Florida Home Buying Tips Part 1

How To Get The Best Deal In Florida Part 1

If you’re moving to the Sunshine State, there’s some things you need to know about the lay of the land in order to maximize your purchase. Florida is a unique place. From all the crazy stories you hear about what happens here, to the actual Florida Man himself; hurricanes, alligators and the beach, it seems as if Florida is always in the news for something. Regardless of the crazy stories, the state is one of the best states in America. More people are moving here every day (a thousand to be exact), than there are leaving. So, if you’re thinking about moving here or buying a house in Florida, here are some tips that will help you navigate a somewhat complex homebuying process. 

Buying a home is an exciting process that takes you from top to bottom emotionally at times when things are dreamy and when things are stressful. Due to the natural complexity of the transaction, the number of people involved, and the fact that this is the biggest purchase of your life, if something goes wrong it can haunt you for years to come. Skilled professionals can make the process go smoothly and close on time, while amateurs and rookies can cause you to pay more than you should, miss your closing date, or worse, not close at all. If you’re a first time buyer, you’ll see and hear a lot of things you’re not familiar with, so be prepared to feel overwhelmed, intimidated, and stressed at times. But with a little research and preparation, you’ll be able to manage the buying process better, which is why we wrote this article.  

The Basic Steps When Buying A Home

Although every home buying process is a little different and unique to its own set of challenges and things to get done, here’s a high-level overview of how it works in 10 essential steps. We'll cover steps 1 - 4 in Part 1. 

1. Find a real estate agent. 
2. Get pre-approved for a mortgage. 
3. Shopping for a home. 
4. Make an offer. 
5. Get the home “under contract” (meaning the seller accepted your offer and you both sign the purchase agreement to buy the home). 
6. Lock in your rate. 
7. Home inspection. 
8. Home appraisal. 
9. Lender clears title and verifies what the taxes, insurance, and other fees are with the home. 
10. Closing.

This article is designed to give you more understanding about each step, what’s important about each step, and tips to make each step go as smooth as possible.  

Find a real estate agent.

If you don’t already know someone who is a real estate agent or know someone who knows one, don’t worry, there’s no shortage of agents in Florida. In fact, Florida has more real estate agents than any other state, over 215,000. And with about 22 million residents, that’s one agent for every 100 people. As 1,000 people move to Florida every day, it’s not surprising that there’s more agents in Florida than anywhere else. But why is it important to have an agent? You don’t have to, there’s no law saying you have to have an agent represent you; so why do most buyers have one? 

Real estate agents help buyers get the best deal possible, they know where the land mines are and they’re paid by the seller, not the buyer. 

Having a real estate agent is like having a whitewater rafting guide direct you down the river instead of doing it by yourself. He’s an expert at the terrain and knows where the rocks are, how to best avoid them, and, most importantly, what to do if you hit one. Studies have shown the buyers get better deals when they are being represented by a real estate agent. Real estate agents quarterback the transaction and call the plays with your approval. They are your advocate, negotiate on your behalf, and help to drive the deal to closing. They don’t get paid until you close, so they’re just as tied up in it as you are and committed to getting it to close. But first you have to find one, a good one. 

Listings
Homes the agent prepares for you to look at. 

If you don’t know one, or know someone who does, ask a trusted friend or family member for a referral. If they don’t know one, ask the mortgage loan officer (MLO) you get pre-approved with. Chances are you’ll get a good referral. And if it comes from the loan officer, you know they’re good because they’ve likely worked together in the past and closed loans with each other. Agents and LOs that have previous experience work better together, just as any two people do after getting to know each other. Prior work experience creates a magical synergy between the two most important people in your life, your agent and your MLO at your mortgage lender. The better these two people work together, the better experience you will have as a buyer. 

Unknown to you, the buyer, are many fires these two skilled professionals put out before causing major damage. With so many things going on with a loan file, so many people involved, and deadlines to hit within a tight schedule, fires big and small pop up all the time. Having a good agent and loan officer will help you best manage these certain, yet unforeseen situations the best way possible. And, you’ll never know about most of them, unless you’re needed to help fix the problem. 

Your agent does a five primary things for you as a buyer: 

• Prepares houses for you to look at. 
• Negotiates the sale price on your behalf. 
• Prepares the contract to sign. 
• Leads communication with the seller and their agent. 
• Helps move the process along to close. 

Prepares houses for you to look at.
A main advantage of having an agent represent you is the time you save doing market research. A good agent will prepare a list of houses based on your family's needs, where you want to live, and what price range you want to stay in. They gather information on each home from a database called the MLS, which is a site that aggregates data on homes that are for sales for real estate agents. 

Agents will usually email you some listings, along with pictures (think Zillow), then schedule appointments for you and your agent to go look at the house in-person. The agent acts as a second set of eyes and professional opinion on each home. Since they do this for a living, they’re more apt to spot something that might be wrong and provide sound advice by not being emotionally attached to the buying experience. 

Negotiates the sale price on your behalf. 
Here’s where they provide real value. Statistically, buyers who use agents get a better deal than those who don’t. Negotiating is a skill, no matter what is being negotiated. And, when it comes to the biggest, most emotional purchase of your life, you 1) Want a skilled negotiator doing it for you on your behalf, and 2) Want the least emotionally involved person running point in the talks so you don’t make a mistake that costs you for the next 30 years of your life. Ask any homeowner who represented themselves before and made a mistake, and they’ll remember it clearly, and tell you how to avoid it yourself. Don’t be that buyer. 

There’s a saying that an attorney who represents themselves in court has a fool for a client. And while you’re not on trial when buying a home, the next 30 years of your life and finances are. Just as the best attorney wouldn’t represent themselves in court, the same is true about having a skilled industry professional who is not emotionally involved in the transaction represent you during the home buying process–especially during the super-critical phase of contract negotiation. Your agent will know if the asking price is unreasonable based on the market, the square footage, and other recent similar sales (or comps as they’re called in the industry); along with the overall condition of the house. They might see some red-flags with the house that you miss because you’re too busy dreaming about some other part of the house. 

Prepares the contract to sign. 
When you’ve found your dream home and your agent has negotiated a purchase price, it’s time to sign! All residential property sales agreements are pretty much alike and contain the same basic information about the transaction. There’s no standard form in the state of Florida (unlike Arizona), or on the Federal level (unlike the loan application, URLA 1003) that buyers and sellers use for the purchase agreements. The company that the real estate agents works for, the Broker, most likely has one they insist their agents use. But don’t worry, this and any addendums that might pop up in the future, will all be handled by your agent. This is their job and what they get paid to do. 

Once the agreement is prepared, you’ll have a chance to review it and all the legalese on it. While there are more than this, here are some of the basic parts of a purchase agreement: 

1. Sales price.
   No contract is complete without an agreed upon price for the thing of value being exchanged between parties. 
2. Property address and details.
   This simply lists the address of the home and a description of the property. 
3. Contingencies.
   These are things that need to be completed before closing, such as any repairs or loan approval where your lender says your final approved. 
4. Closing date.
   This is an agreed upon date to sign all the closing documents and is usually about 30 days from the day you sign the agreement to buy the home. 
5. Binder amount.
   This is a good faith deposit you give to the seller that’s held in escrow by the title company and is applied towards the closing costs when you close. It’s usually anywhere from $1,000 - $5,000 depending on the purchase price of the home. The higher the price, the higher the binder (or escrow deposit) you’ll put down. 
6. Title company.
   In Florida, the seller usually chooses who the title company is. There are some exceptions to this but don’t worry, your agent will help you out with this if you do select the title company. The title company’s job is the hold your binder in escrow, make sure the title of the home is free and clear (in other words, it doesn't have any liens or encumbrances that could jeopardize you in the future), gather other information on the home, prepare closing documents, and work with the lender to make sure the final closing information is accurate (this last step is called “balancing the CD”). 
7. Buyers and sellers information.
   Of course, you and the seller have to legally attach your names to the contract by signing. The real estate agents will sign as well.  

Leads communication with the seller and their agent throughout the process.
Your agent will run point on all communications with the seller and their agent. Both agents usually communicate with each other, which is why the seller has an agent as well, to save them a lot of time, headache, and money. If something pops up, your agent will let you know about it, if they need you to do something in order to help resolve it. Good communication is key. There are moments when miscommunication occurs. This is natural and to be expected. Again, this is why having a loan officer and an agent who have worked together in the past is so important to ensuring good, clear communication and fast closings. 

Seller's Agent
The real estate agent representing the people selling the home. 

How fast your team is able to put out fires that pop up is driven by how well they communicate with each other, and how well they know each other. When you have an agent and an MLO that are in sync together, it’s a thing of beauty. Problems are solved quickly and quietly; and buyers are super duper happy thinking everything has some smoothly, when, in reality, it just appears that way to you. Our boys who do dangerous things in dark places have a saying, success is silent, failure is public. This is true for what’s happening behind the scenes of your loan where you’ll never know about a lot of the issues that are being resolved, and that’s the way it should be. Lastly, you don’t want to be the one having to lead communication with the seller and their agent anyways. Although you don’t know everything that goes on, it’s nice to have someone do that for you so you can go about your life as emotionally balanced as possible during this time.

Helps move the process along to close. 
There are some skills you can’t quantify. These intangibles, as they’re called in football, are what make winners winners. A quarterback can have all the assumed qualities of a superstar with height, arm strength, and throwing motion; but when the game starts they fumble the ball and throw picks. When Tim Tebow was playing football, analysts always talked about how his throwing mechanics were terrible. He didn’t bring his hand up high enough and release the ball fast enough. But there was one thing the guy could do, and do better than just about anyone; win games. He won two national championships and was the first sophomore Heisman winner simply because he was extraordinarily good at improvising when the play broke down. When a play breaks down, nobody quite knows what’s going to happen, which allowed him the opportunity to do some things he was really good at, like run, run over defenders, or fire the ball downfield. 

Plays break down in the home buying process, but if you’ve got an agent that’s adept to problem solve by thinking fast on their feet, these intangible skills can mean the difference between winning the home of your dreams or losing it. This is the most important reason to have an agent represent you, a good agent, that can drive the loan down the field to the goal, closing. 

  
Far Left: Dwight Skyers is a leading real estate agent in Florida that Bee has closed multiple homes with.

Get pre-approved for a mortgage

One of the first questions you’ll get from an agent is, “Are you pre-approved yet?” Because agent’s only get paid when you close, it’s understandable they want to make sure you’re a qualified buyer and not waiting their time. And while you don’t have to be pre-approved to look at houses, it’s always good to do so that you get the best effort out of the agent. After all, nobody wants to work for free. The seller will also ask for a copy of your pre-approval letter when you make an offer on a home, so it’s best to go ahead and get it done right up front, at least 6 months before you want to close on your new home. 

Getting pre-approved should be easy, but with some lenders, it’s not. If your loan officer isn’t good, fire them and go with another lender. 

If you don’t have a preferred mortgage company already, ask a trusted friend or family member if they know a good one you can use. You can also ask the agent if they have a preferred lender they can refer you to, which is usually a good option; or, find a company that has good customer reviews and ratings. If you’re self-employed, be sure to have two most recent tax returns available to verify your income. All borrowers will send over income and asset information, such as bank statements or a gift letter if a family member is helping you out with the down payment. Regardless of your income situation, you should be able to get pre-approved in less than an hour if you’re applying during regular business hours. If you suddenly get the urge to apply at 2 am, you probably won’t finish until the next business day. Some companies work weekends, like we do, to best serve our agents and customer spur-of-the-moment needs. 

Getting fully pre-approved gives you three benefits when buying a home:

• Borrowing certainty. 
• Selecting a loan that’s right for you.
• Avoiding problems and setting realistic expectations.

Borrowing certainty.
After your loan application has been reviewed by the lender, you know exactly what you qualify to buy, and can look in that price range. If you find something slightly outside of your budget, your agent can help create a plan to help you qualify for it with seller credits or in other ways. Seller credits is money the seller agrees to pay you to help cover closing costs, and can add up to be a lot of money. For example, if you’re buying a home for $350,000 the seller can agree to give you up to $27,000 towards closing costs depending on how much you’re putting down to buy the home. Another way would be to come up with a little bit more money for the down payment, or consider an adjustable rate mortgage that usually comes with a lower payment than a 30-year fixed. Both solutions would help you stretch your buying budget a little further. 

Selecting a loan that’s right for you.
There are many different loan options to choose from. Each will get you into your ideal home, but they’re different in how much they’ll cost you over the life of the loan. The easiest way to see how much you’ll pay is to simply multiply the principle and interest payment by 360 payments (for a 30-year fixed rate mortgage).

For example: 

$250,000 loan amount 
$1,580 principle and interest payment X 30
= $568,800 total repayment on loan over 30 years

If one loan is more than the other, go with the cheaper option. 

As each buyer has a different buying budget, here are some things to consider about the loan options: 

USDA Loan
Finance up to 101% of the home’s value + seller credits allow you to buy a home with almost $0 at closing. Broward, Monroe, Duval, Pinellas County and most of South Florida around the Miami/Dada area are not eligible for USDA financing, but about 80% of Florida is eligible for USDA financing. 

• 620 minimum credit score required by most lenders
• No down payment requirement. Finance up to 101% of the home’s value
• 6% Max seller credits

VA Loan
If you’re a veteran, reserve or active duty, you may qualify to use your VA benefits to get a VA loan. These are the best loans available and are designed to house the honorable men and women of the armed forces. 

• 620 minimum credit score required by most lenders
• No down payment requirement
• 4% Max seller credits

FHA Loan
If you’re a buyer with less-than-perfect credit, an FHA loan might be for you. FHA loans are the most costly loans you can get, but are available for those with bad credit or things on their credit that aren’t so good, such as collections accounts. 

• 580 minimum credit score required by most lenders (with 3.5% down payment)
• 500 minimum credit score required by most lenders (with 10% down payment)
• 3.5% minimum down payment (of the home’s value)
• 6% Max seller credits

Conventional Loan
These are the most popular mortgages and are insured by Fannie Mae and Freddie Mac. They have the lowest costs and the second lowest rates (VA loans have the best rates you can get).  

• 620 minimum credit score required by most lenders 
• 3% minimum down payment (of the home’s value)
• 9% Max seller credits

Which is Best? A Fixed or Adjustable Rate Mortgage (ARM)?

The average person will move over 11 ½ times in their life. So, if you think the home you’re buying is your “forever home”, there’s a good chance it won’t be. Even though you might be thinking you’ll live in the home forever, career, family and other life events sometimes change your plans. While there are some drawbacks to an ARM that should be carefully considered, such as being able to afford the new payment when the first adjustment occurs (could be higher or lower depending on the future market and where interest rates are at then), here are the main benefits of adjustable rate mortgages: 

A Lower Initial Payment 
If you’re stretching your budget for the home you want to buy, you might want to consider an adjustable rate mortgage. Unlike fixed rate mortgages whose interest rates never change, ARMs have much lower interest rates and payments at the beginning of the loan, which could be up to the first 10 years. The beginning of the loan is called the fixed period and the interest rate doesn’t change during the first part of the loan. Because you’re getting a lower rate and payment, buyers can save money at the beginning of owning their home. ARMs are a good option for young buyers wanting to focus heavily on their long-term retirement goals. By getting a lower monthly mortgage payment, you can invest more early which provides the greatest compounding return. 

The Rate Could Possible Get Lower
After the initial fixed period, your rate will adjust about one time per year (sometimes every six months, depending on the adjustment frequency). This period is called the adjustment period. The new interest rate is based on something called an index, which is merely a rate market to base how your rate will move, up or down. If the index is lower when your rate adjusts, your rate will drop along with your payment. If it’s higher, your rate will increase along with your payment. Most adjustments up or down are capped to prevent payment swings that are too wild and unreasonable. However, these caps will not stop your rate and payment rising or falling quite a bit, so plan accordingly by asking the mortgage company what the payment would be in a worst-case scenario. 

An ARM Is Good For Movers & Property Investors
Seeing how people move a lot, an adjustable rate mortgage is a great option for someone who knows they’ll be moving in a few years. Homeowners who move every few years can build up a nice real estate portfolio by renting out the home they’re leaving and buying a new one with an ARM. By reporting rental income on your tax returns, homeowners can offset the mortgage payments and still qualify for each new house they buy as they move around the country. Each rental property becomes an appreciating, cash flow positive, self-sustaining asset, building equity for the owner. It’s easy to build up a real estate portfolio of 4 - 5 houses over the course of one’s lifetime by doing this. And, when you finally retire and sell the houses, you could easily profit $1M. Combined with a healthy retirement fund, you can retire extremely comfortably, able to enjoy retirement without worrying about financial security. 

Avoiding problems and setting realistic expectations.
Another reason to get pre-approved up front is that you’ll know if there’s any problems with your credit, income or assets. If there is, you want to fix them before you and your agent waste time looking at houses. It also allows you to have realistic expectations about your buying budget. Lots of first time buyers have champagne taste and beer wallets because they don’t know what they don’t know. Knowing exactly what you qualify for is key to starting the process off on the right foot. Having unrealistic expectations will set you up for disappointment. 

Many mortgage lenders will tell buyers they qualify for something higher than what they actually can get approved for just to get them in the door to get their business. This bait-and-switch is a common tactic and is designed to get you emotionally involved with them, to spend a lot of time with them so that they string you along until the very end just to throw some sort of surprise at you right before closing, such as a higher interest rate or having to pay for more discount points to afford the loan. This is a horrible practice that is a source of major consumer pain in home lending. Make sure your mortgage loan officer is up front with you, setting proper expectations so that there’s no surprises (or as few as possible). 

Down Payment Tip
Many people think it’s good to put down 20% to avoid paying PMI, private mortgage insurance. However, if you went with the lowest down payment option (3%) and invested the rest with an annual average return of 7%, that would yield $388,225 over 30 years, in the example below:

$300,000 purchase price
$60,000 20% down payment
$9,000 3% down payment 
$18,707 total PMI over the life of the loan if you put 3% down
$51,000 down payment difference between 20% and 3%
$388,225 total est return when yielding 7% return over 30 years

= $369,518 net profit minus the PMI cost

Things to consider when looking at a home to buy:

• Location, location, location.
  You can change a lot about the home after you buy it, but you can’t change where it is. Be sure to drive around the neighborhood, go to the grocery store, drive to the schools you’ll be taking kids to, talk to the school, talk to neighbors to see what they’re like and what the community is like, find out where you’re favorite places to eat are, and check out entertainment options near the home. Your agent can do some market research for you to tell you if the area is on the decline or not; and what the crime rate is.
  
  
• Homeowners insurance cost
  Although Florida is a warm, inviting place with white sandy beaches and miles of coastline, it does come with typical Florida weather that includes an active yearly hurricane season. Wind damage, floods, and hurricanes are common in Florida. The best ways to prepare for them is to buy a home that was built to withstand the sub-tropical elements, and to invest in the right homeowners insurance. Monthly premiums for each house you make an offer on should be quoted by and agent and factored into your monthly budget projections.
  
  Be aware, insurance rates can change depending on where you are in the state, and just because they’re one price for one house you look at doesn’t mean they’ll be the same price for the next one, even if it’s in close proximity. You’ll usually pay less insurance with a home built in 2002 or newer because it was built to the most recent building code requirements. If you’re trying to decide between two properties, the cost of insurance might help you decide.

Here are some thing that will make your insurance costs more expensive: 

  - Older plumbing such as galvanized pipes. 
  - Outdated electrical wiring. 
  - No hurricane straps. 
  - Located on the coastal area. 
  - Older roofs that do not meet wind mitigation standards. 

• Deed restricted communities
  Florida has unique property laws that grant immense power to homeowners associations (HOA). These covenants and restrictions are easy for an HOA to enforce, and leave the homeowner with little recourse. As the saying goes, “You can’t fight City Hall,” the same is true for fighting with an HOA. So, before you consider buying in one of Florida’s many deed restricted communities, be sure to read through the fine print about what you’re allowed to do and what you’re not allowed to do. These neighborhoods are governed by an homeowners association that all owners must pay regular fees to in return for the association maintaining certain voted-upon rules and community maintenance.
  
  In many cases this is ideal, but in frequent cases some rules can cramp a homeowner’s ability to style their home the way they want. For example, lawn maintenance must be kept up to community standards and exterior paint schemes must be approved by the association. So, if you’ve dreamed of a bright pink with green spots on the front door, you might have a problem.

Shopping For A Home

Of course you want to look at price, square footage, bedrooms, bathroom, etc. But here are some other things to consider when looking at a home to buy: 

• Location, Location, Location
  You can change a lot about the home after you buy it, but you can’t change where it is. Be sure to drive around the neighborhood, go to the grocery store, drive to the schools you’ll be taking kids to, talk to the school, talk to neighbors to see what they’re like and what the community is like, find out where you’re favorite places to eat are, and check out entertainment options near the home. Your agent can do some market research for you to tell you if the area is on the decline or not; and what the crime rate is.
  
  
• School districts are important
  If you have kids you want to know how the schools and county is rated. There’s most likely a Facebook group of Mom’s who are the best source of knowledge about the inner workings of the school, how the teachers are, and how well the children are being educated. There’s also sports leagues to check out, to see how competitive they are and how well the young athletes are progressing their skills. Luckily, if you’re buying in Florida, especially on the East Coast, you’re sure to find a highly rated school district with great educators and a thriving sports league with many options to play.
  
  
• Community
  If you find a home you fall head-over-heels in love with, you tend to overlook some things that might bother you when the newness of the home wears off and you venture out into the community. To get a complete picture of what it will be like living in the home, spend a weekend going out in the community seeing the sights, dining at the restaurants, or visiting a church in the area. All of these things will give you a complete picture and idea of what living there will actually be like. If you fall more in love with the lifestyle and experiences, great. And if you don’t, be thankful you didn’t end up buying a home somewhere you’d later regret.
  
  
• Homeowners Insurance (HOI) Cost & Coverage
  Although Florida is a warm, inviting place with white sandy beaches and miles of coastline, it does come with typical Florida weather that includes an active yearly hurricane season. Wind damage, floods, and hurricanes are common in Florida. Getting insurance for your new home may seem straightforward, but it’s not as easy as it seems. However, with some quick research and cost comparison, you should be alright.
  
  For starters, the best ways to prepare for the Florida weather is to buy a home that was built to withstand the sub-tropical elements, and to invest in the right homeowners insurance. 

Compare coverage
A lot of homeowners believe insurance policies are all pretty much the same. They are not. The Devil is in the details, and may come back to haunt you when filing a claim on your most valuable asset. If you’re going after the cheapest policy you can find to satisfy the lender’s coverage requirements, you might end up regretting it later when you think you’re covered but aren’t. Monthly insurance premiums for each house you make an offer on should be quoted by an agent and factored into your monthly budget projections. 

Lender required coverage: Dwelling

Recommended additional coverage:
- Hurricane
- Wind
- Flood insurance

Be aware, insurance rates can change depending on where you are in the state, and just because they’re one price for one house you look at doesn’t mean they’ll be the same price for the next one, even if it’s in close proximity. You’ll usually pay less insurance with a home built in 2002 or newer because it was built to the most recent building code requirements. If you’re trying to decide between two properties, the cost of insurance might help you decide.

Here are some thing that will make your insurance costs more expensive: 

• Older plumbing such as galvanized pipes. 
• Outdated electrical wiring. 
• No hurricane straps. 
• Located on the coastal area. 
• Older roofs that do not meet wind mitigation standards.
  

Escrow Your Insurance Payments Each Month
Life happens when you least expect it and the last thing you want is to not have insurance because of a missed payment when you need it most. But if you’re including your insurance payments with your mortgage payment each month (this is called “escrowing your insurance payments”), you’re sure to have coverage when a literal storm hits. While you can certainly not escrow your monthly HOI premiums if the lender allows it, this is something that needs to be paid on auto-pilot each month because you never know when you’re going to need it. Besides, you can’t get insurance when there’s an active hurricane off the coast of Florida, so it might be too late if you wait. If you’re payments are escrowed, you can set it and forget it–as Ron Popeil might have said.

Know the details
You’re most likely not an insurance expert. Few are. But that’s okay. Here’s a list of terms that will dominate your policy you need to know and ask the insurance agent about:

• What is the deductible?
• What is the liability coverage?
• What are the premiums (monthly payments)?
• What are the riders? 
• What is the replacement cost?
• What is the sub-limit? 
• What is the actual cash value of the home? 

Deed restricted communities
Florida has unique property laws that grant immense power to homeowners associations (HOA). These covenants and restrictions are easy for an HOA to enforce, and leave the homeowner with little recourse. As the saying goes, “You can’t fight City Hall,” the same is true for fighting with an HOA. So, before you consider buying in one of Florida’s many deed restricted communities, be sure to read through the fine print about what you’re allowed to do and what you’re not allowed to do. These neighborhoods are governed by an homeowners association that all owners must pay regular fees to in return for the association maintaining certain voted-upon rules and community maintenance.

In many cases this is ideal, but in frequent cases some rules can cramp a homeowner’s ability to style their home the way they want. For example, lawn maintenance must be kept up to community standards and exterior paint schemes must be approved by the association. So, if you’ve dreamed of a bright pink with green spots on the front door, you might have a problem.

Making An Offer

When you’re ready to make an offer, your agent will advise you on how much it should be. There are various factors to consider when structuring an offer, and this is where the real estate agent expertise really comes in handy. Not to say you could do it yourself, but when it comes time to negotiate with the seller's agent, you want a professional real estate negotiator representing you. And that’s your agent. 

5 tips for a winning offer

1. Show them you’re a serious buyer.
   This means be pre-approved before you make the offer. Both real estate agents, the your’s and the sellers, don’t get paid until the deal closes. So, they want to know they’re not wasting their time. If a seller has two identical offers, but one is pre-approved and the other isn’t, which one do you think they’re going to go with?
   
   
2. Research the market, the seller, and their home.
   There is little to no privacy anymore these days, and you’d be surprised what you can find about the seller and their home online. Check public records, social media and talk to neighbors. If talking to neighbors seems a little awkward, don’t make it awkward. Be polite and friendly, letting them know you’re looking to buy the house next door and wanted to meet them in advance to ask about the neighborhood. If more than one neighbor wants the seller to leave, this could be a red flag about how they maintained the home. Remember, if everyone has a problem with you, you might be the problem.
   
   Your agent will research the home and market for you, and will provide you with good information to help you make a sound decision. Don’t get so emotionally attached to the home you’re blinded by love and overlook a glaring issue. This isn’t a relationship where people can change and learn to love one another. You’re stuck with this purchase. If you fall in love with it, then out of love with it, it’s no one’s fault but your own. When you’re shopping for a home it’s always best to leave emotions out of it as best as possible and do lots of research so that you manage your own expectations well. You will have fewer future surprises by doing this, and, as a result, be much happier in your new home.
   
   
3. Leave some wiggle room.
   This is famously called bracketing in a negotiation and is a common tactic used on both sides of the transaction. Again, this is where your agent will help you to best structure the offer based on what you’re wanting and where the agent thinks they can get the offer accepted. Expect some back and forth between the two agents as they offer, counter-offer, and counter-offer again. This is normal. Rarely is the first offer accepted. Negotiating the terms has a natural ebb and flow to it that [hopefully] your agent has a lot of experience with. Knowing you have a good real estate agent will help you manage the natural emotional swings during this phase.
   
   
4. Go easy on the contingencies.
   A contingency is something that needs to happen before closing. Usually, these are things the seller has to do to the home in order for it to pass an inspection and appraisal. Focus on the big things, not the small ones. In some cases, a house needs some work done to it in order to qualify for financing by the lender. Your agent and loan officer can advise on these matters. Financing contingencies, such as getting a qualified appraisal and passing an inspection are big things. After all, if you can’t get a mortgage to buy the home, both parties are screwed. Small, non-essential repairs and credits are small things you might want to overlook if the market is hot and favoring sellers (meaning there are lots of buyers).
   
   
5. Make a reasonable offer.
   At the end of the day, it’s all about the seller getting the money they’re looking for to sell. This is where your agent will help you a lot. This is also where recent comparable sales of similar homes will be used as a reference to base your offer on. Trust your agent here. Homebuyers that go against their expert advisors recommendations have a high risk of not getting the home under contract.
   
   
6. Don’t get emotionally attached to a house.
   In hot real estate markets you’ll most likely not buy the first home you make an offer on. You should expect to make an offer on up to 5 houses when home shopping. The real estate market in Florida is hot, overall, with lots of buyers eagerly snatching up properties. You also contend with cash buyers from out of town, property investors, and large corporations buying up houses. 60 minutes did an entire special on the ultra-competitive housing market in Jacksonville, Florida.
   
   By sticking to the process and expecting some bumps, you’ll have less stress during this exciting period of trying to find the home of your dreams!