Frequently Asked Questions
Buying or selling a home can be an overwhelming experience. There is so much information spread through word of mouth and over the internet, how do you know who to believe and what to do? I have compiled a list of some of the most frequently asked questions with answers. This is just a summary for a more detailed answer to a specific question just give me a call.
Where do I begin to find a home?
You can start by giving me a call and I will walk you through the process. Read the articles from the link “Buying” including the one titled The Buying Process.
I don’t want to buy for a while, is there anything I can do now?
Yes. You can start by pulling your credit report and work at improving your credit score. Start saving your money to budget for closing costs and a down payment.
Why should I buy now since Miami has recently experienced tremendous appreciation and the market is about to go bust?
People have been saying that for a while and now they wish they bought last year. Its true South Florida has experienced tremendous appreciation and would be unlikely to see this continue indefinitely but there are still plenty of smart purchases to be made. The dynamics of this area are unique. Factors such as proximity to the beaches, excellent weather, terrific shopping and entertainment, decreasing crime and proximity to domestic and international markets all make for continued demand. There is an International mix of people who all want a piece of Miami real estate.
Who will hold my deposit money?
The buyer can choose either a lawyer or a title company to hold escrow. This will be disbursed at closing.
Why do I need to talk to anyone about buying a home since I can do it all on the internet? I can find a home, get a loan, etc.
The internet does have a wealth of information to get you going. But a computer can never tell you if a particular home “feels right”. Also, there are many web sites that have only partial or
incomplete information. I recommend you verify all information before you make a buying or selling decision.
How do I find out how much home I can afford?
Talk to a mortgage broker to get pre approved. They can help you with amount of monthly payments and down payment that make sense.
My co-worker told me to wait until I find a home and then start looking at the financing. Is that a good idea?
No. That is back wards! You want to know how much you can realistically afford before you start searching. Also, when you submit an offer you want to include a letter stating you are pre approved.
My father said I should use his mortgage broker. Is that a good idea?
Talk to a few mortgage brokers and see which ones you click with best. In addition to looking at their fees and service see what your gut feel is.
Is it better to get a loan directly from a lender or use a mortgage broker? My friend told me a broker is just a middle man and I will save money if I go “direct”.
The key difference between brokers and lenders is that brokers offer loan programs from many different lenders. This means they can shop around and get you the best program that fits your individual needs.
My credit is really bad. Is there any way I can qualify for a loan?
You’d be amazed at the profile of buyers that qualify for a loan. Talk to a mortgage broker that specializes in bad credit applicants. Chances are they have a program for you.
How do I decide who is a good mortgage broker?
Like any professional you choose to work with, you need to feel comfortable working with them. Ask them questions about their experience, how they will help you, what their fees are and how quickly they will respond to you.
Should I make sure I get a rate lock?
This partially depends on when your closing date is. If you get a rate you are happy with, don’t wait to take the risk rates will increase.
What is a good faith estimate?
This is the mortgage brokers estimate that includes an estimate of closing costs, monthly payments and pre-paid items. Ask your broker if they will give you a guaranteed estimate.
How do I estimate my monthly payments and cash to close?
Either your mortgage broker or I can help you with this. The important thing is to take into account not only your principle and interest but also any home owner fees, special assessments, and taxes. Also items that are paid outside of closing such as inspection fees, appraisal, and building fees.
Miami is such a hot market I can just sell my home by putting a sign in the front yard and by placing an ad in the newspaper. Why should I pay a realtor a commission when I can make more money if I sell on my own?
You can make in initial attempt to sell on your own to “save the commission”, but there is a good reason why 85% of real estate transactions involve a realtor. Do you really want to deal with the phone calls, showings, inspections, and stressful negotiations? Are you comfortable being in your home with a stranger? Are you familiar with the Florida contracts and disclosure laws? How will you not appear too needy if you negotiate directly with a buyer? How will you handle multiple offers? Are you sure you are pricing your home to get the most money? How will you screen a serious buyer vs. someone who says “I’ll give you $500,000 for your home”, only to disappear the next day. What will you do if the buyer brings a law suit against you? In short, if you have a lot of time on your hands, enjoy emotional turmoil, and aren’t afraid of risking the sale of your most important asset, then try and sell on your own.
How do I choose a realtor?
In a similar fashion you would choose your CPA, lawyer, doctor or any other professional. First of all, you should trust your realtor and feel comfortable having them as a partner in your transaction. Ask them the typical questions about experience, the local market, what special programs they have, exactly how they plan to work for you and how they are compensated.
Realtors only care about their commission and don’t care about my needs. How can I find a realtor that will treat me right?
This starts with a careful selection. It is also important that you and your realtor are on the same page. Like any partnership, you must share the same goal or you will never get there. After talking with them you will have a gut feel of who is best for you. Above all, don’t select a realtor simply because they offer a lower commission. To their claim of how much you will save, ask yourself what is being
Should I select the realtor that promises me to get the highest price?
No. Pricing should be determined by market parameters, not on an individual’s promise. You want to choose a price that makes the most sense for you neighborhood and your specific selling situation.
I talked with a company that will put my house in the MLS for a flat fee. Is this a good way to save money when selling?
You get what you pay for. Placing your home in the MLS is nice, but that is the beginning of what a full service realtor will do for you.
My cousin told me to wait to sell until market conditions improve. Is it better to wait for more favorable conditions?
Depending on the circumstances it may be advisable for you to postpone selling. But market timing is an impossible thing to do. Your personal circumstances will dictate when you need to sell, not waiting for the best “selling season” Keep in mind the selling period may be longer than you anticipate.
How do I find out how much I will actually make if I sell my home?
I can go over the numbers with you to estimate the size of the check you will take from the closing table.
Why should I buy a home warranty plan when I am about to sell my home?
A home warranty plan is not only a hedge against unexpected costly repairs but it is also a great marketing tool. It can give buyers one more reason to say “Yes”.
I talked with 3 different realtors and they gave me three very different selling prices. Which one should I choose?
This will come down to your judgment but you can ask how they determined their pricing. Resist the temptation to go with the highest price.
Should I price my home at a high level to “leave room for negotiation”?
Many people expect some negotiation but you want to be realistic about pricing. If it’s too high potential buyers will not even look at your home and local realtors will consider your price
My brother told me I could get a much higher price for my home. Should I take his advice?
What is your brother basing his estimate on? Just a gut feel? How well does he know the market? You should price based on fact not fantasy.
I need to set my home price at a level to get enough money to purchase my next home. Is that a good way to set the price?
The market will make the final determination on how much you sell your home for. How much you “need” or how much you paid for your home has no bearing on your sale price.
I want to set my price high and maybe I’ll get lucky and sell if for a higher price.
While its true there might be one person out there who will pay “above market” for your home, many buyers, especially if they are using a realtor, have a wealth of information to help them determine a realistic offer price.
If we receive two offers I will obviously select the one with the highest price. Is there anything else I need to consider?
You need to look at the overall quality of each offer. Obviously price is important, but so are other items such as amount of deposit, closing date, contingencies, and any other requirements.
If an offer comes in too low I won’t even look at it as that would be an insult.
Remember you always have three options when you receive an offer- accept it, reject it or counter it. Sometimes an offer that initially looks too low can be moved up to an agreeable point.
Isn’t it true I don’t need to hire a lawyer so I can save money?
In the state of Florida you are not required to have an attorney to buy or sell a home. I always recommend to my clients to hire an attorney so they have direct access to professional legal advice. Its best to hire one up front, before something goes wrong. If you wait until you are in a real mess and then call an attorney their fee will be much higher.
What will a lawyer do for me?
You should ask this when you interview them. Typically a lawyer can review the contract, write correspondence to the other side, and be present at the closing.
How much will a lawyer cost?
You should ask this up front. Typically the charge can be from $400 to $900, depending on the level of complication and time devotion.
Why do I need a home inspection?
You are not required to get a home inspection, but I recommend to all my clients to get one. As a lay person you can walk through a home and look for visible problems. But wouldn’t you want a trained professional to take a look under the hood-especially for things like the roof, AC and termites. If the inspector finds something big, you can walk away from the deal.
How much will an inspection cost?
That depends if it’s a condo or single family home and the square footage. A range would be between $200 to $500.
How do I choose a good home inspector?
Using the same principles that you would hire any other professional. Make sure you know exactly what they will inspect and what their fees are. I can help you with this.
When do I get an inspection?
After you have a signed contract.
What is the purpose of an appraisal?
A bank appraisal is used by the lender to ensure they are loaning an appropriate amount of money for a home. Remember banks never loose and they will always cover themselves.
Do I need to get an appraisal before I set my list price?
No you don’t. You can use this as a reference point if you want to, but it is not a requirement. An appraisal is simply an opinion of value.
I recently got an appraisal for my home. Does this mean I will sell my home for this price?
No. This is NOT market value. A home can ultimately sell for more or less than an appraised value. It will sell for what a ready, willing and able buyer will pay.
If I am buying a home do I need to get an appraisal?
If you are getting a loan, the lender will require one.
REALTORS AND REAL ESTATE COMPANIES
There are so many realtors and real estate companies out there. How do I pick one?
It’s not easy, but it is important who you choose. Realize you will be working closely with your realtor so select one that you trust and are confident will do a great job for you.
Is it important if the realtor has “livedin the neighborhood for 30 years”?
No. Market knowledge, professional experience, and sound judgment are important, but just existing does not count.
Is it important that a realtor has been “in the business” for 30 years?
That in and of itself is not a reason to select a realtor. If they tell you they have been in the business for 30 years ask them if they worked as a full time or part time realtor and what type of transactions have they closed.
Is it important that my realtor drives a Jaguar?
When your realtor is at the negotiation table qualities such as preparation, experience and professionalism will take you a lot farther than the model of car they drive.
Is it important that my realtor looks like a model?
In the end, you will be happy if your realtor makes you enough money so you can look like a model.
HOW REALTORS ARE COMPENSATED
I don’t like working with realtors because they are only working for a commission and don’t care about me.
Someone once said that the difference between a worker on salary and a worker on commission is that the one on salary runs away from you and the one on commission runs at you. Real estate is a very competitive business. You want to partner with a realtor who will hustle for you and fight to protect your interest. You want your realtor to be compensated on a commission basis so there is a lot of incentive to perform an excellent job.
How are realtors compensated?
When a home seller signs a listing agreement they agree to pay the listing agent a percentage of the sale price. If a buyers’ agent is involved, the listing agent will split their commission with that agent since they are bringing the buyer to the table. Then each agent
will split their check with their respective brokerage. After they subtract all their expense the remainder is profit. So what starts as a big pie gets sliced away fast.
THE CLOSING PROCESS
How do I set a closing date?
This is stated in the purchase and sale agreement. This is a point of negotiation between buyer and seller. Usually this is between 30 and 90 days.
Who chooses the closing agent?
Typically the buyer will choose the closing agent.
I have already hired an attorney. Can they do the closing for me?
Ask them. Many do have this capability.
Do I need to buy home owners insurance?
Why do I need to do a final walk through?
The purpose of a final walk through is to ensure the home is in a similar condition at closing as when you made the offer. You don’t want the seller to throw a party a week before closing and damage the house.