The Process, Step-by-Step
Some important tips to keep in mind to streamline the process:
- Keep written records of everything. For the sake of clarity, it will be extremely useful to transcribe all verbal agreements including counter-offers and addendums and to convert them into written agreements to be signed by both parties. We will assist you in drafting all the paperwork for your purchase and make sure that you have copies of everything while keeping you updated every step of the way.
- Stick to the schedule. Now that your offer has been accepted, we create what is called a “critical dates” schedule which ensures we are adhering to all the timelines and deadlines outlined in the purchase contract and that all requirements are met while protecting you.
The Closing Agent
Either a title company or an attorney will be selected as a closing agent. The closing agent will hold the deposit in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that anything that could arise in the title search, including liens or permits that were opened by the owner are cleared up prior to closing. Some properties are subject to restrictions which limit various activities such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property.
How to Hold Title
You may wish to consult an attorney or tax advisor on the best way to take the title of your new home or investment property. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the titleholder. Also, if you are purchasing a property to live in as your primary residence, it’s in your best interest in Florida to get homesteaded which caps the amount your taxes can be raised and also has additional tax benefits and exemptions so you know you are not paying more than you need to on your annual tax bill.
Inspections
Once your offer is accepted by the seller, you will need to have a licensed property inspector inspect the property within the time frame that was agreed upon in the effective contract to purchase. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). If you are purchasing a commercial property, then you will need to have an environmental audit done on the site for the lending institution. We can recommend several different inspectors and also have a database of specialists, should you require a more thorough inspection for additional areas of concern.
Depending on the outcome of these inspections, one of two things may happen:
1. The Seller can opt to have any issues that come up in the inspection fixed or corrected, and the contingencies will be removed.
2. Alternatively, as we often recommend – is to ask for a credit at closing to cure any problems or issues with contractors or specialists that we have previously worked with to ensure any items in the inspection report are solved.
Appraisal and Lending
It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income. When you are within two weeks of closing, double-check with your lender to be sure the loan will go through smoothly and most importantly that you are prepared and are ready to close on the date in the purchase contract.
Association Approval
If the property that you are purchasing is conditional upon an association approval, we will request and provide the rules, regulations, and other important documents from the seller as soon as we have an effective contract to purchase. Make sure that the application documents and processing fees are submitted to the appropriate person at the association by the required time. Fill out all of the information completely and legibly so there is no delay in processing the application. If you are required to meet with the association for your approval, make an appointment as soon as possible for the interview. Your closing agent will request that the original copy of this approval letter be brought to the closing, so that it can be recorded with the deed in the county public records.
Property Insurance
If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. We can provide trusted insurance agents and always advise our clients to obtain quotes from at least 3 providers.
Some things to take into consideration when requesting quotes from insurance providers:
- Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
- Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age or long-term customers may also be offered discounts.