Buying a Home
Florida Home Buying Guide
Things to Know Before You Buy a Home in Jacksonville, FL
Home Buying Process
Buying a home can be overwhelming, exciting and stressful all at the same time! We’re here to help you through that process. It could take weeks or months to find your next home, but know that we’re here with you every step of the way!
Below you will find steps on buying a home.
Get a Mortgage
Speaking to a mortgage banker or broker is the first step. This way we will know what price range of home we should look at. Looking at homes in the wrong price range will be unproductive and disappointing. Also, in order to make an offer on a home you will need a pre-qualification letter which the mortgage lender will provide for you. Not having this can result in your offer not being taken seriously.
Find Your New Home
We will look at home to find the right fit for you. Usually I start out by emailing you listings from the Multiple Listing System. This way when a new property comes on the market you’ll be among the first to know about it. As we actually go and look at homes; I’ll be pointing out the pluses and minus’. Will the home have good resale potential? What schools will the kids go to if we buy here? If we want to add a pool will a pool fit? And is the lot facing the right direction for a pool? (Most people prefer a western or southern exposure for maximum sun). And what are the neighborhood restrictions?
Finding the right home is a balance between finding what you like and making a good financial decision for you and your family.
Contract & Escrow Deposit (Binder deposit)
Once we’ve decided upon a house, we have to negotiate with the Seller. The terms of the contract will include how much you’re willing to pay, when you want to close and occupy the house, and what items will stay with the home; like the washer & dryer or pool equipment. Contracts can be anywhere from 10 to 20 pages long. I’ll make sure you understand what you’re agreeing to before you sign the contract.
The escrow deposit amount depends on the price of the home and what the seller will agree to take, in order to “take it off the Market” so other buyers can’t bid on the house. Usually the binder deposit will be somewhere between $1,000 and $5,000. If the home is over $500,000 the binder deposit can be significantly more money. This deposit will be held in an escrow account of an attorney, title company or real estate company until the closing. This money will be credited to you towards the purchase price of the house at closing.
The Home Inspection
We have a couple of home inspectors that we recommend who will help determine the condition of the property. Does the roof need to be replaced? Is the heating and air conditioning system working properly? How old are the appliances and hot water heater? Does the house have a termites (often referred to as a WDO or wood destroying organism inspection).
Once we know these things we can negotiate with the seller to repair them or walk away from the house and look for a new one.
Home inspections generally range from $300 to $600 depending upon the square footage of the property and if additional reports are needed for the insurance company. WDO reports are around $150.
The Home Appraisal
The bank or mortgage company wants to make sure that the home you are buying is worth what you’re paying for it. A licensed appraiser is hired by the bank to gen an “opinion” of value. This is based on what other homes have sold for in the neighborhood. Your contract is contingent upon the house appraising for the contract sales price. If it doesn’t you can ask the seller to lower the price of the home, bring more money to the transaction in your down payment or walk away from the house. The cost of an appraisal is around $400 to $500.
Depending upon whether or not you’re buying a single family home or condo will determine what kind of insurance you will need. A single family home will need a homeowners policy and may need flood insurance. A condo will need just contents insurance much like a renters policy plus coverage for the parts of the home you own like the cabinets and appliances. The condo fee usually includes the insurance for the building and maybe a flood policy.
If the home is over 17 years old, your insurance company may want a 4.0 letter from the home inspector. This tells the insurance company whether or not the roof, HVAC system, electrical system and plumbing have been updated or not.
Another report the insurance company may want is a wind mitigation report. This tells the insurance company if the roof was put on in a way to reduce the amount of damage that would be suffered in a high wind storm or hurricane. If the roof does have this, you usually will get a reduced rate on your homeowners insurance.
Usually a few days before closing we will do a “walk through” of the home. This is to make sure repairs were made and to make sure the house is in the same condition as when we first looked at the home.
Then we attend the closing. You will have a chance to look over all the dollar figures that will be charged, with your lender. The closing will take place at a title company or attorney’s office. Closings usually take about an hour.
You will need to wire the monies required for closing to the account of the closing attorney or title company. Most companies will no longer accept a cashier’s check.
At this time you’ll get the keys and garage door openers too.
It’s Time to Move In!
RE/MAX Coastal Real Estate will be with you every step of the way. We’ll make sure you understand and are comfortable with how the process is moving along. There will be lots of texts, emails and phone calls.
And you are on your way to moving into your new home!
Short Sales & Foreclosures
Short Sales in Real Estate
If you decide to purchase a home that is a short sale, you should first have a lot of time to wait and be patient because the normal time from contract to closing can be 3 to 12 months.
Once you have an accepted contract on a short sale property, the bank/mortgage company will start determining if the seller qualifies for a short sale and what the value of the property is.
So for instance if the home is listed for $150,000 and you offered $145,000, the bank could still come back and say the property is worth $175,000. You then must decide if you still want to purchase the property or not. If you have been waiting for 2 months for the bank/mortgage company to approve the short sale and another offer comes in on the property, then the listing agent notifies us that there is another offer and we then go to highest and best. This means you have to decide if you want to stay at the price you originally offered or if you want to increase your bid. If the other offer is higher, then they usually go with that other offer and you are no longer under contract.
Once you have short sale lender approval, then you begin the mortgage process and the home inspections. Remember the seller has no money, so there will be no repairs made if the home inspection comes up with any issues. So be prepared to be able to cover the costs of those repairs or to walk away from the purchase of the property.
Foreclosure Real Estate Advice
When a person is no longer making their mortgage payments, then the mortgage company begins foreclosure proceedings. This means they file a “lis pendis” (pending legal action) with the clerk of the courts in that county. Sometimes the foreclosure happens in 6 months but it can take up to 2 or 3 years in some cases. Once the bank forecloses on the property then it can take 2 to 6 months for them to put it in the hands of a real estate agent.
A foreclosed property can be a very good deal. This means that it might sell for a lot less than a non-foreclosed house in the same neighborhood. However, there are several things to consider.
A foreclosed property can be in various states of repair. Some have lots of issues including roof leaks and others can be in fairly good shape. You will be buying the property in “as is” condition meaning that the seller, the bank will make no repairs. You will have the opportunity to have home inspections done so that you know what you’re getting into. Then you will need to decide if you are moving forward with the purchase or not. Often times we will need to get estimates of the repairs that are needed and I can help recommend contractors at that time. There are also loans available where you can finance the cost of those repairs into the mortgage you are getting on the property.
There are some closing costs that a bank won’t pay if the property is a foreclosure. Most of the time the foreclosures will not pay for home warranties and surveys. So those costs get passed along to the buyer.
The law firms that process the foreclosures are usually in other parts of the state like Tampa or Miami. Since they are not local, they are not aware of all the municipalities that can lien property. So I always recommend that you hire an attorney to look over the title policy, review the deed to make sure it gets properly filled out and handle the closing. The cost of all this is around $500. It is money that is well spent. I’ve had several instances where the attorney found mistakes that could have caused the buyer several thousand dollars after closing.
Foreclosure companies are also going to want a quick closing. So plan to close in 30 to 45 days.
Buying New Construction
Do I need a Realtor if I’m buying new construction?
The short answer is YES! Why, because the agent that works for the builder, works for the builder.
You want your interests represented. That is why you want a Buyer’s Agent.
True story: I had a couple building a house and they were anxious to get into the house before their second child was born. Well construction stopped for almost 30 days. The husband called me and he was very frustrated. I called the Vice President of construction and asked why the building had been delayed. He said that the insulation company could not pass the county inspection, therefore the sheetrock couldn’t go up. I told him that was unacceptable and that these buyers needed to get in their new house before the baby was born. He said he’d look into it and get back to me. The next day he called and said that he had spoken to the construction superintendent and that they were getting another crew out to get the insulation corrected so it would pass inspection and that they were going to expedite the installation of the sheetrock. The house was still going to be delayed from the original date, but they could at least make up a couple of weeks.
That’s why you need your own Agent. Also, we are experienced and can advise you on what things you need to do during construction and what things you can save money on by having them done after the home is completed. For instance you want to have the house wired for surround sound during construction, but it might be less expensive to put the speakers in after construction.