Buying

Here we will outline the home buying process as only we can do. Each section will give you some specifics and suggestions to make the process a bit easier.

Here we will outline the home buying process as only we can do. Each section will give you some specifics and suggestions to make the process a bit easier.

Now, you’ve been told over and over that for most folks buying a home is the single largest financial transaction in their lives. This is true but it does not have to be stressful if you prepare correctly.

This is where I come in. Chances are that I will buy and sell more homes in a single month than you will in your lifetime, so use my experience to your advantage.

Home Buying is a pretty straight forward process. In a nutshell, here are the players:

Buyer (You): makes sure you know what the heck you want.

Seller (Them): will sell you anything.

Real Estate Agent (Me): makes sure you don’t waste your time looking at all sorts of useless stuff.

Lender: makes sure you can afford the home.

Home Inspector: makes sure that the home is standing.

Closing Agent: makes sure that you can legally buy the home.

Insurance Agent: makes sure that you get a new home if this home goes boom.

And

IRS: makes sure that they get their piece of “your” pie.

Don’t want to look at the pages; just want a step by step of the process?

Give us a call.

 

The home buying process…

Financing

Standards have tightened but there are many programs available to home buyers.

But, unless you’re intimately involved with a lender, chances are you have no idea what you can or cannot afford. So forget mortgage calculators, indexes, rates and online financial tools; contact a lender first and get pre-qualified.

I recommend contacting several lenders. They can be in the form of your bank, a mortgage broker, or even online lenders and see what they have to offer.

Get these quotes in writing, not just “yeah you can buy a million dollar home, we’ll work it out later”.

We got the dough, now what?

Contracts & Offers

OK, here’s where it starts to get interesting. We find a place we like that is not on a major highway and we make an offer to purchase the home to begin the process. Then it goes something like this:

Our offer, their counteroffer, our counter to their counteroffer, their counter to our counter to their counter to… ZZZZZZZZZ… By now I have pretty much had it, I’m a “Hey here’s our deal, let’s get this signed and over with” type of guy, but if you are into “negotiating”, I’ll be happy to play along.

Contract terms. To me this is the most important factor in presenting an offer. It’s what really that makes our deal strong. I’ll assist you in writing a solid, fair offer. One that you will feel comfortable with and the seller will take seriously.

We got the home! Now what?

Inspections

All homes, whether new or from the times of the Tequesta Indians, should be professionally inspected. This is like giving the home a physical exam, a check-up of sorts. Items covered during a complete home inspections are: roof, structural, mechanical, electrical, plumbing, appliances, doors, and windows.

Termite and pest reports must also be completed, as lenders are really afraid of the little buggers.

There are also shorter forms of inspections, the most common being: a 4point (roof, electrical, plumbing, termites). This is really all that the lenders and insurance companies require.

In Miami-Dade, you will also want to include a “wind mitigation” report, as this will help you get credits that can save you dough on your wind policy.

If applicable, don’t forget the septic guys. It’s a messy job, but it could save you a tons of cash.

Inspectors now must be licensed in the state of Florida but it’s “buyer beware”. Inspectors who are members of the following organizations are a good starting point: ASHI (American Society of Home Inspections) & FABI (Florida Association of Building Inspectors).

NEVER, EVER, SEND YOUR COMPLETE INSPECTION REPORT TO ANYONE!

The home has been inspected and it’s still standing. Now what?

Insurance

This is really easy: if you’re getting a mortgage, you’re going to need insurance. No ifs, ands, or buts about it. The lender will not close without an insurance policy in place (it’s a racket).

If you are paying cash, no need for insurance (see, told you it was a racket).

Windstorm insurance is required as part of all residential policies, so get a wind mitigation report when doing home inspection.

As mentioned in the inspections section, agents will request a copy of 4 point (if home is older than 40 years). If you have a wind mitigation report, make sure to present it when you ask for your quote (it will save you dough).

AND

NEVER, EVER, SEND YOUR COMPLETE INSPECTION REPORT TO ANYONE!

We’re insured. What’s next?

Closing Agents

This is the boring part of real estate, but it involves attorneys, so we’ll give them their due. We have to be nice to these guys or they will “litigate” us.

Closing agents ensure that the transaction closes smoothly, they act as facilitators.

They usually represent the lender or buyer in a transaction and they can prepare basic seller docs. They cannot represent the seller… that’s a no-no.

They prepare documents related to the purchase and sale of real property; such as the title insurance policies that guarantee you clear marketable title. In some cases, they hold escrow and good faith deposits.

In short they make sure that all of our ducks are in a row, that our Ts are crossed and our Is are dotted.

AND

NEVER, EVER, SEND YOUR COMPLETE INSPECTION REPORT TO ANYONE!

Now what?

Day of Closing

Big day has arrived and you have no clue what to expect. But put your mind at ease, as it will seem like complete chaos and at the end of the day all you will have to show for it is a set of keys, a ton of documents, and… oh yeah a brand new home!

First and foremost (very important), by contract you are supposed to close by a certain date. But this being Miami, everything is subject to change without prior notice, so don’t freak out if the closing date does change. Prepare accordingly prior to closing.

What does that mean? Don’t plan a moving truck on a set date, give yourself some flexibility… trust me on this one.

Typical closing date scenario:

Once we get the clear to close from the lender (usually a couple of days before set closing date), the actual date/time of closing will be set. Buyer will do a final walkthrough. This is done to make sure the stuff that was on the contract is still there. This is NOT another inspection, please remember that.

The closing agent will prepare a HUD 1, which will serve as a reconciliation of all credits/debits used in the transaction.

Both seller and buyer (and agents) may review the HUD to see if any changes might be made (missing credits/debits). Then it’s sent to the lender for approval. This MUST be approved by the lender.

Buyer will meet with closing agent and review/execute a boat-load of documents (which will never be looked at again) that the lender has prepared to protect “their” interest (you are just along for the ride, lenders NEVER lose).

Most important documents that you will sign are:

The “Note”, a promise to pay.

The “Mortgage”, what you promise to have taken away if you do not pay.

The “HUD 1”, a settlement statement of where all the dough went to.

Once you have executed all of these documents, the seller’s side will come in (note the seller DOES NOT have to be present) and present their executed documents, the Bill of Sale and Warranty Deed being the most relevant.

They will also execute the HUD 1 and the closing agent will notarize it.

At this point the transaction is complete and there will be some nervous silence.

Right about here is where the real estate agent will attempt to add some levity to the transaction by asking “Hey, when do I get paid?”. Or something to that effect!

BTW, same steps take place for a “dry closing” which just means that the lender has not funded the transaction and both sides have agreed “that’s cool”.

Happens all the time.

Hey Jav, what about appraisals, I think you overlooked this?

I will not comment…