HOW TO BUY REAL ESTATE IN FLORIDA?

 HOW TO BUY REAL ESTATE IN FLORIDA?

Buying real estate in the United States can be both an exciting and daunting endeavor. For first-time buyers, it's a leap into the unknown. However, compared to buying real estate in France and Europe in general, the process is simpler on the other side of the Atlantic.

When it comes to purchasing real estate in Florida, prospective investors will be reassured to know that the dreaded process of "gazumping" (accepting an offer from one potential buyer only to then accept a higher offer from another) is prohibited. Once an offer is accepted, the amount due is paid, and unless due diligence results in a breach of contract, the sale proceeds until the real estate transaction is finalized.

To learn how to buy real estate in Florida, it's important to understand the ins and outs of the selling process. To help you navigate this process, we've created a step-by-step guide.

Step One – Hire a Florida Real Estate Agent

Purchasing real estate in Florida is a very serious undertaking. It is strongly recommended to work with a real estate agent to represent you and guide you throughout the process. A professional will facilitate the process, especially since it costs the buyer nothing. The first step in purchasing real estate in Florida is therefore the most important. Your real estate agent will ensure that you have all the necessary information at your fingertips when you begin your search. He or she will also guide you through all aspects of the Florida property purchase process.

News update: “off-market” offers

As in many places across the United States, real estate inventory is still insufficient in Florida. As a potential buyer, you need to stay ahead of your competition. As such, it's worth looking into "off-market deals , " also known as "quiet listings" or "pocket listings." These are properties for sale that are not listed on Multiple Listing Services (MLS). In simple terms, this means that the real estate agents selling these properties must search for buyers themselves.

Rare in the past, off-market property registrations have gained popularity in recent years among property owners, such that they have become a form of secondary market facing ever-increasing demand.

The National Association of Realtors® (NAR) has issued a new regulation known as "MLS Statement 8.0." Effective January 1, 2020 , it significantly restricts off-market listings.

At first glance, off-market listings may seem counterintuitive to a seller. With demand for real estate outstripping supply and inventory, bidding wars are raging in many neighborhoods. Some sellers engage in off-market listings to test the market, maintain their privacy, or save on agency fees. Others want to create a sense of exclusivity, which can translate into a higher selling price.

For buyers, off-market offers provide access to additional real estate inventory. They can thus consider saving money if the commission is lower. They also avoid competition when purchasing real estate in a desirable area.

Off-market sales involving a single agent can sometimes leave very little room for buyers to negotiate the price. Listings are available through agents or owners, as well as online.

To buy real estate in Florida, request a free consultation with an expert

Benefits of Off-Market Offers for Sellers

Some real estate sellers choose to list their property to test the market, while others see this secondary real estate market as a private sale process or the opportunity to negotiate a lower sales commission with only one agent involved.

Indeed, when a property is listed for sale for more than 30 days, there's a good chance potential buyers will be willing to make low offers to secure the deal. Since off-market deals don't indicate the number of days properties have been on the market, buyers are unlikely to see their property underpriced.

Benefits of Off-Market Offers for Buyers

For buyers, the benefits of off -market listings are twofold. First, these offers provide access to a stock of real estate that other buyers don't see. Furthermore, if the market is particularly dynamic, off-market listings may be the only way to purchase a house or apartment. Generally, the deals to be had are attractive, given that the commission payable by the seller is lower.

Not all buyers are necessarily looking for a primary residence. Some investors are looking for properties to rent out or resell with the aim of making a profit. An off -market listing in a large, popular neighborhood can be an excellent way to achieve this goal.

The implications of the MLS 8.0 declaration?

NAR 's MLS 8.0 statement is not a law in the traditional sense. Because the National Association of Realtors (NAR) is a management association and not a legal entity, all members, both brokers and agents, are required to comply with the regulations. Non-NAR members, however, are not affected by the regulations. It's worth noting, however, that 89% of recent home buyers in the United States used a real estate agent or broker. Of these, 7 out of 10 are licensed, which means, in practical terms, that Statement 8.0 applies to most residential real estate transactions.

Step Two: Find a Property

Start your search. Real estate prices are constantly rising; therefore, the offer you have access to today may not be as attractive tomorrow. Your real estate agent has access to the MLS (Multiple Listings Service); they will actively use their expertise to find listings that match your requirements and goals. Of course, to buy real estate in Florida, it is entirely possible to browse the listings yourself, using the internet, for example.

The more you search, the more information you need to gain about prices and what's within your budget. Be prepared to listen to your real estate agent's comments and advice about the neighborhood and streets in the area you're interested in. This real estate professional has valuable on-the-ground experience that should be put to good use. Your real estate agent's local knowledge can be a great help in this part of the process.

Once you've found listings that match your needs, it's highly recommended that you travel to see the properties in person. In Florida, you can attend open houses; your real estate agent can also schedule appointments with the seller's agents on your behalf. If you truly can't travel to Florida, it's even more important that your real estate agent is a serious professional with excellent knowledge of the local market!

Step 3: Get pre-approved for the financial loan

The third step involves financing your Florida property. If you plan to pay cash, skip to step four below.

Before you seriously start looking to buy real estate in Florida, it's a good idea to get pre-approved for a mortgage, just in case you see a property you really like. Without this step, you likely won't be the seller's first choice if there are multiple offers. Furthermore, you may not even be certain you'll be able to purchase the property.

Please note: In the United States, prequalification and preapproval are two different things. Prequalification means that you have provided details of your income and financial commitments to a lender, who has estimated how much you can spend. Preapproval means that the lender has checked your creditworthiness (in the form of a credit report) and your debt-to-income ratio, and has properly analyzed your financial situation. Once these checks are completed, you will receive a preapproval letter. This can help you seal the deal during negotiations with the seller; it indicates that you are creditworthy and that your chances of obtaining a financial loan for your loan are good.

To buy real estate in Florida, request a free consultation with an expert

Step Four: Submit an Offer to Buy Florida Real Estate

Now that you've found the right property for you and have reviewed the seller's disclosure statement, which outlines any issues the seller is aware of with the property, it's time to make an offer.

In Florida, the offer is made through a formal contract that outlines the specific requirements and conditions of each party, the buyer and the seller.

Some real estate agents may first approach the seller's real estate agent with a verbal offer. This allows them to verify the other party's response before beginning the usual written process. Some real estate professionals advise their clients to only make offers in writing. When presented in this way, these offers generally tend to be considered more seriously by the intended parties.

Of course, the seller is not obligated to accept the offer, even if the proposed price matches the listing. Furthermore, sellers are not required to explain why they are rejecting a particular offer. Typically, most buyers receive a response within 24 to 48 hours, and in most cases, the seller will quickly make their reaction known if the offer is too low.

Step Five: Acceptance of the Offer

From the moment you learn that your offer to purchase real estate in Florida has been accepted, remember that there are many steps ahead that could raise questions or issues on both sides. As with everything else, it's the details that matter when buying real estate in the USA.

Once your offer is accepted, if you haven't yet paid a deposit, you'll need to do so upon signing the contract. Be careful: the lock-up fee may be jeopardized if either party fails to honor the contract.

Depending on the terms of the contract, the buyer typically pays the remaining deposit within the first few days of signing the contract. Then, it's time to start addressing the terms and conditions of your contract. The presence and support of a real estate agent are essential at this stage, as is the quality of their work and team.

Step Six: Signing the Contracts

The Florida real estate purchase contract must be drawn up by your real estate agent and must contain a set of details. As the buyer, you must sign it. In many cases, buyers are asked to pay a deposit, i.e., a portion of the earnest money deposit, to demonstrate your seriousness in purchasing real estate in Florida. Keep in mind that if your offer is accepted and you then withdraw from the transaction without making the necessary provisions in the contract, the amount paid will simply be forfeited.

There are two main real estate purchase contracts in Florida. The standard contract stipulates that if problems are discovered in certain areas of the property upon inspection, the seller is required to repair them. An allowance for these repairs is included in the contract. It can be as much as 1.5% of the property's price.

The other contract involves the purchase of the property as-is. With this type of contract, if the inspection report reveals problems, the seller is not obligated to make the repairs. In practical terms, this means the buyer has more flexibility to withdraw from the transaction if they decide the house isn't right for them. This is also the only contract that allows the buyer to receive a full refund of the deposit if they are not satisfied during the due diligence phase.

The components of the contract:

The price offered by the buyer

The percentage or value of the deposit deposited, and the value of the entire deposit due at the end of the due diligence (usually 10%)

The time limit for responding to the seller's offer

The proposed closing date. In Florida, most closings take place within 30 to 45 days of the contract signing date. However, this period may vary depending on specific circumstances.

Repair limits, applicable under an “as is” purchase contract

Financing and deadlines. The contract should stipulate that the sale will only be completed if your loan application is approved; it should also specify the maximum interest rate and loan terms that suit you.

Inventory of items included in the purchase of the property

Step Seven 7 Closing the Real Estate Transaction

You will be invited to a closing meeting, which your real estate agent, as well as a real estate attorney, can attend on your behalf. You will review and sign all the documents that allow you to purchase real estate in Florida, and your real estate agent or attorney will verify that everything is in order. The funds will then be transferred from the escrow account, and you will receive the keys to your new property, which you now own.