There is something for everyone in Brevard County, whether you are a first time home buyer, buying a secondary vacation home, investing in your future or buying home number five. Single family homes, condos, town homes, vacant land, investment properties and rentals all make up available property in the Space Coast. Here are some things that all buyers need to think of and consider in the home buying process.
1. Foreclosures vs. Short Sales – These buzzwords are all over the news and in the media but what exactly do these two terms mean. Well, here is a summary. A Short Sale is a home that is being sold at a price that is lower than what is owed on the mortgage. The home owner still owns the property and a buyer will first work with the home owner to agree on a purchase price and terms. However, then the bank or mortgage holder must approve the terms which can take some time. There are deals to be had for those that are patient but there can also be problems and pitfalls. These purchases can take anywhere from 4-7 months. Foreclosures are homes where the bank has already taken back ownership and the bank is the seller of the property. These transactions are very similar to a normal purchase and can take 1-2 months typically. Here the buyer deals directly with the bank or a representative of the bank to sell the property.
2. Understand Your Credit Score and Your Buying Power – Because of the state of the real estate market lending rules and programs are constantly changing. If you feel you are ready to buy a home, one of the first things you need to do is get pre-qualified for your purchase or be prepared to show how you will pay for the purchase. Even if you have been pre-qualified before, there may be different requirements or changes that you will have to consider. Also, you should understand what your various credit scores mean. There are FICO scores, Beacon scores and other scoring criteria that banks or lenders may consider and you should understand how your use of credit and spending habits affect these scores.
3. Down Payment and Escrow Funds – Be prepared to have funds ready to put down as a down payment on the home. If a buyer is using an FHA loan program, then the requirement is 3.5%. Most conventional loans will require 5-20% and some condos may require 20-40%. All of these terms will be specific to the loans that the buyer is going to obtain to purchase the property. Know the terms and be sure to inform your agent so that they can structure your offer properly. Also, when you submit an offer you will have to put money into an escrow account. Sometimes this is only 1% or $1,000. Some sellers will require more. It is negotiable and it is set aside to show that the buyer is not only serious but intends with good faith to purchase the home they are making an offer on.
4. Make an Offer – After you have been pre-qualified, your real estate professional can show you properties that best suit your buying needs and help you find the right property. Your agent will then try to seal the deal by getting you to write an offer to submit to the seller. There may be immediate acceptance or a counteroffer but the important thing is to get to a point where both parties agree in writing on a price and terms.
5. Offer is Accepted, Now What? – Now at this point there would be a countdown to closing but other things have to happen in the meantime. The buyer must usually make a full application to the bank or lender to get the loan officially set and approved. The buyer will usually want a home inspection to make sure that they are getting what they think they are buying. The buyer may also want to contract a termite inspection or mold inspection based on personal concerns or property conditions. Based on the contract, either the buyer or seller will have a title company or legal representation produce a clean and clear title so that the property can be transferred at closing. A survey of the property will have to be conducted and submitted to the company handling the closing. The buyer will also have to secure loan commitment prior to closing. Once all of these pieces are in place then usually the buyer is ready to close.
6. Closing – Be sure to bring whatever funds your lender or closing company tells you to bring in the form of certified funds or a cashier’s check. You will need to make sure that everyone that is on the deed and loan documents are present at the closing with picture identification. If someone cannot be present, make sure that the closing company is aware so that they can arrange for either mail away documents or they will need some sort of effective power of attorney to accept signatures and close. Finally be sure to arrange all utilities that you need to be turned on the day of closing about 2-3 days in advance so that those companies can do what they need to and you can easily move-in with services ready.
7. Questions? – Consult a Professional – Obviously this summary of information can not cover everything that will happen in a real estate transaction. There are many things to consider and tons of possible outcomes and problems that can occur in any transaction. If you have any concerns, you should contact a Realtor. You can contact me by submitting a comment or request through the contact me link or email me directly at jasonkoivu@yahoo.com.
Brevard County, Florida real estate is my specialty. I help people with homes in Cape Canaveral, Cocoa, Cocoa Beach, Indian Harbor Beach, Indiatlantic, Melbourne, Melbourne Beach, Merritt Island, Palm Bay, Port St. John, Rockledge, Satellite Beach, Suntree, Titusville and Viera. All areas are known collectively as cities in the Space Coast.