3 Steps You Need to Follow before Hiring an Escrow Company if You Plan on Buying a Home in Florida
February 08, 2017Florida is a beautiful and diverse state with many different areas that cater to different styles: miles of coastline, vibrant metropolis, or quiet suburban neighborhoods. If you are looking to buy a home in the Sunshine State, the choices are endless. However, because buying a home is probably the largest and most important investment you will ever make, you must examine every detail. It's not just about finding the perfect house, it's also about picking the right neighborhood for you, and the paperwork and processes that are involved in a property purchase, such as choosing an experienced realtor, getting a mortgage, finding a trusted Florida escrow company, and other factors. We understand that the whole process can be a bit daunting; that is why we wanted to give you this step-by-step guide to buying a home in the Sunshine State.
- Choosing the right real estate agent. Working with a realtor is a great advantage and it doesn't cost the buyer a penny to use a real estate agent in Florida. The right real estate agent will make sure you have all the information you need to decide which property or properties suit you best and will guide you through the whole purchasing process.
- Finding the right property for you. This probably goes without saying, but you need to research the prospective properties before deciding where to buy. Make sure you choose the right area for you, one that has everything you need to live comfortably and that adapts to your lifestyle. The realtor is a great help during this part of the process. They have access to the Multiple Listing Service and can use it to present you with several properties that match what you are looking for. However, don't let them do all the work, after all, it's you who'll be living there. You can do an online search and keep yourself informed about different areas to complement the realtor's information. Once you have a list of potential properties, take the time to see them in person before deciding to make an offer.
- Getting a loan pre-approval. While you're shopping for property, you need to simultaneously work through the process of getting the loan—unless you're paying cash that is! It's recommended that you get a mortgage pre-approval the moment you decide it is time for you to buy a house or apartment. Getting pre-approved for a mortgage gives you an advantage against other potential buyers who are not; it can help seal the deal when negotiating with the seller and can help you secure a property you really want, as the seller knows you can actually purchase the property.
You've seen the house or apartment you want and you're one step away of getting a loan, what comes next?
- Making an offer. This is not as simple as it sounds. It is not just about saying you want the property and stating how much you are willing to pay for it. You need to read through the seller's disclosure statement to learn about any issues that the property may have or may have had in the past. In Florida, sellers are required by law to disclose any facts or circumstances about the property that could have a significant impact on its value. Once you reach an agreement, your real estate agent will help you draft a written proposal and negotiate the price with the seller, as well as coordinate the closing process with the escrow agent.
- The seller accepts the offer. A purchase agreement is a legal document that includes the terms and conditions of the transaction. It should be signed by all interested parties (seller and buyer), and includes an acceptance of the offer, the sale price, and an appropriate property description. Once the offer is accepted by the seller and the contract is signed, a deposit of earnest money needs to be paid to an escrow agent, a real estate attorney, or broker. Money should never be paid directly to the seller. The signed contract is sent to a title company or a closing attorney for them to start preparing all the paperwork related to transferring the title to the new owner. At this point, even though disclosure statements are mandatory in the state of Florida, you probably want to carry out independent inspections to make sure the property is in good condition. There are two ways the inspections can go: either everything was disclosed in the seller's statement, or the inspector discovers issues that might be problematic. In the first case, you can move right on to the next step; in the second case, you probably want to re-negotiate your purchase agreement with the seller.
- Getting the Mortgage. If you've been pre-approved for a loan, at this point you need to send the lender the proper documentation so they can decide on the loan approval and issue a loan commitment letter, where it is stated that they will fund the mortgage under specific conditions such as a property appraisal, changes in the buyer's or the property's situation (that may have been discovered by an inspection or a title search), and any other conditions that the lender deems appropriate.
- Closing the transaction. While you're doing all the paperwork to get the loan, the title company you hired is performing a title search to determine whether there are any liens, defects, or other clouds on the title. If the title is considered to be clean, the process continues and the title company commits to issuing a title insurance policy once the sale is finalized. All the required paperwork is prepared and a closing date is established and agreed upon by all parties. You're then informed of how much the final figure is, which is usually based on the mortgage closing costs, property taxes, and other expenses that are included. You should bring this amount on the closing date, often in the form of a wire depending on what the title company requires. On this date, all the parties involved sign the closing documents, including the final loan documents. The title company agent or closing attorney will register the transaction and the property title with the relevant county or city. You receive the keys to your new place and take possession of the property, unless a different agreement has been reached with the seller.
This guide is a simplified version of everything that happens from the moment you decide you want to become a homeowner to the time you receive the keys to your new place. You should always seek the help of reputable real estate professionals, such as realtors and title and escrow companies to guide you through the whole process.
Key Title & Escrow is a well-known escrow company in Florida, and we can help you with your title and escrow needs. Give us a call at (305) 235-4571 or fill out the contact form. One of our representatives will be happy to answer any questions you may have. You can also find us on Facebook as Key Title & Escrow or follow us on Twitter @KeyTitle_Escrow.