As a first time buyer, we understand their may be questions you need answered prior to making a decision…..were here to help!! We did our best to provide you with some basic questions and answers for you to consider when buying a home, condo or investment property here in the Brickell, Coral Gables, Coconut Grove or Miami area. The information provided for you here is to help you understand the real estate sales process and to serve as a reference guide for you. Any legal questions you may have regarding real estate contracts or law should be directed to an attorney. Please be aware that I am not responsible for the actions of any other real estate professionals you may come in contact with. If you do not use my services then I hope I was at least able to educate you somewhat so you don’t run into any pitfalls. If at any time you do not fully understand the information below, please call me toll free at 1-800-442-8171 for clarification. Good luck!!
What is the MLS?
The MLS or Multiple Listing Service is a service that is provided by our local Miami board of realtors (www.miamire.com). This service allows South Florida members to place or access listings in an effort to facilitate real estate sales and rental transactions. MLS listing information, which at one point was only accessible by Realtors, is now available for the general public to view. You may find the following types of properties on the MLS for rent or sale: Single family homes, condominiums, townhouses, commercial, industrial, vacant land and business opportunities. To search the MLS for any of these types of properties, please click on the “Property Purchase” icon and fill out the fields according to what you’re looking for.
My husband and I are re-locating to Miami and looking to purchase a condo. What should we do first?
The first step you should take is to get pre-qualified by your banking institution or mortgage broker. You may want to go to your bank first since you already have a business relationship established with them. It’s possible your banks rates and closing costs will be less expensive then if you were to use a mortgage broker. However, because most banks are “prude” in a sense when it comes to lending money, some buyers may need the service of a mortgage broker who has contacts and access to a wide variety of loan programs normally not offered by banks. When shopping around for a mortgage it’s important for you to understand what your purchasing objectives are. If you’re buying a house for you and your family, you may want to get into a 30 fixed rate loan and call it a day. If you’re buying an investment property, loan programs such as interest only loans and adjustable rate mortgages may be better for you. Please call me directly to discuss in further or if you have any other questions!!
My husband and I just submitted an offer to purchase a home in Coral Gables and placed with our realtor a deposit in the amount of $10,000. Where does this money go?
The realtor should immediately turn over all deposit monies to the accounting department of his/her office so that it may be deposited into the office escrow account. All deposit monies shall remain in the escrow account until your closing date where at that point an escrow disbursement will take place. During the escrow disbursement, a check will be drawn to the title company or attorney closing your deal. Florida law requires all brokerage firms who hold escrow to deposit the money within three business days. Please make sure your realtor provides you with a receipt for the money as well.
I went to the Jade sales office in the Brickell area today where they were selling pre-construction condominiums. There was one in particular that I really liked at a great price. The sales person told me the unit probably would be gone by the end of the day. I had the $25,000 deposit to give her, however, I did want my wife to see the plans first before making a commitment. She would kill me if I lost our money to something she didn’t like. What should I do?
Your situation is very common. There are many buyer’s in the South Florida area at this time running around looking for great condo investment opportunities, but can’t do anything unless their wife or business partner are there to give the green light. If I were you, I would leave the deposit for $25,000 and “tie” up the condo for a few weeks until your wife can go and look as well. Florida law allows for a 15 day right of recession period for all pre-construction units. What that means is that from the time you leave your deposit, sign your sales contract, and receive your condo docs, you will have 15 days to think about your decision and do your due diligence. You are allowed to cancel your contract at anytime within those 15 days with NO PENALTY and your deposit returned to you in full.
What is 1031 tax exchange?
This deals strictly with business and investment properties where the IRS allows for you to “exchange” your current investment property for another without having to pay capital gains (taxes!!) on the property you are selling. The IRS is very specific on how this needs to take place. A 1031 tax exchange requires the help of a special person called a “Qualified Intermediary”. The qualified intermediary will basically hold the proceeds or “profit gain” made from selling your current property in a separate “trust account” and apply that to the purchase of your new investment. The IRS has a few rules you must follow in order to receive this tax break. First, the new investment property must be of equal or greater value then the property you are selling (trading up). Second, they must be of “like kind”. For example, you’re selling a duplex for $250,000 and buying a 4 unit apartment building for $400,000. Third, from the time you claim the 1031 tax exchange, you only have 45 days to identify your replacement property. Forth, you must complete the tax exchange within 180 days.
I just signed a contract to buy a condo at Latitude on the River in the Brickell River District and the sales person told me she didn’t know if the condo association would allow me to have my dog. What if I need to get out of my contract because of this? I don’t want to lose my deposit!!
Your best bet is to get the condo docs from the salesperson and go through them to see what the pet restrictions are in the building. Once you sign the condo doc receipt disclosure you will have three days to due your due diligence. Florida law allows for only a three day rescission period from the time you receive your condominium docs until the time you can cancel your contract and get your deposit back.
I just went into contract for an investment property in the Coral Gables area. How long does it normally take from the time I leave my deposit and sign my contract to the actual closing?
If everyone does their job correctly and you have no problems with your financing, you should be able to close within 30 days. However, it’s vary rare to come across a real estate transaction that doesn’t have some sort of delay that comes up. Most of the delays I have experienced while selling properties here in Miami have come at the end of the transaction and normally involve the buyer’s lender or mortgage broker. That’s why it is very important to figure out what your buying objective is at the beginning and get that pre-approval from your bank or mortgage broker. Once you sign your purchase contract, you will need to get ALL of the documentation or paperwork (pay stubs, tax returns, etc) to your bank or mortgage broker so they can process your loan. If the transaction involves “all cash” the closing could take place anywhere from 10 to 30 days. If for some reason you don’t close on your scheduled date, you will have to have your real estate agent get you an “extension” from the seller by doing an “addendum to the contract”.
I just purchased a townhouse in Coconut Grove “as is”, what does that mean?
Basically it means you will buy the property in its current condition with the right to have a home inspection done. This is also called, “As Is with Right to Inspect”. On the “As Is with Right to Inspect” addendum, the buyer indicates an amount they are willing to pay up to in order to fix any problems that come out on the home inspection report. If the repair amount exceeds the amount the buyer indicated on the addendum, then the buyer can cancel the deal and get his/her deposit back in full with no penalty. The buyer may still purchase the property “As Is” or try to renegotiate with the seller for a credit at closing or a reduction in the sales price to make up the difference if he/she chooses to do so.
I just rented my investment condo on Brickell Key to a nice couple. My realtor told me we had to provide them with a “Lead Based Paint Warning” statement. What is this?
It’s a warning statement given to buyer’s who are purchasing property built before 1978 that lead based paint may exist in the home. Lead based paint poses certain health risks to adults and children. The EPA puts out a pamphlet called “Protect your family from lead in your home” that you real estate agent can provide to you for more information.
What is “Radon Gas”?
Radon gas is a radioactive gas that comes from the natural decay of uranium in the soil. It typically moves up through the ground to the air above and into your home through cracks and other holes in the foundation of your home. Homes that are not properly ventilated may experience a buildup of radon gas. The EPA puts out a pamphlet called “The guide to protecting yourself and your family from radon” that your real estate agent can provide to you for more information.
My family just purchased a home in the Coconut Grove area. After a few months we noticed traces of mold showing up in the closets. We spoke to an attorney and he asked if the seller provided us with a “Mold Disclosure Notice”. What is it?
A mold disclosure notice is a notice from the seller indicating weather or not they know of any presence of mold in the home or condominium. As a buyer you can choose to have a mold inspection done at your own cost. On the mold disclosure notice, if the cost to fix the problem exceeds the repair amount indicated, then you can cancel you deal or renegotiate with the seller to make up the cost difference.
I just purchased a pre-construction investment condo in the Brickell area for my daughter who will be attending the University of Miami. My agent insisted on the seller giving us a “Seller’s Property Disclosure Statement”. No one has ever lived there before, is this necessary? What is it?
Your agent is doing a good job trying to protect you!! Even though no one has ever lived in the unit before, it’s always a good idea to have this information on file. This is a form report from the seller regarding the property as a whole. It is broken down into sections such as plumbing, electrical, appliances etc. In each section, the seller will disclose if they currently have a problem or have had problems in the past with certain items such as a leaking toilet or a short circuiting outlet. It’s a guideline given to the buyer in regards to the “health” of the home or condo. Remember, Florida law requires FULL DISCLOSURE from the seller regarding any facts that may materially affect the value of the residential real property that is not readily observable to the buyer.
A week before closing on my home in Coral Gables, the seller decided he didn’t want to sell. I met all the contingencies of the contract and my bank is ready to close. What can I do?
That’s why I have an attorney close all my deals….because sometimes things like this happen. Basically, if I was handling your transaction I would have our attorney call the seller and advise them that they are in breach of the contract. If the seller still refused to close then our attorney would file a lawsuit for “specific performance”. Specific performance is basically us asking the courts to enforce the contract as written. The court at that point may require the seller to close the transaction as promised. On the other hand, if you’re the one who decides not to close, then the seller can come after your deposit as liquidated damages or sue you for specific performance as well.
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