Buying a house in Florida to live or invest will always be a good option, Florida is one of the most famous real estate destinations. If you are looking for the property of your dreams, you will surely find it in Florida. We tell you how to buy a house in Florida and not fail in the attempt. Keep reading and find out the requirements you will need.
Documents and Requirements
One piece of news is that buyers do not always need to handle many of the documents, especially after signing the purchase and sale agreement because, in this case, it will be your real estate agent who will handle most of them. In the United States, real estate agents are very professional and many of them are regulated, of course, occasionally they will have to sign some documents.
1.Pre-approval letter
The pre-approval letter is a document provided by the lender you have chosen. This document details the amount of the mortgage that the bank has pre-approved you for the purchase of your new home. Arguably, this is perhaps the first document you need before you even start looking at properties. Why? Because it's your ace up your sleeve to show sellers that you are a serious buyer and that you have the financial ability to close the deal.
Although some may equate this document with the pre-qualification, it is not the same thing. In order to pre-qualify, all you would be doing is providing a general overview of your finances to the lender, including your credit rating, income, debts and assets. You can usually complete this process online and get the letter in a few minutes. The problem? This letter doesn't prove that the lender verified the information.
In contrast, the pre-approval letter does confirm that the lender has verified - at least in part - the applicant's credit or financial information. This could result in a soft inquiry on your credit or perhaps even a hard inquiry because the institution you have chosen will closely scrutinize the accuracy of everything you have stated, including your W-2 forms and bank statements. Depending on the extent of the bank's review, the pre-approval letter will carry more or less weight with sellers and real estate agents.
Now, going a step beyond the traditional unverified pre-approval, some lenders and financial institutions - such as HomeLight Home Loans - take a complete financial snapshot of borrowers. In other words, they examine every piece of the puzzle to analyze all the data that's available 24 hours before the buyer's application. That could help you determine what type of home you qualify for.
However - and to be clear - any pre-approval letter you have, whether it's an upfront financial underwriting, pre-qualification or pre-approval; it's not considered a loan commitment. Remember that there are several scenarios in which the mortgage loan could fall through, even after you have this letter in your hands.
For example, if you incur more debt during the loan process, quit your job or something similar, you could put your mortgage at risk. Nevertheless, it is still a key document for buying a home.
Can a foreigner buy a house?
Yes. Just like the requirements for renting an apartment in the U.S., non-U.S. citizens can buy homes because this is not a requirement for buying and selling real estate. The only requirement you need is an identity document, such as a passport or ITIN number. In fact, foreigners can qualify for mortgages from banks that accept ITINs, although in this case they will ask for more requirements.
However, you should consider that foreign homeowners face more complicated tax situations than U.S. citizens. Therefore, in addition to learning how to buy a house in the USA without being a resident, it is important to know the rules of property taxes in the country.
2. A Loan Estimate
This form (which your lender is required by law to send you within three business days of receiving your loan application) is a brief but complete financial description of the type and possible terms of the loan you are applying for. Think of it as a sheet that will outline everything you would be committing to if you agree to the terms of the loan, such as:
Estimated interest rate
Monthly mortgage payment
Estimated closing costs
Estimated tax and insurance costs
Rate changes or scheduled payments
Possible penalties (including prepayment charges)
Remember: The loan estimate does not represent the amount you will actually be approved for by the bank or the likelihood of approval. At the time this document is sent to you, the lender may not yet have made a decision whether or not to approve your application.
In short, this three-page document is simply a snapshot of the terms of the loan the bank might offer you. Having it in your hands will be very useful, especially if you send your application to several lenders, since it will allow you to evaluate the conditions of each one and compare them with each other in order to choose the least expensive for you.
3. Letter of Offer to Purchase
This is an optional document that has unparalleled potential because it could help you get the house you want to buy. When a buyer writes an offer letter it is essentially a summary of praise for the sellers, as its main function is to explain to them why your family wants to buy the property.
Ideally, this letter should include a bit of personal information describing who you are, who your family is and why they love that house. This is arguably your best opportunity to personally connect with the seller or homeowner.
Recommendation: Keep your eyes peeled during the showing to see if you have any common interests with the seller. Then, you can mention this in the offer letter. Perhaps it could be a compliment on the garden and your interest in keeping it intact or perhaps expressing admiration for their collection of kitchen utensils from bygone eras.
In itself, the purpose of this letter is to connect you emotionally with the owner and try to tip the scales in your favor. This will make your offer stand out from any other offer, even if it is a little lower than the other potential buyers.
If the price you are offering is less than the advertised price, explain why you have made this decision. It may be because you are in a time of financial contingency or you feel that the property needs some major repairs.
4. Purchase and Sale Agreement
The purchase and sale agreement is a document signed by both the buyer and the seller in which both agree to formalize the purchase and to initiate the terms of the contract. Typically, this document is drafted by the seller's real estate agent and includes important information, such as the following:
Identification of the parties, i.e., buyer and seller.
Description and condition of the property
All of the terms and conditions of the contract
The rights and obligations of both parties
All items included in the sale, such as appliances and furnishings, for example
The amount of the earnest money deposit
Closing costs (itemized so you know who pays what)
Closing date of the contract
Condition of possession, i.e., when you'll receive the keys to the home
The signatures of the buyer and seller
Although you will not be involved in drafting this document, it is arguably the heart of the negotiation. The purchase agreement is one of the vital documents you need to buy a house.
5. Home Inspection Report
The home inspection report is a detailed list that includes the overall condition of the property and any visible damage. In itself, it evaluates:
The structure and foundation of the house
The exterior
Bathroom fixtures
Appliances
The roof
The plumbing
The chimney
HVAC
Electrical systems
A home inspection is one of the most frequently included due diligence in purchase and sale agreements because it allows the buyer to walk away from the transaction in case the house has major problems.
Therefore, it would give you your ticket out in case you don't want to take the risks, but also a good card you can play to renegotiate the terms and, of course, the price of the contract.
11. Property Survey
While not a requirement, ordering an additional property survey is a good idea because it could give you legal proof of what you are buying. This would be especially important if you are purchasing a home with any disputed assets, such as a beach or a road, for example.
As you can see, buying a house is overwhelming, but checking what documents you need is overwhelming as well. Fortunately, you will always have a specialist on your side to help you complete all these documents and requirements: your real estate agent.
Documents for the closing of the sale and purchase
The documents you must sign to transfer ownership of the home usually must first be signed by the seller and then given to the buyer for his or her signature. Residential real estate transaction documents typically include:
Closing Information.
The closing information shows you all the closing costs for both the buyer and the seller. Buyers are required by law to keep this form in their possession for at least three days prior to closing the transaction so that they can ask any necessary questions and resolve any concerns prior to signing.
Deeds (Deed)
The deeds (known as deeds) are documents that individually show the legal description of the property. Once signed, they must be recorded with the county to make the transfer of the property between the seller and the buyer official. When this document is recorded, anyone can do a title search to see who you got the legal title from.
Bill of Sale
Here you will be able to see all the property being transferred from the seller and buyer along with the home, such as furniture, appliances, lights, kitchen, water systems, security systems and more.
Seller's Affidavit
The seller is responsible for providing a notarized statement that they have the legal right to the property they are selling, as well as identifying all possible claims on title, such as outstanding leases, liens, disputes or sales contracts.
Abstract of Title
This document is called an "Abstract of Title" and is a summary of the public records relating to who may claim ownership of the property. An attorney should examine this document in detail to verify if there are any other parties who may claim ownership of the home.
Even if a seller makes a proper title search, the buyer should be liable for any claims made on the property. For this reason, it is a good idea to purchase title insurance when buying a home.
Tax Returns
As in other states, Florida collects taxes when property passes from one person to another. In Florida, this document is called a "documentary stamp tax" and is paid when the deeds are filed with the county. There will also be an apportionment contract that describes how much money the buyer will pay the seller to split the taxes on the property.
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