Many people in Europe assume that the process of buying property in the United States is complicated and unclear. However, it is, in fact, quite obvious and straightforward, if given the right time to understand it. In comparison with some European countries, like the UK, the process of buying a house in the United States is more transparent and takes less time.
In addition to that, gazumping can’t happen in Florida, unlike some European countries. The seller can’t accept offers from other buyers after your offer is accepted, even if it’s for a higher price. Also, the money is put down directly, which guarantees you that the deal will be closed, and the sale will proceed unless some diligent matter breaks the contract. On the opposite, in Britain, buyers can never be sure that they are property owners until they have the keys in hand and it’s move-in day.
To help you understand more about the process of buying a property in Florida, we offer you a seven steps guide to demonstrate what happens at each stage from finding the right house to closing the deal.
1- Contact a Realtor in Florida
It is essential to hire a realtor before buying a house. Other than the purchase itself, this is the most crucial part of the process of purchasing a home that will determine the rest of it. A realtor will help you understand the local real estate market, and he will smoothen the entire process of buying a house. First, realtors know what to look for when viewing different properties. They also know about writing contracts and securing financing. Overall, it will cost you nothing, as a buyer, to consult with someone who will help you through the entire process.
2- Find the Right House
Start looking for the right house. The costs usually increase, and the price you could buy for today won’t necessarily be enough tomorrow. The realtors can help with that, thanks to their access to the MLS (Multiple Listings Service). They can also help you find a house with the criteria and the facilities that you’re looking for.
Additionally, online searching is another tool you could use to find the right listing. The more time you spend searching, the more information you have about properties, prices, and what fits your budget. However, when you carry out your online search, be ready to receive feedback from your realtor about the neighborhood, streets, and the area in general. The knowledge they acquired through their career allows them to understand if the property is right for you, whether it’s overpriced or if you have been misinformed. Use your realtor’s expertise to pick the right house for you and to make sure that your needs will be met.
When you finally find a selection of listings that suit you, it is time to go and view them personally. In Florida, you have the right to go check out the properties for yourself. You can attend open houses, or your realtor can schedule appointments for you. If you can’t make the trip to Florida, then your realtor should be trust-worthy and capable of getting the job done for you.
Step 3 – Get your Mortgage Pre-approved
If you are paying cash, this stage is irrelevant, move-on to the next step!
If you don’t have cash in hand, it is important to figure out your financing before finding a house. You need to get your mortgage pre-approved before hunting for a property. If you see something you want, and you are still not approved for a mortgage, you might lose the property as you won’t be the seller’s first choice. Also, it is essential to know what you can afford and what fits in your budget. Please note: prequalified is not the same thing as pre-approved.
There is a difference between being prequalified for a mortgage and getting approved. The former means that the lender received details and information about your income and financial commitments and decided that you can afford the mortgage. Being pre-approved means that they have checked your credit report, income, and debt ratio. Once they have analyzed your financial situation carefully, they send you a pre-approval letter. The letter helps you negotiate better with the seller, and increase your chance of getting the mortgage.
Step 4 – Make an offer.
When you find the right house for you, you need to go through the Seller’s Disclosure. It’s a contract where the seller reveals any flaws or issues in the house. Next, you make an offer. In Florida, you sign a contract that indicates the requirements of both parties of the sale. Realtors may discuss with the seller’s realtor the offer verbally to see the seller’s reaction and where they stand before getting any writing done. It is advisable to approach the seller with a written offer from the start. This way, your offer will be taken more seriously as the terms are already written down.
The seller may or may not accept your offer even if you are willing to pay the listed price. If he rejects, he isn’t obliged to explain why. Most buyers would receive a response within a few days, especially if their offer were too low. If that’s the case, the buyer can start negotiating with the seller by increasing the value right away, or he could wait for what happens next.
Step 5 –Offer Accepted By The Seller
Nothing is more exciting than receiving the news that your offer has been accepted. However, it is essential to keep in mind that the rest of the process may reveal some issues that need to be solved. Real estate deals can be tricky and may trigger some problems.
After they accept your offer, you have to put down a deposit, if you haven’t already. If the seller abides by the contract and did what he is required to do and you didn’t, you may lose the earnest money.
In most cases, you will have to put down the remaining deposit after a few days of executing the contract if that’s what was agreed on. Next, it’s time for your realtor to make use of his expertise in real estate and find any contingencies that might be in the contract. At this point, it is crucial to have an experienced realtor who puts the benefit of his client above all.
Step 6 – Signing Contracts
The contract should be written by your realtor and signed by you. It needs to include all the details and terms. Sometimes, the seller may ask you to put down a deposit as a sign of good faith. However, if you pull out your offer after it has been accepted without following the terms of the contract, you will lose the money.
In Florida, there are two types of real estate sales contracts. The standard contract indicates that the seller needs to fix any issues found in the property during the inspection. There is an allowance for up to 1.5% of the original price to account for these repairs. The second type is an “As-is” contract. It’s an alternative to the standard contract that says any issues found during the inspection should be revealed. However, the seller is not obliged to fix them. This is beneficial to the buyer as it gives him the possibility to withdraw the offer if the house is not for them. Unlike the standard contract, this one permits the buyer to be fully refunded, shall they be unhappy with the property.
The “As-is” contract includes :
- How much are you offering
- How much of the earnest money you are putting down ( pre-deposit) and how much is due at the end. Usually, it’s 10 percent of the full deposit.
- When should the seller get back at you
- What is the proposed closing date? In Florida, closings are usually within 30 to 45 days of the contract. This may differ due to various circumstances.
- How many days are allotted for due diligence? In the standard contract, it’s usually 15 days.
- The items included in the purchase ( like furniture)
- Finance contingency and the time frame. It protects the buyer from any potential legal issues in case the deal fails. The contract should include that the sale will be closed only if the mortgage is approved, in addition to the maximum interest and the mortgage terms that fit the buyer.
Step 7 – Closing the deal
You or your realtor should attend the closing meaning, next to a real estate attorney or a closing agent. In this meeting, all the paperwork is signed, and your realtor will make sure that everything is as it should be. As you go through the paperwork, your realtor or lawyer will make sure that everything is fine. The money will be transferred, and you will be handed out the keys. Congratulations, you own a house in the Sunshine State!