Vanessa Barnes

Traditionally the REALTOR's® fee to the listing and selling agent, comes in the form of a commission that is paid by the Seller at closing. If you have any questions about whether you will be responsible for paying a commission, you should always ask your REALTOR®.

Buying a home will probably rank as one of the biggest personal investments. Being organized will contribute significantly to getting the best deal possible with the least amount of stress. It's important to anticipate the steps required to successfully achieve your housing goal and to build a plan of action that gets you there.

Before you can build a plan of action, take the time to lay the groundwork for your decision-making process.

Evaluate your finances:You will first want to ask yourself: How much can I afford to pay for a home? If you are not sure about your price range, you can speak with a lender to get pre-qualified.

Check your credit:Lenders will check your credit report and score to determine how much of a risk they are taking by loaning you the money to purchase your home. If you have not checked your credit report, it is important that you do. Even if you have had no credit problems in the past – it is best to check there are no errors. Under the Fair and Accurate Credit Transactions Act (FACT Act) consumers can request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies. www.AnnualCreditReport.com processes requests for free credit file disclosures (commonly called credit reports) through the three credit bureaus: Transunion, Experian and Expedia.

Determine your needs:Second, ask yourself where you want to live and what is the best location for you and/or your family. Things to consider:

• Convenience for all family members
• Proximity to work, school
• Local transportation
• Type of home: condominium, townhome, or single family home
• New home construction, custom home or re-sale
• Square footage
• Bedrooms/Bathrooms

There are many factors to consider when selecting a neighborhood that is right for you. Think about the location in terms of commute time to work, distance from leisure-time activities, and proximity to shopping, schools or any other places you frequent. You may think of others factors that are important to you.

Scout out the Neighborhood

• Talk to people who live there.
• Drive through the entire area at different times of the day, during the week, and on weekends.
• Look carefully at how well other homes in the area are being maintained—are they painted; are the yards well cared for; are parked cars in good condition

Neighborhood Factors to Consider

• Look for things such as access to major thoroughfares, highways, and shopping.
• Listen for noise created by commerce, roads, railways, public areas, schools, etc.
• Check with local civic, police, fire, and school officials to find information about the area.
• Research environmental topics such as soil and water quality, as well as floodplain implications.
• Study traffic patterns around the area at different times of the day and measure drive time from the area to work.
• Is the neighborhood near parks, places of religious worship, recreation centers, shopping, theaters, restaurants, public transportation, schools, etc.?
• Does the neighborhood have a Homeowner’s Association?

Once you have found the home or property you wish to purchase, I will help you prepare an offer. Offers are made on standard forms that have been approved by The Florida Bar and the Florida Association of REALTORs®.

Some terms of the Contract that are negotiable include the Closing Date, who pays for the Title Insurance, Repair Costs, etc. Here are some more examples of negotiable items that you will see on the Contract for Sale and Purchase:

1. Location and Legal Description of the Property.The contract hinges on this information being completely correct.
2. The Amount of the Offer.Obviously you need to decide how much to offer. I will prepare a Comparative Market Analysis of the area to help guide you with this decision.
3. Good Faith Deposit. This is the amount that you will deposit into an escrow account to be held until the closing. It is customary for the Seller’s broker or the Title Company handling the closing to hold this in their escrow account, but it is also acceptable for the Buyer’s Broker to hold the escrow. Please keep in mind that there are strict guidelines and laws, which govern real estate transactions and escrow accounts.
4. Financing.There is a financing clause in the contract if there is a need for Mortgage Financing. This clause is important because it states specific terms that need to be fulfilled and assigns a time for these to be completed. If the Buyer cannot secure a loan under the terms agreed upon in the Contract, the Buyer may be entitled to the return of the escrowed funds without penalty.
5. Closing Date.This is somewhat negotiable and usually at least 30-60 from the effective date of the contract. The effective date of a contract, is the date that the last party signed the contract.
6. Time for Acceptance of Offer and Counteroffers.This is typically anywhere between 24 -48 hours after the offer has been delivered in writing, by fax, in person, or by email.
7. Repair Costs.Maximum repair costs are also negotiable. The contract has a default for General Repairs and Repairs due to Wood Destroying Organisms. The default on a standard contract at this time is 1.5% of the agreed upon contract sale price, unless otherwise agreed to during the contract negotiations.
8. Items that are included with the sale or excluded from the sale.This is also negotiable and usually concerns items such as window treatments, light fixtures, appliances not already covered under the contract, pool equipment, and in some cases, furnishings. Remember though, you are selling your home, it’s not a garage sale, don’t lose the contract for sale of the home over negotiations for a dinette fixture that could easily be replaced for $100.
9. Inspection Period.The inspection must be performed within the agreed upon time period. If the inspection is not performed within this time period, the Buyer, in most cases, loses the right to make demands for repairs.
10. Appraisal. If the Buyer is seeking a loan from a Lending Institution, the Lender, in almost all cases, will require that an appraisal be performed and that the property appraise for the agreed upon contract price. Otherwise, the lender may not make the loan. You can include an addendum to the contract that states that they have the right to cancel the contract if the property does not appraise for the sales price or at or above an agreed upon price. This would be one of the few situations where an appraisal could be considered a negotiable term of the contract.
11. Title Insurance.Who pays for the title insurance, is a negotiable item. However, it is customary whoever pays for the Title Insurance selects the title and closing agent, and the location of the closing.
12. Other Contingencies. There are many other contingencies that can be written into a contract, usually through addendums. An example of a typical contingency is that the contract is contingent upon the Buyer’s successful closing of another property, usually their previous home. This and most other addendums are negotiable.

Many home seekers like the idea of moving into a brand new home. New home construction, can involve numerous choices for the buyer, such as floorplans, elevations, cosmetic options and upgrades. When looking for a new home, there are two basic categories:

Production Homesare generally located in communities established by developers, and can consist of a single family home, townhome, or a condominium. Buyers have the option of choosing one of many designs and floorplans that are standard for the community. Most production builders provide on-site models which display the various floorplans and exterior elevations. Buying a new home does not necessarily mean you have to wait several months for construction. Often time’s builders have existing homes for sale that can be occupied immediately – which is great if you need something right away!

Custom Homesare generally more expensive and take longer to construct, because each home is built to the exact specification, design and taste of the buyer. When building a custom home, you interact directly with the builder, architect, designers and construction specialists to explain what features you want in your new home. This attention to the buyer’s desires is one of the key reasons why many people opt for custom building. To find out more you can visit: www.custombuilt.com .

General Home Inspection

You have found the house, your offer has been accepted - now you need to hire a professional home inspector. This inspection is an opportunity to have an expert look closely at the property you are purchasing and get a written opinion as to its condition.

As with most professions, a professional organization for home inspectors exists. The ASHI (American Society of Home Inspection) www.ashi.org requires members to pass written exams, have a specific amount of job experience and follow a code of ethics. Your REALTOR® may also assist you in finding a qualified inspector.

A home inspection typically examines heating and central air conditioning, plumbing, electrical systems, roof, floors and appliances (to name a few). Once the inspector examines the house they will write up a report of findings which will provide you with a good idea on the current condition of the home. Once the inspection is complete, review the inspection report carefully.

Wood Destroying Organism (WDO) Inspection

A WDO Inspection Report is a written report of an inspection on a structure for visible and accessible evidence of an infestation or damage by wood destroying organisms. Usually this means subterranean or dry wood termites, but will also cover wood destroying beetles and wood destroying fungi. In Florida, carpenter ants and carpenter bees do NOT have to be reported. A WDO report is also commonly called a "Termite Inspection.”

A WDO inspection report is provided when a home or other structure is being sold and the mortgage lender or buyer requires the inspection as part of the transaction. IF an inspection is done for these purposes, the inspection must be reported on a specific report form, DACS 13645, as required by Florida Law. (Chapter 482, Florida Statutes). The form is incorrectly referred to as an "1145 report" based on a very old, outdated form number.

The WDO inspection can only be done by a wood-destroying organisms identification cardholder (or a certified operator with the wood-destroying organisms category) of a pest control company licensed by the state of Florida. These employees must receive special training to be qualified as WDO inspectors.

When you purchase your primary home in Florida you are entitled to a $25,000 homestead exemption each tax year. That means the tax collector will deduct $25,000 from what the property appraiser says your home is worth each year when your taxes are calculated. Once you have filed for your homestead exemption, you do not need to do it again, unless you sell that home and buy another one.

When you apply for Homestead Exemption, you must have legal and equitable title to your property, and as of January 1st, have established residency thereon; and you must file the application for Homestead Exemption at the Property Appraiser's Office on or before March 1st.

The filing process differs from county to county – so below are some of the county websites for more details and a list of required documents you will need when filing.

If you are not paying cash for a property, chances are the contract contains a Financing contingency. The typical financing contingency calls for the buyer to make application and loan approval within a given period of time, usually 5 days for the application and requires 30 days for loan approval. While this may seem like a relatively short amount of time, remember that the buyer is asking the seller to take the property off the market for the duration of the contract until closing.

If the contract is contingent on financing, sellers would rather know sooner than later, so that they may get the property back on the market and find another buyer. All lenders are going to require an appraisal, although all contracts don’t necessarily depend on the property appraising for the contract price.

The appraisal reassures the lender that the contracted price for the property is equivalent to or more than the appraised value of the property. Once the lenders underwriter reviews all of the supporting documents, provided by the borrower and the loan officer, and the appraisal, the loan will be given a clear to close, which simply means that all the conditions for financing have been met. A closing date, time and location is scheduled. The lender typically wires the funds to the closing agent on the day of the closing. Prior to the closing, however, a Closing Statement, also called a HUD-1, is provided to the buyer and seller for their review. This statement details all of the amounts associated with the entire contract, including the financing.

We always accompany our clients to the closing and review the closing statement prior to the closing, assuring that there are no surprises at the closing table that could jeopardize the closing.

Financing a property involves many essential elements. There are different viewpoints on how and at what point in the Buying Process you should seek Financing. Most sellers request to see a Pre-Approval accompany any offers on their property; therefore, prior to seeing a property, it is advisable to begin the process of applying for a loan. This will accomplish many goals prior to shopping for a home, primarily, determining how much home you can afford, given your financial status and credit score.

Many buyers agents ask to see a Mortgage Loan Pre-Approval, which merely shows them that you have already taken steps towards purchasing a home and that you are serious about purchasing a home. For those buyers who are paying cash for a property most sellers will still request to see proof of funds for the purchase before taking their property off the market.

While there are ways to determine how much of a loan you could afford, like the links to the Mortgage Calculators provided here on my site, the best way is to speak to a Lender/Bank. They are in a position to give you the best idea of what kind of loan you could qualify for and subsequently get approved for. Once you have been Pre-Approved for a specific loan amount, it will make shopping for a home much easier. You can now search for a home with confidence, knowing that you can make an offer on a property with the knowledge of what the monthly payments will be like.

Once you apply for a loan, you will be sent documents required by lenders to provide to borrowers. One of the most important documents you will receive is the Good Faith Estimate (GFE). This document will estimate all of the closing costs associated with the loan. It will also give you estimates for the annual mortgage rate, monthly principal and interest payments, and any other required fees and/or monthly payments associated with the loan.

Hopefully, the information that I have provided on this site will assist you. If you would like to get pre-approved just click on the “find me a home” link or the “calculator/pre-approval” button. I am always available to answer questions and provide information about the home buying process.

Should I get pre-qualified or pre-approved before I begin house-hunting?

Pre-qualification is recommended and will assist you in searching for homes in your price range.

What is the difference of getting Pre-Qualified vs. Pre-Approved?

When you are pre-qualified, a lender will give you an estimate on how much you can afford to borrow. The estimate is based on general questions about your income, debt, assets, and credit history.

However, being pre-qualified and pre-approved are different and if you are pre-qualified it does not necessarily mean you are approved.

Pre-approved means you have filled out the mortgage application, the lender has assessed your qualifications, reviewed your credit report, verified your employment, assets, income, expenses, etc

This will give you a number of advantages:

• First - When you do find a property, sellers will take your offer more seriously because you have a lender that is committed to backing your offer.
• Second - It does give the assurance that you're looking at homes you can confidently afford to finance. Your efforts will be focused on properties that match your purchasing ability.
• Third - You'll have a significant edge over the other buyers who aren't pre-approved. In situations where there are multiple offers on a property, this can be the difference between having your offer accepted or losing the property to another buyer.

It is important to be pre-approved with a legitimate lender. Legitimate lenders include: banks, mortgage bankers, credit unions, savings and loan associations, mortgage brokers, or online lenders.

By asking the right questions and knowing exactly what your needs are, you can find the right loan.

It is still true that the better qualifications you have, the lower your interest rate will be. However, there are mortgages available for almost everyone; it's the interest rates or the down payments that will vary.

Before speaking with a lender, know what monthly dollar amount you feel comfortable committing too. Then when you discuss mortgage options with your lender, it is easier for you to determine the monthly amount and what value of home the monthly amount translates into. Be sure not to put yourself in a position where you will be paying more each month than you intended simply because the "dream" house requires it.

Do your research on the types of mortgages available to you and find the one that best suits your needs. There are a number of considerations to be made in terms of finding the best mortgage for each individual:

• Do you want a fixed mortgage rate, where you will always know what your payment is going to be?
• Do you only need the mortgage for a short time? Do you plan on staying in the home for a short period of time for 3 or 5 years?
• What are your long-term goals?
• Do you intend to resell the property immediately?

Whether you have a contract on a home or are ready to start searching, you want to be sure not to open new credit card accounts, or make any large purchases. This could affect your credit and your mortgage approval, as this subject to a final evaluation of your financial situation.

Even if you have accumulated enough savings, you should consider not making any large purchases until after closing to ensure your home purchase is not delayed or worse jeopardized