How To Buy In Miami

A STEP-BY-STEP RESOURCE FOR A POSITIVE PURCHASING EXPERIENCE

Miami, Florida real estate is among the most popular and competitive markets in the world. It is also the reason why proper preparation and an experienced local team of proven professionals are absolutely necessary when it comes to achieving your real estate goals. The team at Cervera Real Estate brings you more than 50 years of combined experience in Miami real estate, with a proven track record for results that are among the top in all of South Florida. This, combined with their detailed knowledge of neighborhoods, market trends, and the details of successfully completing the sale make them your trusted, one-stop resource for enjoying a positive real estate experience.

This complimentary step-by-step buyer’s guide is just one of the many tools our team is pleased to provide to make your real estate journey a success.

IDENTIFY THE PROPERTY

• Preliminary in-person or telephone/video conference to review your expectations & goals.

• Discussion of property types (single family, condominium, etc.)

• Overview of neighborhoods including lifestyle and schools

• Establishment of purchase budget and timeline

• Recommendations for target areas/locations

PRE-APPROVAL FOR LOAN

One of the most effective ways to be competitive in such a market is to obtain a pre-approval letter from a Lender that verifies your ability to qualify for a mortgage in your target purchase price range.

We help streamline this process by assisting with:

• Recommendation of Established/Trusted Lenders and Financial Institutions
• Follow up with the Lender at all stages of the mortgage approval process
• Recommendation of Established/Trusted Real Estate Attorneys and Accountants

ADDITIONAL SUPPORT FOR FULL MORTGAGE APPLICATION AND APPROVAL

Being pre-approved by a known and respected lender is just as attractive to sellers as a buyer with proof of cash funds. This will allow your offer to be considered with the same respect and authority as all other reasonable offers.

MOVING FORWARD 

THE OFFER

Once a target property has been selected and financing pre-arranged, it’s time to make an offer. This includes a number of actions:

• Initial Offer in Writing

• Good Faith Deposit

• Counter Offer by Seller

• Executed Contract

UNDERSTANDING THE CONTRACT

Real estate contracts in Florida typically follow an approved format, established by the Florida Association of Realtors and the Florida Bar and are designed to protect both buyers and sellers throughout the transaction.

Therefore, it is usual that contracts include:

• Accepted purchase price
• Accepted purchase terms (mortgage vs. cash)
• Financing terms (if applicable) – type of mortgage
• Down payment amount
• Length of inspection period (typically 10 days from contract execution)
• If condominium, association application deadline
• If condominium, length of association documents review period (usually 3 days from receipt of condominium documents)
• Length of title examination period (usually 5 days fromreceipt)
• Date for Closing

Any other required disclosures regarding the property; these may include:

• Radon Gas
• Permits
• Mold
• Flood Zone; Elevation Certification
• Energy Efficiency Rating
• Lead-Based Paint Disclosure (if applicable)
• Homowners’ Association Documents (if applicable)
• Property Tax Disclosure
• Foreign Investment in Real Property Tax Act (FIRPTA)
• Materially Known Facts affecting the Value of the Property

CHOOSING A CLOSING / SETTLEMENT AGENT

Now it is time to choose a closing / settlement agent, a neutral third party who facilitates completing the sale transaction between buyer and seller. The closing / settlement agent is responsible for collecting, holding, and then distributing cash or other compensation (loan) from buyer to seller.

INSPECTIONS

At your expense, you should hire a certified property inspection company to review property conditions including plumbing, electrical, roofing, doors and windows, insect or termite activity, and overall property safety. Usually, at an additional cost, this inspection can also include an open permit search, in order to ensure there are no pending open permits on the property. We will recommend various established / trusted inspection companies from which to choose.

Inspection of the property is required by lenders as part of the loan approval process. If buying cash, it is highly recommended that an inspection of the property be performed as well.

Depending on the results of this inspection you may decide to continue with the property purchase or withdraw from the contract.

LOAN APPROVAL

After the contract is executed, your lender will start processing your application and collect all required documents for the mortgage approval.

These shall include but are not limited to:

• Financial statements
• Telephone or electricity bill as proof of foreign residency (only for foreign nationals)
• Bank recommendation letters (only for foreign nationals)
• Accountant letter (only for foreign nationals)
• Tax returns (or equivalent)
• Recent credit report and/or rating
• Proof of funds for down payment
• Source of funds for down payment
• Income/earning statements

LENDER WILL ORDER APPRAISAL

Your lender will require an appraisal that evaluates whether or not the purchase price is aligned with current/ expected market values in that area. Lenders will rarely (if ever) finance properties that are priced significantly above market. Lender will finance a percentage of the appraised value of the property as offered to you in your original pre-approval. For foreign Nationals it usually is 60% for condos and 70% maximum for Single Family Homes.

The goal is for the appraisal to match the purchase price or be greater than the purchase price.

Sellers may choose to lower the price of a property if it fails to meet appraised value, but they are under no requirement to do so.

You may also choose to hire your own independent appraisal, though it will have less influence over price changes than one ordered by a lender.

FINALIZING THE SALE
TITLE INSPECTION

Attorney performs initial title search to find any unforeseen title issue.

In U.S.A., property held under the name of an owner can be considered an asset against debts. This applies to both corporations that own property as well as individuals. For this reason, a complete title search will be conducted prior to final sale in order to protect the buyer. The Closing agent will deduct from seller’s proceeds any lien amount placed against property.

IMPORTANT FACT

It is not unusual for debts and penalties to be assigned to a property in the form of liens. These can be placed for legitimate reasons such as an unpaid tax liability, guarantee to a contractor or construction company, or as part of a settlement in a personal lawsuit or other legal matter. Liens may also be incorrectly assigned to a property through an incorrect address, mistaken name or place of residence, or an incorrect tax payment status. Because of these scenarios and others like them, buyers are recommended, and required by lenders, to acquire title insurance at closing. This will give you piece of mind that you will have a free and clear title to the property. Title insurance covers new owners beginning on the date the property is acquired and releases the new owners of any liability placed against the property after the date of closing that relates to an issue originally dating back before the transfer of ownership.Title insurance does not remove liability from new owners for liens, debts, or penalties properly assessed to the new owner.

PROPERTY INSURANCE

In Florida, property insurance is not required by the State, but it is a smart idea. It is always required by lenders so that their collateral is protected from unforeseen events.

Hurricane/Windstorm Coverage: This covers the damages and/or losses associated with hurricanes and tropical storms, which are common in South Florida

General Coverage: Theft, vandalism, fire, leaking pipes, liability coverage for injured guests or visitors, and other general claims are covered by this portion of the policy and helps limit your out of pocket expenses due to repairs or replacements. Flood insurance is a good idea as well, and may be required by the lender depending on the location of the property.

WALK-THROUGH

Unless otherwise stated, seller must have moved out of the property prior to the closing date.

Seller must turn over the property in proper condition, with no items missing or damaged from the initial inspection date.

To verify this has been done, a ”walk through” inspection of the property is performed. We physically “walk through” the property together on the same day of the closing, or in some cases, one or two days prior to closing. This is the last step before closing.

CLOSING

When ALL requirements are met, funds are ready, and the lender has approved the loan (if applicable). You are ready to close. Closing is the final procedure in which documents are signed and the sale is completed.

This is the date that you should expect to sign the documents, make the final payment and take final possession of the property.

All documentation regarding title, mortgage, and other paperwork should be complete – including payment terms to seller’s lender (if applicable), debts, and buyer’s and seller’s agents.

Keys and access to the property should be turned over to you upon signing.

CONGRATULATIONS!

• We know the real estate buying process has many steps and things to remember, but we are committed to being with you every step of the way.
• We have handled hundreds of transactions in Miami, Florida– for all kinds of properties, in nearly every neighborhood, and at virtually every price point.
• If you are a first-time buyer we will help you through the entire buying process and will make you aware of any special financing options that are available for first-time buyers.
• What’s more, we are also well-versed in the special circumstances for buyers that are foreign nationals, and we know how to best support your efforts for a smooth, worry-free purchase.
• We trust this guide is a helpful tool in the home buying process. Please note, however, this guide is merely for information purposes only. It should not be relied upon under any circumstances, in your home buying process.