23 December 2021

Tips For Buyers or Sellers

Florida Home Buying Process | Step By Step Guide to Buying A Home

Posted By: Sarah Schwartz

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Are you thinking about buying a new home? Feeling a bit overwhelmed? You're not really sure what to do or even what the home buying process entails? Well, sit back, grab some popcorn, I'm going to explain it to you step by step.

Hi, I'm Sarah Schwartz, a local realtor in Northeast Florida and I'm going to explain the home buying process for you from start to finish. Hopefully everything that we go over will ease your mind and you'll feel more comfortable. First step, find a Realtor!  Ask your friends, search online, check google reviews, just make sure that you find one and you connect with them. You don't have to stick with the first one that you meet. Make sure you find one that you're actually comfortable with. If you don't feel a connection, keep looking. Make sure your Realtor actually listens to what you want and it's not what they want. You'll want to work with someone that's going to answer your calls, answer your texts, reply to your emails and make you feel like you're a priority to them. I can't stress it enough that communication is key in this process. After all this is one of the biggest purchases of your life and the right Realtor can help you get it and the wrong one might not. Speaking for myself as a Realtor, I try to make the process as fun as possible. With my proven systems I can help prevent problems before they become problems. I also live by a very strict "No One Likes To  Wait" policy. I don't like to wait and I don't want to make you wait. This also allows you, the home buyer, to have the best experience and hopefully the least stressful experience possible. I mean that's what everyone wants, right?

After you decide which Realtor you want to work with, the next step is to get pre-approved. Your Realtor will most likely have recommendations for a preferred lender that they work with, maybe even two or three. It's okay to apply with all three, compare rates, see who you connect with the most because they're along for the ride. I just thought I'd come along for the ride with you. Making sure that you choose a good lender is also going to help ensure a smooth transaction. Realtors love local lenders. We know they can close on time, we know that they typically don't have issues and we want this to be a great process. Unfortunately, I've seen closings fall apart the day before and it was because of the lender. Getting pre-approved with a lender will also help ease your mind as far as how much can you afford, what are you comfortable with for a monthly payment, how much are your taxes gonna be? This is gonna help make it a lot easier for when we start looking for homes. During the whole process your lender will ask for updated bank statements, credit card statements, they'll run your credit. Make sure whatever you do, DO NOT open up a new line of credit. Don't apply to get pre-approved for a house and go buy a car the next day. Don't buy new furniture. Wait until you are closed before you spend anything else. You don't want to change your financial picture from the day that you applied to the day that you closed so it is so important during this time to not make any drastic changes. If you're thinking about buying new construction, make sure you check out my video here: Is It Smarter To Have A Realtor When Buying New Construction

And now, the search begins! It is so important for you to tell your Realtor what you are looking for. What's important to you? What's a deal breaker? Do you want three bedrooms or four? Do you want two bathrooms or three? Is it a deal breaker if there's two floors? We need to know what you want so we can show you the best thing for you. Hit me with it, just give it to me straight! It's our job to do our best to find you the perfect home. Next, it's time to schedule showings.  When you walk through a home together with your Realtor, be sure to point out what you like and also what you don't like. Do not feel bad for saying that you don't like a house! We didn't build it. We're here to help you. We won't be offended at all. In fact, it'll help us with our home search for you. This will also help so we aren't wasting your time. 

If you're finding this information helpful, be sure to Check Out My YouTube Channel Here and look out for more tips for buyers. 

Once you find a home that you love, it's time to submit an offer. Two important things: First, it's so important that your offer is written professionally and structured well. Your Realtor will advise you about the best way to structure the offer and also they should talk to the listing agent to find out what's most important to the seller so hopefully your offer will get accepted. I can't tell you how often I hear from listing agents saying that it is so refreshing to see a professional, well-structured and clean offer.  We have to talk about how much to offer. Typically a well-written offer is an indication that it's going to be a smooth transaction without a lot of hiccups. Secondly, it's important to know the trends of the market. Right now people are waiving inspections, they're paying over the appraised value, it's all about what you're comfortable with and you and your Realtor should discuss that and make sure that the offer is tailored to what is good for you. Even though the market is insane right now, it won't last forever. So it's really important to work with a Realtor who's up to date on what's going on.

Now, let's talk about money. There are some upfront costs that you do need to be aware of. Once your offer is accepted, you have three days to turn in your binder or good faith deposit to the title company of the seller's choice. The binder deposit is typically 1-3% of the purchase price. If you need it to be less, just talk to your Realtor about it and they can negotiate it in the deal for you. Try to plan to at least put down $1,000 to $1,500 and don't worry, this goes towards your closing costs at the end. Sometimes the larger binder deposit the more serious the sellers might think that you are, but a lot of the time your Realtor can speak with theirs just about your specific situation.

After that, we have the inspection. We have the first 10 days to inspect the house, do all of our due diligence and also make sure that nothing's wrong. The inspection typically costs between $500 to $600. That's going to be an upfront cost that does need to come out of your pocket. Your Realtor should have some good relationships with inspection companies throughout town so they can help you with that. It's good to try and get the inspection done within the first few days. That way you can check out the report, see what's going on and see what's a must have to be fixed. Luckily, in Florida, you do have the first 10 days to back out of a contract for any reason. If this is something that happens, you will get the binder deposit back. After your Realtor submits the repair request the sellers have 7 days to respond. If they don't respond, you can still back out and get your money back. Or if you guys can't come to terms, that's also another way for you to get your binder deposit back but typically everybody wants the deal to work so we're gonna do what it takes. Negotiations are almost always made when it comes to selling and buying. 

Shortly after the inspection is done, the appraisal is ordered. That's usually between $500 and $600 and that's something that your lender will order but it's also an upfront cost. This will help determine the value of the house. We don't want you overpaying for your house, unless you know that you're going to be, like if you were to do an appraisal gap. In a normal market if the appraisal falls short it's another negotiating tool. In this market it's a little bit trickier. At the closing table you'll be responsible for your own closing costs. Sellers have closing costs and buyers have closing costs. The buyers closing costs are usually 2-5% of the purchase price. These fees may include, but are not limited to, title fees paid to the title company for their services; lender fees, this can include everything from underwriting to loan discount points which can be purchased to lower your interest rate; and typically one year worth of homeowners insurance, which is required by most lenders; possibly private mortgage insurance, which is usually required if your down payment is less than 20%; title insurance, which is a one-time fee required to protect you in case the seller doesn't have full deed to the property; property taxes; recording fees paid to the city or county to record your deed in public records;  and homeowners association fees if the neighborhood has an HOA. 

Weeks will go by and it'll feel like it's taking forever. Until BAM, closing day is here! The week before you close there are some maintenance items that you can do to prepare for your closing date. First thing, make sure you turn the electric and water on so that way it starts in your name on the day that you close. Another thing, update your address and forward your mail. Yayyy!! 

I know we've gone over a lot and it's probably still a little bit overwhelming, but hopefully this has eased your mind a little bit. 

Also, be sure to pick the right Realtor. That way they can help you along the process and take away some of the stress. 

Thanks for reading! Talk soon!

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