About: Buyers / The Buying Process

Deciding what to buy

DECIDING WHAT PROPERTY TO BUY…

  • Even this seemingly simple choice has several things to consider. (Price range will limit some…)

Do you see yourself gardening in the yard? or on a balcony looking out at the city or the ocean?

Do you want a single family house?

  • Will this be a full time home or a 2nd/vacation home?
  • Who will maintain it (yard/pool) year round if it’s a 2nd home?
  • Is this strictly an investment?  Or a rental for now, and a home for you later?

Do you want a Condominium or Townhome?

  • Do you have pets? (many prohibit pets)
  • Is this strictly an investment? Or a rental for now, and a home for you later?
  • If a 2nd home, did you plan on renting it out when you were not there? (Most prohibit short term rental)
  • Are you all right with a shared pool & parking?

General Questions to think about…

  • Are you willing to update or remodel a property? …or do you want “move-in ready”? (Even “move-in ready” may need painting or appliances or repairs)
  • Do you want to live close to everything? a “Walk to” location? or in a more residential area with a drive to shopping and nightlife?

Will you pay cash or get a Mortgage? (see FINANCING)

How soon do you want to start looking? Do you have a “Move By” date in mind?

Before you shop

BEFORE YOU LOOK AT HOMES

Most Agents will generally allow one day of looking at houses to get to know you if there hasn’t been much time or contact prior to that ‘shopping’ trip, but before going much farther will require one of these from you:

If you are a CASH buyer, the only thing that will be necessary to have on hand is “Proof of Funds”.

This is normally a Bank Statement with your name showing at least the amount needed to cover the contract price (this can be gotten by you on line &we will black out the account numbers for security). This MUST BE included with any Cash Offer written and presented.

If you will be FINANCING the property, we will need to include a “Pre-Approval Letter” from a Lender.

(Not a ‘Pre-Qualification’ Letter) The mortgage process will be MUCH easier if you work with
a local lender here in South Florida. Many Northern Lenders will say they can lend in Florida but it seldom works out well. There are requirements & conditions here that local lenders handle as normal, but may cause delayed or cancelled closings from out of state lenders. It should state the purchase price, terms, and interest rates approved for your mortgage.

Besides the financial paperwork to guide us, we also need to make sure that we understand your plans & needs for whatever property you are looking for. It is heartbreaking to find “the perfect condo that you love and is in your price range” only to find that you never mentioned that you have a dog (or 2) and THAT building doesn’t allow pets… OR that the building REQUIRES 25% down to approve a purchase and you have been approved for 20%…

Shopping

SHOPPING TIME
 
So now it’s time to start looking at properties…

  • Your Agent will try and show you as many properties as he can in the given time but… Remember, “Everything looks good in the pictures…”
  • Unless we already know the property, WE may be seeing it for the 1st time too. Please don’t blame us if we get to a home and it’s somewhat ‘less than expected’.
  • If you’ve crossed one off your list prior and we say “You should really see that one…” TRUST us and see it. It may be the one that’s actually BETTER than the pictures.

Some “Available” properties are very hard to show –

  • Tenants may refuse a showing at the time we want it… (Or just to be difficult).
  • Owners may have visitors staying and say ‘NO’.
  • Listing Agents sometimes just don’t show up or return calls…

There is a limit to the number of properties most people can see in one day.

  • Bring a camera and a notebook! After a certain point they all look the same and it just gets confusing and frustrating.
  •  If there is a lengthy list of properties to see, we will suggest a fly through tour the 1st day, (Quick walk through showings to eliminate the definite NO’s), and then longer
  • spend some time” 2nd showings on the “keepers“ later in the day or the next day.  Listen to our advice during showings (we’ve seen it all, AND what they’re trying to hide)
  • Don’t let things like awful color choices, bad appliances, not enough landscaping… turn you away from a house with ‘good bones’. Each one of those things can be fixed with a phone call and a check. Try to picture the house empty of their décor & clutter. Picture what YOU would do with those rooms, that layout, that yard… What color would YOU paint that house?
  • DON’T ignore that it’s a ‘problem house’ if we warn you that it is, just because “it’s cheaper than the others”. You’ll regret it later!

We don’t want you to buy the wrong thing!  After you buy, we’ll be neighbors. We will probably see each other at restaurants, shows, grocery stores… We’d rather have you wait for the right home, or NOT BUY at all, than to have you end up in something you will not be happy with and be to blame for that. We need HAPPY CUSTOMERS telling their friends to call us!

From Contract to Closing

FROM CONTRACT TO CLOSING

CONTRACT – So now that we’ve found the home you want…

In Florida, the standard Contract form most widely used is the AS-IS Contract (FAR-BAR ASIS-2). Our contracts are created by the “Florida Association of Realtors & the Florida BAR Association” and cannot by law be altered or changed by us in any way. We will write the Offer filling in the terms & conditions you would like, attaching any appropriate Addendums necessary for the property like a Condominium Rider. Offer Price, amount of Deposit (escrow amount), an expected Closing Date, what is and what’s not included in the sale (most appliances & fittings are pre-printed), whether you are Cash, or Financing and the terms. This Contract/offer plus the Proof of Funds (if cash) or Pre-Approval (if financing) is then delivered to the Listing Agent to take to the Seller. If it is accepted, the Seller signs/dates and that is then the “Effective Date”. If it is counter-offered, the date the last person signs the last agreed upon term becomes the Effective Date. That’s when the clock starts ticking for all terms and dates in the contract. Usually the Deposit or “Escrow” either accompanied the offer or it is now due “Upon Acceptance”. Inspections are usually within 5-7 days “from acceptance”.

INSPECTIONS- Always Get a Home Inspection…

“AS IS” means you have the right to do a Home Inspection for your own knowledge & information. It is NOT a tool to make demands from the Seller for repairs, but will let YOU know what, if anything, is not working correctly, what will likely need replacement in the near future and what is good to go for long term. There are a few instances where requests can be made, but those are the exceptions, not the rule. You have the right during the Inspection Period “at Buyers Sole Discretion” to cancel the contract and receive your deposit back – No questions asked.  A Home Inspection on a 1600 sq. ft. 3 bedroom/2 bath home will run approximately $350-500.00 (varies by sq. ft.) and a Condo Inspection can be $200-300 (again, depending on size). It is money well spent.

FINANCING APPRAISAL – “A SNAPSHOT OF A HOMES VALUE”…

Appraisals are always ‘interesting’ here in South Florida. To begin with, an Appraisal is a mathematical equation using 3 or more homes that are considered ‘Comparable’ properties (similar size, location, & amenities) to the property that is under contract. Appraisers will not compare waterfront to ‘non-waterfront’ or pool homes to ‘non-pool’ homes unless there is no other choice. They presently will only use properties that have Sold within the last 3 months (but will stretch that to 6 months if there aren’t any). They will adjust those 3 Sold prices up or down to match the condition and amenities of the Under Contract house, average them, and that number is what the Under Contract property will “appraise at”.  Unfortunately there is also a lot of OPINION of the individual Appraiser doing the report that makes them vary widely and sometimes very problematic. Example: Recently, a home with a contract price of $439,000 appraised the 1st time at $407,000 which was unacceptable to the bank involved, who then ordered a 2nd appraisal. That one, 6 days later, came in at $500,000. Same house, 6 days apart, 2 different Appraisers $93,000 apart! Very few agents attend the Appraisal appointment. We do, armed with a list of the ‘upgraded’ points of the property and the Comparable Sales info FOR him.  Most Appraisers welcome that information and it usually makes the report & value more accurate.

SURVEY – Knowing where you stand…

I always recommend getting a survey of a single family home or income property. It is wise to know where the real property lines are, and not rely on where “the last guy” put the fence. I have seen fences turn out to be 3-4 FEET off of the actual property line, and in one case, the survey determined that an entire section of the house was over a property line and was illegal. A survey is $400-450 well spent.

CLOSING – THE FINISH LINE!

Once a “Clear to Close” is given by a Lender/Underwriter, (or any other Contingencies have been met by Cash Buyers) the Title Company will prepare Final documents for Closing.

We will do a “Final Walk Through” with you (or FOR you if you are not present) just before to the Closing to confirm that the property is empty and clean -“broom swept” is the contract term- and that everything is there that should be, regarding appliances, chandeliers…etc. The property should be in the same condition it was when the contract was made, no changes.

The Closing Package will show that figures from the Seller, the Buyer, the Government, the Bank etc. all agree and that all money is accounted and exchanged as agreed. Title Insurance guarantees that the Seller holds a clean clear Title to the property and is now turning that clean Title over to the new owner in full. If Buyers or Sellers are not able to be present, their documents can be done and sent overnight as what’s called a “mail-away”. The most important part of a closing is Funding. If the Lender or Buyer doesn’t wire the money on time, the Closing Agent cannot ‘fund’ or pay out, so keys & possession cannot be given and everyone must just wait until it shows up. If everything is done correctly and on time, Closing can seem a little anti-climactic with just a few hundred signatures and the handing over of keys.