The Florida Real Estate Contract (and Time).

I am not an attorney.  This is not meant to be a lesson in contract law.  Since most people do not buy and sell real estate routinely this post contains some general observations by a Florida real estate broker.

The contract to which I refer is the Florida Realtors/Florida Bar Contract for Sale and Purchase.  While the obvious things like property location, offer amount and terms are important another less noticeable item is quite important - dates and days.   

In other words, time.

Contained within the multiple pages is this bold printed sentence  "Time is of the essence in this contract."

Most real estate agents end up having to remind their customers to not forget the "time" elements and their importance to the process.

What are some of these time elements and situations?

First, the most important one to buyers and sellers is the most obvious, the closing date.  After all, the sale or purchase is the "ultimate event."

The closing date designates the day ownership transfers.  Unless there is some post occupancy agreement or lease in place then it is customary and expected for a property to be vacant, cleaned and ready for the new owners on the date of closing.

But there are other "times" buyers and sellers need to be as concerned about as well.   The first one that sticks out is the time for acceptance.  The buyer puts a response due by date when the offer is prepared.  If there is a counter offer there is another response due date for the buyer.

And if there is an inspection contingency (and there almost always is) there will be a deadline.  It is this property inspection contingecy buyers should view as a "get out of jail free card." 

Read "Do inspection contingencies allow buyers to walk too easily?"

Other "times" may include a loan application, mortgage approval/loan commitment, title commitment, surveys, permit issues (if any), etc. or whatever else may be required by the circumstances of the sale (short sales, estate sales, for example).

My point here is simply to remind buyers and sellers to know the dates and deadlines in your home purchase/sale.   If it were not so important the attorneys would not have included the bolded statement...

  "Time is of the essence in this contract."

Ready to sell your Melbourne, Florida home?  Call me at 321-693-3850 if I can help.  Ready to buy a home in Florida, I can help!

Again, I want to remind the reader...I AM NOT AN ATTORNEY.

What condition should a seller leave their house in at closing?

One of the last steps in the home buying process is for the buyer to do a a final walk through inspection.  With my buyers I prefer to do this on the way to the closing table.

The main focus of the final walk through is to make sure the house is in the same condition it was in when contracted including the appliances and lights, etc. that are supposed to remain are still present.

Not nearly as valuable as the physical house and associated property there is also an expectation the property will be clean.   While there will not be a white glove inspection it is expected that the property will be emptied of trash and personal contents.

It is expected that hazardous materials like old paint cans and insecticides and flammable items will be gone as well and not left in the garage.

Trash at the curb is usually not a problem.  Even older appliances or TVs that will be picked up is not a problem as long as a special pickup scheduled by seller, of course. 

While it is not necessary to have Merry Maids clean your house before going to closing please respect your buyers by having your house ready for the new owners.

And if a gift certificate for Merry Maids is desired, in Brevard County, order here.



What is a "Walk Through?"







"Cleaning "image courtesy of AKARAKINGDOMS at FreeDigitalPhotos.net
"Garbage Truck Driver"  image courtesy of vectorolie at FreeDigitalPhotos.net

Home Seller Tips: Dealing with multiple offers.

As the Brevard County, Florida home sales market continues to heat up with fewer move in ready listings sellers are finding themselves in a very good position.  Buyers should enter the market knowing they may not be the only buyers wanting the home they find.

Sellers are seeing multiple offers more frequently. 

How many sellers would not want to be able to say "Give me your highest and best offer"? 

But sometimes the highest may not be worth the paper it is written on! 

Why?  Because most buyers are financing. 

Financing requires an appraisal.  Many buyer's agents make it a practice to include an appraisal addendum which basically says either appraise at or above contract price or I can walk.

Appraisal contingencies are not that uncommon.  Most cash buyers I have worked with opt for an appraisal addendum as well.  Who wants to pay more than a house is worth?

So how does a seller evaluate multiple offers?  The most important advice I can give here is to evaluate the offers just as you would any other offer. 

Here are two of the most important considerations with any offer to purchase your home.

1. First and foremost, sellers know your bottom line.    Know what is and is not negotiable.  
2. Remember the offer is often much more than the price. Read my thoughts on when the highest offer may not be the best offer.  Remember terms define the real price.

A few words of advice for buyers who find themselves in a seller's market.  

1. Be realistic with your offer.  Make it an appropriate "lets talk offer" that, even if rejected, will result in a counteroffer.
2. Your offer should include reasonable terms such as a defined closing date, reasonable deposit (escrow),  appropriate support like a mortgage pre-approval letter at the time of offer.
3. In a multiple offer situation which is becoming more common in Brevard County, consider including a letter to the seller explaining why you like the house so much.  Whatever it takes to get the home of your dreams.
4. Calling the listing agent will not result in a better deal for you.  The agent works for the seller.

Whether you are ready to buy a home in Melbourne, Florida or to buy a condo in Cocoa Beach, Florida, give me a call at 321-693-3850 if I can help in any way.  

Home Buyer Tips: Would Disney World accept 80% on price of admission?

Home Buyer Tips:  Would Disney World accept 80% on price of admission?

What kind of response would you get if you went over to Disney World in Orlando and went up to the admission gate and offered $84 for Disney World admission?

This really is meant to be a rhetorical question.  The response would likely be something like "Please step aside for those willing to pay the price of admission."

Now, lets change the scenario.

What kind of response do you think you would get if you went to a home seller in Viera, Florida and offered 80-85% of listing price?   [By the way, the $84 used  above represents 80% of the Disney World single day ticket price of $105]

Although several responses are possible the most likely one will be similar to the "Step aside and let the buyers in who are willing to make a serious offer."

What is a serious offer?  While price is usually issue number one when it comes to evaluating a serious offer it may not be the highest priority.   An offer that is above the market price may not appraise and subsequently will fail to close. 

A seller may accept an offer that is less but cleaner (not excessive contingencies).  It may be the offer with the soonest closing date.  It may be the "as is" offer instead of the one with a repair contingency.  It may be an offer with conventional financing as opposed to FHA or VA loans.  It may be the offer without the personal property requests (TV, washer/dryer, riding mower, etc).

Suffice it to say home buyers, like Disney visitors, must be willing to pay the price of admission.  And while that price is likely negotiable starting at 80% of list price may not be the best strategy.  

Make it a Lets Talk Offer!
 
Serious Buyers, Motivated Sellers!

Home Buying Process - Getting to the Closing (after the contract is signed!)

Whether buyer or seller a meeting of the minds (signed contract) is only the beginning of the end.   There will be many players (and emotions) involved in the process from contract signatures to the exchanging of keys.  At times there will be drama, excitement, fears, relief....you name it! 

The process I speak of here is specific to the Brevard County, Florida real estate purchase/sale process but similarities exist regardless of location.

Who are some of the actors?

Besides the obvious actors like the buyer, seller, buyer's real estate agent and seller's real estate agent probably the most important actor is the mortgage lender.

It is critical buyers have an open communication link with their mortgage lender.  Once a mortgage pre-approval has been received it is critical that nothing be done to impact it (no job change, no new major purchases, no new credit account or application, etc.).

Then there are the property inspectors.  The home inspector and termite inspectors are key to identifying red flags that either need to be addressed or send the message to walk away.  Some issues may require further examination by the expert (i.e. HVAC, contractor, etc.).   And if there is a pool or spa there may be an additional inspector involved as well.

With my buyers in Brevard County, Florida I always include an inspection contingency - a buyer's "get out of jail free card"  in all offers to purchase a home including cash offers.

Then there is the appraiser.  Although not part of the mortgage lender mentioned above it is this independent appraisal of value that ultimately determines whether a mortgage lender will indeed provide a mortgage loan.   This where I prefer buyers use a local lender who uses a local appraisal company  although a buyer has no impact on which appraiser is used.  I just spoke with an agent who had a buyer fail to obtain a mortgage because the appraiser was in Tampa - almost 150 miles away!

Finally, there is the closing agent.  In Brevard County, Florida the closing agent is typically a title company although attorneys provide closing services as well.

There can be other incidental actors involved as well depending on whether the sale is a distressed sale (short sale or foreclosure) or even an estate sale.

Whether buyer or seller keep your lines of communication open with your real estate agent as well as your mortgage lender.  Ask questions as they arise and be responsive to any and all requests for additional information.

Remember, with real estate transactions time is of the essence.  Do not miss deadlines!

Considering buying a home in Brevard County, Florida?  Call me at 321-693-3850 or send me an email.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Where does the best advice available for home buyers come from?

If you are considering buying a home in the near future there will not be a shortage of advice.

Advice will likely come from all directions. 

The know-it-all at work will likely be among the first to offer advice as he knows it all.   And then get ready for the family experts.   Uncle Joe who knows everything will tell you the secrets of getting the best deal in town ("Go FSBO" may even be uttered).  And then lets not forget the Internet.  There is never a shortage of information on the Internet.

Buying a home requires specialized knowledge.  Buying a home requires specialized local knowledge.

Evaluating advice (solicited or not) can be a challenge.

If you are considering buying a Brevard County, Florida home here is some more unsolicited advice. But, in this case, I am a real estate agent with specialized local knowledge.  [By the way, this is the answer to the question posed in the title.]

A few points of unsolicited home buying advice from experience...

• Deal with the finances first - period.  
• Perception is reality.  You need someone to clarify your perception.
• Don't spend as much as you "can" on your home.  Regardless of the direction often real estate market buying high is not good strategy.
• Decide what your real requirements are and go from there. Then the pluses that separate these homes will lead you to the right decision for you. 
• Don't acquiesce to the "must have" items you will regret not having later. 
• Don't trust all you read.  The seller or their agent may be mistaken or, hopefully not, intentionally misleading.  This also applies to "public" records and MLS listing information. 
• Don't rely solely on what you "hear" someone say.
• Once a mortgage is pre-approved, freeze life as you know it. Don't make major purchases, open new accounts, change jobs.
• The only thing that can not be changed later is location.  Choose wisely.
• Homeowner associations exist to maintain uniformity and conformity.  
• Work with one real estate agent only.  Remember buyers don't pay the real estate agent fees - sellers do!
• Take your real estate agent with you to new construction models as well.

The above general comments are not all-inclusive but are provided only as a starting point to focus the reader.

If buying a home in Florida is in your plans, give me a call at 321-693-3850 if I can assist in any way.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Home Buyer Tips: The whole truth and nothing but the truth...

The home buying process is filled with questioners... mortgage loan officer,  Realtor®, seller, insurance agent, etc.  And it is critical answers provided by completely honest.

This starts with the first step in the home buying process - the mortgage pre approval.

Related article:  The Home Buying Process in Florida - Where do I start?

When applying for a mortgage loan it is imperative all the answers provided be on the level.  Why can't I just ballpark some answers?   Because every piece of information on that application is subject to verification and most of the critical stuff (like income, employment, debts and payments) will be verified and re-verified before final approval at the closing table!

When buying a home I suggest non-cash buyers (most) do two things -

1. provide accurate answers and documentation,
2. temporarily freeze their lives until closing (no loans, no job change, no new debts or major expenditures).

When you are ready to buy a Melbourne, Florida home please give me a call at 321-693-3850 if I can help in any way.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

Home Buyer Tips: Negotiation Strategies - Somewhere, Something, Sometimes

How do you know if the seller will negotiate?   You don't but if the list price is somewhere within the realm of reality, then there is probably a willingness to give a little somewhere.

I can't recall ever selling a house where a seller was not negotiable on something.

Sometimes the price is close enough to the buyer's opinion of value that buyers will look for other things to negotiate.  It may be the terms of the deal like closing dates, seller assistance with closing costs or perhaps a repair issue even on an "as is" offer.

Here are two important points about negotiation.

1. It doesn't hurt to ask.   The first rule of rule estate offers is put it in writing.  This eliminates confusion as well as indicates sincerity.  A word of caution here...in a multiple offer situation it is often the cleanest offer (fewer contingencies) sellers opt to accept.  
2. It is not personal.   Sometimes the parties, including some real estate agents, let things get personal.  When things become personal, sometimes there is only one resolution - walk away.  Motivated sellers and buyers want a deal!

Negotiation is not a contest in which either side "must win!"  

Ready to buy or sell a house or condo in Melbourne, Florida?  Give me a call of send me an email if I can help!