Buyers, especially those who are new to purchasing real estate in Florida, often have questions about what to expect from their buying experience. A few of the questions we are commonly asked include:
Why Do I Need a Pre-Approval?
A Pre-approval is necessary for several reasons. It allows the buyer to be sure how much home they can afford in the eyes of the lender, and to be reasonably certain that they will be able to close on a home in their pre-approved price range. It also assures the seller that the buyer’s offer is legitimate. Most importantly, with a pre-approval in hand, you have the confidence of knowing that when you do find the home you’ve been looking for, you are poised to act right away. It prevents you from losing out on the best opportunities.
Who Pays Closing Costs?
Who pays closing costs depends on the negotiations between the buyer and seller. Typically, at closing the buyer pays the down payment on the loan, plus some or all of the following:
- A credit report fee.
- A loan origination fee, which lenders charge for processing the loan paperwork for you.
- Buyer’s attorney’s fees.
- Charges for any inspection required or requested by the lender or you.
- Discount points, which are fees you pay in exchange for a lower interest rate.
- Appraisal fee.
- Title insurance to protect the lender from problems with title.
- Title search fees, which pay for a background check on the title to make sure there aren’t things such as unpaid mortgages or tax liens on the property.
- Deposits for property taxes and private mortgage insurance.
- Pest inspection fee.
- Recording fee.
- Underwriting fee.
Do I Need a Home Inspection?
In a word – YES! Purchasing a home without an inspection could leave you saddled with thousands of dollars in unexpected repairs.
What is a Home Inspection?
A home inspection is a thorough inspection of a home, performed by a professional inspector. The inspector looks at the whole home, and searches for any defects or problems – this includes structural and mechanical defects. The inspection usually takes place after a purchase contract has been signed and is paid for by the buyer at the time of the inspection.
What is a Contingency?
A contingency is any agreement between buyer and seller upon which the purchase and sale depends. For instance, an inspection contingency is an agreement within the purchase and sale stating that the buyer has the opportunity to inspect the property prior to purchase, and the seller has the opportunity to correct any problems the buyer identifies in the inspection. If the buyer and seller cannot agree on how to correct the problems found in the inspection, then the buyer can “walk away,” or rescind their offer, and decline to purchase the property.
Most purchase offers include two standard contingencies; financing and inspection.