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Insurance issues that may affect the sale of your St Petersburg home

Citizens requirements for 4 point inspection

New 4 point inspection requirements


New rules from Citizens Insurance may affect the sale (or purchase) of your St Petersburg home. Starting September 1, 2012, Citizens will require a 4 point inspection for any new or renewal homeowner’s insurance policy on a home 30 or more years old – i.e., built before 1982.  Many of the waterfront homes in Venetian Isles, Broadwater, Yacht Club Estates and many other areas were built in the 1970s, so will be affected.

The four “points” of the inspection are plumbing, electrical, HVAC (heating and air conditioning) and the roof.  The inspection must be completed by an appropriate Florida licensed inspector and photos must accompany the report.  It appears that a new 4 point inspection report will need to be done with each annual renewal. In addition to a certification that all four systems are in good working order, there are some other requirements to note:  all roofs will need to have at least 3 more years of expected life; no polybutylene pipes; and if the house has single strand (aluminum branch) wiring, separate documentation of remediation must be provided and certified by a licensed electrician. Three remediation methods are allowed: 1) entire home rewired with copper; 2) connections repaired via COPALUM crimp; or 3) connections repaired via AlumiConn.

The aluminum wiring situation is similar to the knob-and-tubing situation in older homes. Most contracts will state that all systems need to be operating properly but that the seller/owner will not have to upgrade to new codes unless an item needs repair. However, if the contract is subject to financing, the lender is going to require insurance. If the buyer can’t get insurance for the home, the loan won’t be approved, so the financing clause will allow him to walk away. So, it’s better to address this issue before you put the home on the market.

Call or email The Simms Team for a copy of the new Citizens 4-point inspection report or for additional information on these inspections.



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Is an “as is” offer good for a St Petersburg home seller?

 Often, when a Seller receives an “as is” offer on his home in St Petersburg, his first thought is, “Great. That means I won’t have to make any repairs.”  Well, not necessarily.

In most cases the contract will provide for the buyer to have a home inspection done. In the typical Florida FAR/BAR contract, there is a clause that “If Buyer determines, in Buyer’s sole discretion, that this property is not acceptable to Buyer, Buyer may terminate this contract”. So, it’s correct that the Seller isn’t obligated to make any repairs, but the buyer also isn’t obligated to buy the property. Rather than just walking away, (though that happens sometimes, too) the Buyer may point out things that he’s not satisfied with and offer to go ahead with the purchase if the Seller fixes certain things, or if the Seller reduces the price or gives a credit for certain repairs. This often leads to a second round of negotiating. In effect, then, with an “as is” contract, the buyer is getting a 10 day “free look” at the property, to decide if he really does want to buy this house for the price already agreed upon.

In addition to buyer requests, other parties may get involved in repair issues. If the purchase is subject to a loan, the underwriter – who often doesn’t get involved until a day or two before closing – may require certain repairs to be done before closing, even if the buyer and seller have agreed that those repairs don’t need to be done. 

The insurance company may also get involved. On older homes, the insurance company will require a “four point inspection”. The insurer may object to the type of wiring in a house, or the estimated remaining life of the roof (even though the roof doesn’t leak). If the purchase is subject to a loan, the lender will require insurance on the home. If the insurer won’t insure without the repairs, the lender won’t loan the money, and the closing won’t happen.

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