The Top Seven Points to Keep in Mind (and Three Costly Mistakes to Avoid)
Generally, the best way to accurately determine a particular home’s market value is to compare it with recent resales of comparable properties dating back to 120 days. This is a general rule but not absolute. Sometimes, for whatever given reason, there are not enough comparable properties to look at in a particular neighborhood at a particular time. This might mean the buyer has to look further back in time, to 180 days or even a year. Sometimes the buyer should enlarge the geographical area of the market analysis to extend to an adjoining neighborhood. While these types of modifications are not ideal, they are sometimes necessary. This can frequently occur in Ave Maria Town, where sometimes different neighborhoods can blend in with one another and/or a particular neighborhood might experience an infrequency in sales. Your real estate professional should be aware of the acute differences experienced by each neighborhood and how these differences should impact the estimated market value of a given home. At the end of the day, your real estate professional should be able to assist you in demonstrably justifying the given worth of a given home through a market analysis based on current trends and conditions.
2. Pick a Good Spot
As the old adage goes, Location, location, location! Buying a home is a major financial and emotional commitment. A homeowner might expect to sell their new home in a year or two and discover they never do. Or, a Homeowner might face the unexpected and realize the need to have to sell their home. Regardless, it is highly recommended that home buyers take into consideration the location of their purchase in terms of resale value and marketability. In Ave Maria, our community is one of the fastest growing communities in the Nation. It would be hard to pick a bad spot in this town. Nonetheless, there are definitely a few crown jewel lots. Moreover, different lots/neighborhoods will accentuate different needs, wants, and lifestyles. Talk to your real estate professional about how you see yourself in your new home, and pay close attention to the location of your prospective purchases.
3. If you are Financing, Make sure you Have an Excellent Lender
Like in any other profession, some lenders are better than others. And some lenders are excellent. When financing a home, your lender is undoubtedly plays the most important role in your real estate transaction. You need the cash to get the keys! Most of the time, it is best to use a lender that is local. Someone who is aware of the various HOA and CDD fees (see costly mistakes to avoid below), as well as any other local customs in the community exercised by Realtor’s and Closing Agents. It is very important for your lender to be communicative and in touch with you throughout the home buying process. In addition, some lenders work better in different areas. You may want to use one lender for your FHA or VA loan, versus someone else for your conventional mortgage. Your real estate professional should be familiar with these issues and can guide you to finding the right lender for your particular circumstances.
4. Carefully review the Seller’s Disclosure Form
Prior to submitting an offer, make sure you carefully review the Seller’s disclosure sheet. This sheet is a standard Florida form that will list in detail the various construction items of the house, along with appliances, pools, and even the lot’s topography. Florida Law requires the Seller to be truthful in their disclosure and to make the Buyer’s aware of any “Latent” (hidden/concealed) defects the property might have. Often, the Seller is unaware and it is the Buyer’s job to discover them (see number six below concerning your home inspector). Importantly, however, if there is a defect and it is disclosed, the Buyer cannot come back after the fact requesting Seller to repair it. In effect, any disclosures made are considered take it or leave it as far as the Buyers are concerned, so it is very important you carefully review this prior to locking in a contract. Your real estate professional should also be guiding you through this process.
5. Decide Whether your Offer will be the Standard Inspection Contract or “As-Is”
In Florida, the two general types of residential sale contracts consist of the standard inspection contract (“Standard Contract”) or the As-Is Contract. Both are useful in different ways from the perspective of both Buyers and Sellers. The SI contract states that the Buyer will conduct an inspection of the home and notify the Seller of any defects found. In turn, the Seller agrees to remedy any discovered defects – either by physically fixing the defect or providing a credit in lieu thereof. Importantly, the duty to remedy does not cover cosmetic items! Cosmetic items include hairline cracks in your tile or floor, worn carpet, marks on the walls etc etc. These cosmetic items really should be reflected in the purchase price of the home. Additionally, it is important to note that the Seller is only obligated to remedy the defect into workable condition. If the Buyer discovers that the ten-year old fridge is not working properly, the Seller is only obligated to provide the Buyer with a ten-year old fridge in good working condition. The Seller is not obligated to provide the Buyer with a brand new fridge.
The As-Is contract consists of a different flavor. In this type of contract, the Buyer and Seller agree that the Buyer has a 15 day “As-Is Inspection period” for the Buyer to inspect the house. Because the Buyer is buying As Is, the Seller has no contractual duty to remedy any defects found in this timeframe. However – alternatively, the Buyer has the ability to walk away from the contract at any time during the Inspection Period for whatever reason Buyer pleases. This unlike the Standard Contract, where the Buyer is contractually bound to stay in the contract as long as Seller remedy’s any defects found. Discuss with your real estate professional what type of offer is the best approach is for you and your situation.
6. Make Sure you Have a Trustworthy and Competent Home Inspector
Another crucial part of your real estate transaction is your home inspection process. Whether you have a Standard or As-Is Contract, you always want to make sure you hire a professional home inspector to perform an inspection on your prospective purchase. A good home inspector will inspect your homeinside and out. They will be ontop of the roof and inside the attic. They will inspect the home’s foundation and outside yard. They will also inspect all appliances and fixtures, checking every window nook and cranny of that dwelling place. It is imperative you have a trusted home inspector because the crux your purchase is having the peace of mind you are buying a well-built home.
7. Make Sure you Have a Good Closing Agent
Your closing agent will be the person who obtains your title insurance for your new home. The closing agent also handles your escrow deposits, and acts as the intermediary for exchanging cash for keys between the Buyer and the Seller. In Florida, the closing agent will either be an Attorney or a Licensed Title Agent. Like your lender, it is extremely important your closing agent is on top of things. He or she is responsible for removing any clouds on title. The Closing Agent must ensure that there are no outstanding HOA, taxes, or liens that are unencumbering the property to prevent an unsuspecting Buyer for assuming such liabilities. The Closing Agent must also work with your lender and loan underwriter to successfully clear funds and bring your transaction to a successful close. Talk to your real estate professional who should be able to guide you in picking a competent and trust worthy closing agent.
Three Costly Mistakes to Avoid When Buying a New Home in Ave Maria
1. If your Buying New Construction, Consult with an Agent
If you think you might buy new construction in Ave Maria, engage a real estate professional to represent you in the process. First- it will not cost you a penny more. In Florida, it is the Seller that pays the Real Estate Professional Fee. This means that as a Buyer, you can have your Agent represent you at absolutely no cost. Your Real Estate Professional should be experienced and know when and what can be negotiated with the Builder. While negotiability may be stickier in some areas, the Builder has been known to drop $20,000+ off of its sticker price. Could you imagine finding out from your neighbor he paid $20,000 less for his home all because his Agent knew what to ask for? Do not make this mistake!
2. Know your Community Development District and Homeowner Fees
Ave Maria homeowners are responsible for both homeowner association and community development district (“CDD”) fees. Both types of fees are very common in Florida, but it is still important to be aware of what and how much they are. Homeowner Fees will vary per neighborhood. Some neighborhoods will have particular amenities and/or landscaping, which result in a higher monthly fee. Other neighborhoods will have a basic amenity package, which will lower your fees. Items your fees pay towards include the town’s waterpark, tennis courts, soccer and baseball fields, Dog Park, children’s park etc. The CDD fee is also a fairly common fee in Florida. Basically, in Ave Maria it is a 30 year bond the Developer took out and placed on the homeowners that is rolled onto the Owners tax bill every year. In some neighborhoods, this bond is roughly an extra $1,300 a year. In other neighborhoods it is a little higher. Your real estate professional should be well aware of all fees and expenses incurred by homeowners and make sure to ask. If you’re on a budget, you do not want to get caught flat footed unaware of these extra expenses
3. Know your Contract’s Timelines
Every real estate contract has a number of timelines, for time is of the essence in Florida Real Estate Transactions. It is important to be aware of them, and missing one could prove to be fatal. One of the most important timelines is your inspection timeline. Whether you have a Standard or As-Is contract, the Buyer will have so many days to inspect the home and put the Seller on notice contractual rights the Buyer might wish to pursue. Likewise, the Seller will also have timelines to follow. Failure to strictly adhere to these timelines by either the Buyer or the Seller could prove very costly if an important inspection item is at issue. Another important timeline is the escrow deposits. Generally, an escrow deposit will shortly follow an accepted offer. It is important for the Buyer to submit this deposit into escrow by the given time period to remain in compliance. Another very important timeline concerns financing and the finance contingency. Financed contracts are almost always contingent upon the Buyer actually obtaining approved financing. Nonetheless, there are several timelines built into the contract that specify what action is required and when on behalf of the Buyer during the financing process. Make sure your real estate professional is proactive and communicative in this regard. Timelines are extremely important and too costly to neglect.