDMAN

ecause Naples is a prosperous community, the thought of sexual crimes and domestic abuse occurring within the walls of well-manicured, gated communities seems almost improbable. But sexual abuse, drug addiction, and violence do not discriminate based on income or social status. That’s why Project HELP exists. Last year, Naples Area Board of REALTORS® (NABOR®) supported the nonprofit through its charitable work, which NABOR® President Ryan Bleggi chose to continue supporting this year. “At a meeting with Project HELP’s leaders and volunteers, we felt they were doing amazing work and decided to support them for another year,” Bleggi says. The organization began in 1986 as a weekday crisis hotline operated out of the David Lawrence Centers for Behavioral Health. Even then it was clear more was needed. Beth Knake, who ran the hotline and realized it should be available 24/7, took on the task of starting it as a community service project that became a rape crisis center—one of the first certified in the state (1995). It has evolved to include crisis intervention and counseling, court advocacy, and assisting all sexual abuse and domestic victims through the Victims of Crimes Act. The center now has a medical director, sexual assault nurse examiner, executive

director, six victim advocates (some are bilingual), and as many as 30 volunteers. The team works to empower their clients with coping skills, safety plans, and comfort. It operates Collier County’s only certified rape crisis center and runs a sexual assault support group that helps survivors heal from these traumatic experiences. Other support groups are focused on healthy relationships, grief, helping secondary survivors of sexual violence, teen survivors of sexual assault, and male survivors of sexual violence. One-on-one grief counseling is provided

for those who find themselves affected by the sudden loss of an adult or child through violence to help them work through the various stages of grief. “Living in Naples, we forget that we have plenty of problems around town,” Bleggi says. “We need to do our best to keep that topof-mind and give back whenever we can. We want to do our best to give back.” For more information on Project HELP: projecthelpnaples.org. N A P L E S A R E A B O A R D O F R E A LT O R S ®

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A Seat at the Table:

THE POWER OF RPAC Learn about the impact of investing in your industry with two RPAC Hall of Famers BY CATHY CHESTNUT

alk about being invested in your career with a true passion for the real estate industry. Brett C. Brown, 2009 NABOR® President, was recently inducted into the REALTORS® Political Action Committee (RPAC) Hall of Fame. Alongside him this year were two other familiar faces: NABOR® Board Director Paula Angelopoulos Urbinati, and Deborah Zalewski, a REALTOR® with Dream SWFL Homes. Brown, who is chair of the Naples Area Board of REALTORS® (NABOR®) RPAC Committee, is no braggart but he proudly acknowledges “it is a huge accomplishment.” Of the 1.5 million REALTORS® in the United States, only 1,605 are in the RPAC Hall of Fame, Angelopoulos Urbinati notes. When Brown was first inducted in 2008, there were only nine or 10 others from across the country at the ceremony in Washington, D.C. This year, 760 were inducted during the RPAC Hall of Fame Induction Ceremony held May 3 at Gaylord National Resort & Convention Center in Forest Heights, Maryland. The event took place during the National Association of REALTORS® (NAR) Legislative Meetings week that included Capitol Hill visits, special issues forums, committee meetings, and the industry Trade Expo. RPAC membership has increased dramatically during the past few years, despite challenges presented by the pandemic, says Brown, who is happy to report that NABOR® has “a litany of people getting close. Hopefully, we’ll have a number of directors in the RPAC Hall of Fame” soon.

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Joining RPAC

A lifetime investment of $25,000 is the threshold for being inducted into the RPAC Hall of Fame; this is not a one-shot contribution but a cumulative total through years of annual donations. “We do what we do because of the results,” Brown says. He goes on to explain: “As a general rule, legislators are not REALTORS®—they don’t understand the process or how their actions

will impact the industry down the road. Our advocates sit with them and explain why [a proposed law] could be catastrophic to the real estate industry.” Brown, RPAC Major Investor since 2004, says supporting the national organization “is important because of everything going down right now. The business is always changing, and we want to make sure it changes in the right direction.”

RPAC MAJOR INVESTOR GIVING LEVELS Major Investor, four levels:

STERLING R: $1,000

CRYSTAL R: $2,500—$1,500 to sustain or $1,000 plus President’s Circle $2,000

GOLDEN R: $5,000—$2,000 to sustain or $1,000 plus President’s Circle $2,000

PLATINUM R: $10,000—$5,000 to sustain plus President’s Circle $2,000

President’s Circle: A donation of $2,000 contributed directly to REALTOR®-friendly candidates (NAR-endorsed) at the federal level. Any Major Investor can become a member of the President’s Circle. Benefits vary per level. Learn more at REALTOR® Party: realtorparty.realtor.

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WHAT IS RPAC?

The REALTORS® Political Action Committee (RPAC) was established in 1969 to support and protect the interests of the real estate industry nationwide by promoting pro-REALTOR® political candidates and lobbying for or against proposed legislation, policies, or regulations. Its activities are funded by voluntary fees paid by REALTORS®. According to NAR, “The REALTORS® Political Action Committee and other political fundraising are the keys to protecting and promoting the real estate industry.” How do you know if a colleague or NABOR® member is an RPAC supporter? Have questions about the program? Check on NABOR.com under Advocacy tab.

funding, programs to help veterans and essential workers become homeowners, the business rent tax, and many others. Angelopoulos Urbinati says, as a member of the President’s Circle, she’s especially motivated by going to legislative meetings in Tallahassee each spring during the legislative session. “The biggest thing is, I have a seat at the table. I’m engaged in this group,” she says, adding that it’s worth her time and money because when it comes to homeownership, “we always call it the American dream.” She recently attended a President’s Circle

conference in the Bahamas, along with five other NABOR® members, that included about 1,400 participants and interesting speakers. “We got to meet people from all over the United States that are all dealing with the same issues we are having. You also learn how things are done differently in North Carolina versus Florida, for instance,” she says. “We always have both parties represented when talking about the issues.” She says her involvement in RPAC exemplifies that when “you are a leader in a profession, you’re not only a professional but an advocate for the industry.”

You don’t have to break the bank to get involved. NABOR® members can support RPAC by giving at a variety of levels, from $30 to Major Investor, beginning at Sterling R with an annual investment of $1,000. Of NABOR®’s 7,000 members, about half— 48.37 percent—are investing in RPAC but the RPAC Committee is trying to encourage a higher participation rate in 2022.

Inside the Issues

Angelopoulos Urbinati has been a REALTOR® in Naples since 1990 but it took her several years to fully appreciate RPAC’s role in local, state, and national issues impacting the real estate industry. By 1999, “I started understanding what RPAC was all about—homeownership and private property rights,” she says. “RPAC is bipartisan. It’s not Democrats or Republicans. It’s not red or blue. We fondly refer to it as the Purple Party.” On a national level, RPAC tracks issues cropping up in communities that could eventually land in Collier County, such as vacation rentals. Both Brown and Angelopoulos Urbinati appreciate what it does on the state level, too: Keeping an eye on water quality issues that impact home sales, condo reforms, federal affordable housing N A P L E S A R E A B O A R D O F R E A LT O R S ®

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SUGGESTIONS FOR CONDO BUYERS From walk-throughs and inspections to association financials and special assessments, dot all the i’s in condo transactions BY WILLIAM G. MORRIS, ATTORNEY AND NABOR® LEGAL RESOURCES COMMITTEE MEMBER

Is the seller required to disclose a pending assessment?

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ondominium buyers have more to investigate than buyers of single-family homes, but the process is difficult. This article offers thoughts on making buyer investigation better than routine. A buyer should personally tour the unit before making an offer. Pictures are great, but pictures just do not convey many things. The pre-closing walk-through is even more important: It is the last opportunity for inspection— the last chance to make sure all is in order. When a buyer doesn’t personally conduct the walk-through, the buyer will blame whoever does for something later found unsatisfactory. Why not retain a home inspector to conduct or accompany the buyer for the walkthrough? Even if satisfied with the walk-through, there is still much to inspect. The condition of the building and its amenities is important. Repairs often mean special assessments. The Condominium Act requires associations to carry full insurable value/replacement cost hazard insurance; the amount is to be based on an independent insurance appraisal every 36 months. Ask for the appraisal. When available, the appraisal tells the story of condition. Review the condominium financial statement, which the buyer is entitled to. The current annual budget is also important but not mandatory under the Act. Also important is the proposed annual budget: It is required to include fully funded reserves. Owners can vote to reserve less but must see what fully funded reserves require. Proposed budgets will show fully funded reserves and estimated remaining useful life of capital assets. Investigate who has access to association accounts and who monitors those accounts. Reserve accounts and funding reserves are important to lenders. Fannie Mae and Freddie Mac generally require budgets have 10 percent replacement reserves aside from

assessments for current operating expenses. The unexpected special assessment is perhaps the biggest post-closing complaint. Associations are not required to tell the buyer of possible or pending assessments. All the Act requires is an estoppel certificate from the association with disclosure of then-existing assessments. The NABOR® contract helps level the playing field on special assessments: If an assessment is “pending” on the contract’s Effective Date, it becomes the buyer’s responsibility. If not disclosed in writing prior to the buyer signing the final contract, the buyer can terminate unless the seller agrees to pay that portion of the assessment over 1 percent of purchase price. If the exact assessment amount is not known at closing and the seller has agreed to pay the portion above 1 percent, a “reasonable sum” is paid into escrow. Is the seller required to disclose a pending assessment? Is failure to disclose a fraud or a failure to disclose a material defect that would allow the buyer to unravel a sale or sue for damages? Many attorneys think so, but does a buyer want to sue the seller after closing? One way to push a seller into a firmer obligation is to ask the seller about pending special assessments. Who does that? Asking the seller about the property is how buyers started their quest to judgment in Johnson v. Davis. Buyers should also inquire about pending or threatened suits against the association. The Frequently Asked Questions and Answers Sheet included in the condominium documents only requires association disclosure of court cases where the association may face liability over $100,000. Buyers should read all documents they’re entitled to under the Act. That includes rental restrictions, pet

Q3 2022

6/16/22 3:04 PM

restrictions, parking, and other rules you may like—or hate. Remember: Rules can be changed. The ability to change the rules can be both a benefit and a curse. Asking questions often gets no response or an “I don’t know.” Associations do not have to answer questions and doing so may violate a duty of confidentiality to unit owners. Owners may not know. That means getting association

records may be the only way to really get answers. To do that, a buyer could ask the owner to get records. Another way is to get the owner to grant the buyer a limited power of attorney to access records. Reviewing minutes of director meetings is a good starting point for big items. How deep the buyer wants to dive into association records is up to the buyer, but only if the buyer has the

authority to do so from the seller. The scope of buyer inspection and seller cooperation should be addressed in the contract. Drafting that verbiage can be tricky, so it is a good idea to have the buyer’s attorney do the drafting. The information contained in this article is not intended as legal advice. For questions about specific circumstances, consult a qualified attorney. N A P L E S A R E A B O A R D O F R E A LT O R S ®

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6/21/22 9:45 AM

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Stung Issues surrounding loans for owner assessments and potential buyers when communities become non-warrantable BY DICK HOGAN

REALTORS® and their customers need to stay alert to signs that a community’s financial footing is on the rocks—and appearances can be deceiving. That’s the lesson to be learned from a highprofile lawsuit against a property management company that has agents, homeowners, and condo association officers thinking nervously about an arcane term: non-warrantable. A community is considered non-warrantable if it doesn’t meet the standards set by governmentbacked mortgage guarantors Fannie Mae or Freddie Mac. That doesn’t mean you can’t get a loan from a private lender for a home or condo unit in a non-warranted community—but it could become a costly uphill climb. The lawsuit—filed in Collier County Circuit Court by 35 homeowner and condo associations in Collier and Lee counties—alleges that Naples-based American Property Management Services falsified financial documents, allegedly embezzled a total of at least $8 million, and left them close to penniless. “People paid their dues—they did everything they thought they were supposed to do—and they never thought they were going to have a management company that was going to take the money and run,” says REALTOR® Liz Koplitz of Local Real Estate LLC, who is a member of the Naples Area Board of REALTORS® Professional 48

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Standards and MLS Committees. So far, the issue hasn’t affected the spiraling prices or the quick pace of sales in the red-hot Naples real estate market, Koplitz notes. In March, for instance, a home in Bridgewater Bay “was listed for $495,000 and it was sold at $555,000” even though the seller disclosed that the community was part of the lawsuit against the property manager. American Property Management has been accused of completely draining the associations’ reserves and locking them out of access to their bank accounts—the majority are condo communities. This is more than a cautionary tale, Koplitz says. Associations need to shoulder their share of the blame: “They delegated all the responsibility of the financials to these management companies with no oversight. Nobody from the homeowners’ association looked at what they were doing with the money. It’s critical to keep a close eye on the books.” The results could be costly for associations that need to borrow money to cover monthly and annual operations and fiduciary obligations, says Steven Fishman, president of Buckeye Lending Solutions Inc. Taking out loans, however, won’t make the communities warrantable, he says. “This will not satisfy Fannie Mae and Freddie Mac,” which require a 10 percent reserve of the association’s working budget.

RED FLAGS

Here are some of the characteristics that can render a project non-warrantable by Fannie Mae:

▷ ▷ ▷ ▷ ▷ ▷ ▷

Timeshare, fractional, or segmented ownership Seller is offering sales or financing in excess of Fannie Mae’s eligibility policies for individual mortgage loans Permitting a priority lien for unpaid common expenses in excess of Fannie Mae’s priority lien limitations Projects that are managed as a hotel or motel, even though the units are individually owned Projects with property that is not real estate, such as houseboat properties Owned or operated as a continuing-care facility Total space used for non-residential or commercial purposes may not exceed 35 percent

Q3 2022

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7/14/22 3:32 PM

“The condos will all become nonwarrantable and will require non-conventional loan options,” notes Fishman, “which exist at a bit of a premium rate.” Sam Kassar, owner of Brightway Insurance in Naples, says financing can be costly for residents of communities that don’t have access to conventional loans. Recently, “we’ve seen a couple of communities now trying to assess the residents a certain amount of money for new roofs” as a result of damage from 2017’s

Hurricane Irma. “We’ve also seen that insurance companies, some of them, are denying those claims for new roofs because the statute of limitations for filing claims due to Hurricane Irma was three years, which expired in September of last year,” Kassar says. As a result, Kassar says, one community is trying to assess owners $30,000 per unit to repair the damage. The signs that a community’s being mismanaged are best detected on site. For example, Koplitz says, in a well-managed

community such as Talis Park, “you’ve got an army of gardeners, and everything is perfect. Then you walk through some of these other communities that are on a similar level with them, and they look tired. You have to ask, ‘Why?’” Part of the problem is that foot traffic subsided during the past two years. “We were in pandemic mode. None of us were going anywhere. Most of us were selling virtually. Nobody was walking properties,” she observes. “We were all caught off guard.” N A P L E S A R E A B O A R D O F R E A LT O R S ®

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7/14/22 3:32 PM

Henderson Franklin Has Been Making Our Clients’ Real Estate Visions a Reality for Nearly 100 Years.

Sharon M. Zuccaro

Jeff E. Wright

Real Estate, Title Insurance and Business & Tax Planning

Member, NABOR Legal Resources Committee Chair, Land Use, Zoning and Environmental Department Florida Bar Board Certified in City, County and Local Government Law

Real estate and land development are vital to the continued growth of Southwest Florida. Henderson Franklin attorneys Sharon Zuccaro and Jeff Wright assist their clients in all aspects of real estate, land use and environmental law. Whether you are negotiating the terms of a residential transaction or commercial lease, trying to make sense of zoning regulations, or managing the legal needs of thriving communities and commercial developments, let our experience work to help you reach your goals – just as we’ve done since 1924.

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6/8/22 9:54 AM

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NEW RENTAL RULES How NABOR® members can help customers follow Collier County’s new short-term vacation rental ordinance BY BETH LUBERECKI

ollier County Ordinance No. 202145 went into effect at the beginning of 2022, requiring property owners in unincorporated Collier County to register short-term vacation rentals. Properties rented more than three times per calendar year for periods of less than 30 days or for one calendar month are considered short-term rentals. When working with customers, Naples Area Board of REALTORS® (NABOR®) members must be completely clear about their rental goals. Just renting a property seasonally for several months at a time to a snowbird, for example, would not require compliance with the ordinance. Properties in the City of Naples, City of Marco Island, and Everglades City are also exempt from the ordinance. REALTORS® “need to understand the customer’s intentions,” says Danielle Brazil Hudson, vice president of public policy at NABOR®. “There has to be an understanding of the ordinance plus what is required where agents are selling.”

First, NABOR® members can help customers determine whether a property they’re considering is in unincorporated Collier County. Once a purchasing decision has been made, they can direct customers to the Florida Department of Business and Professional Regulation (DBPR) to obtain their license for a short-term vacation rental. Property owners must also submit a ShortTerm Vacation Rental Registration Application to Collier County, which includes information for a designated responsible party available 24/7 to address things like county ordinance violations or law enforcement action. There are three types of licenses: single, group (for multiple units in a building or complex), or collective, issued for up to 75 houses or units in different locations that are represented by the same licensed agent (such as a property manager or vocational rental company). Property managers can list a home-watching service as

the designated responsible party. A property can’t be rented until this process is complete. Once a property owner obtains their Collier County Rental Registration Number, that number must appear in all advertising and marketing of the property or the owner runs the risk of incurring fines. Owners of short-term rentals must convey certain pieces of key information to renters. “They need to let guests know that they need to follow the Collier County ordinances,” says PJ Smith, broker/owner of Naples Golf to Gulf Real Estate and treasurer of NABOR®. “Noise, parking, and garbage are the big ones.” Hudson recommends including information about the ordinances in the property’s rental binder. For questions about the short-term vacation rental ordinance, reach out to Collier County at 239-252-2400 or STVR@colliercountyfl.gov. N A P L E S A R E A B O A R D O F R E A LT O R S ®

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6/16/22 3:06 PM

Successfully Advocating For

Florida’s Real Estate Market

2021 ADVOCACY VICTORIES

Curbing

$1.23

COVID-19

Billion

Liability

Equitable

$1.84

Property Tax

$209

$500k

For Environmental Projects

For Affordable Housing

Rising Property Insurance Costs

Billion

Cut to the Business Rent Tax

Relief

Protections For Realtors

Million

For Affordable Housing Programs

Appraiser Regulations

To Combat Unlicensed Real Estate Activity

When REALTORS® Vote REALTORS® Win! #FloridaRealtorsWins @FloridaRealtors

Florida Realtors

Naples Area Board of Realtors Q3

Articles inside

Calculating Value

Message from the President

Priced Out

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