6 Tips That Every Home Buyer Must Know Before They Buy!

1. Be a Pre-Approved Buyer. A pre-approved buyer always has the advantage in an offer situation.  Becoming pre-approved is very easy:  you complete your loan application with a credit check prior to beginning your home search process.  Pre-approval means that you have actually been approved for the purchase by the lender, which gives you the edge in home purchase negotiating.

2. Prove that you are a Serious Buyer. The best way to accomplish this is with strong earnest money.  This might mean that you put 2% or more down to get the seller’s attention.

3. Don’t Go Crazy. Even in a hot market, be cool and calculated with your decisions.  Your home purchase may be your single largest investment.  It is important to make sure that you get the best deal possible.  Choose a realtor that will always be honest with you, even if it means they may not tell you what you’re hoping to hear.

4. Keep Your Offer Simple and Clean. Make sure your contract to purchase is simple, clean and not bogged down with unnecessary contingencies. Keep the time frame of responses to a minimum.  The cleaner your offer, the more interested the seller will become.  This may help you purchase the property at the best price.

5. Buyer’s Closing Costs. When closing a sale of real property, there will be closing costs in addition to the purchase price. The principal costs you may incur are:

• • Mortgage Fees & Expenses - These may include an application fee, credit report fee, appraisal fee, document preparation fee, points, private mortgage insurance, recording fees, etc. The lender is required to provide you with a detailed Good Faith Estimate of Closing Costs shortly after you apply for a loan.
  • Home Inspection Fee – Optional, but strongly recommended. This is paid at the time of the inspection.
  • Termite Inspection – This is separate from the Home Inspection. Optional, but recommended.
  • Homeowners Insurance Policy
  • Flood Insurance Policy (If required). Depending on the elevation level and the flood zone, your lender may require flood insurance.
  • Title Company fees for closing services.
  • Property Survey
  • Flood Elevation Survey
  • Broker Transaction Fee, sometimes referred to as an Administrative Fee or Florida Compliance Fee
  • Lender Title Insurance
  • Documentary Stamps on the Mortgage ($0.35 per $100 of Mortgage Amount)
  • Intangible Tax on the Mortgage ($0.20 per $100 of Mortgage Amount)
  • Proration of Maintenance fees
  • Proration of HOA/Condo fees
  • Proration of Real Property Taxes (In Lee County, property taxes are prorated at closing and typically result in a credit to the buyer).

6. You Can’t Rely on the Tax Bill. The total tax bill listed on the MLS is what the current owners paid.  The sellers may or may not have homestead exemption.
   1. What Is A Homestead Exemption?
      1. Homestead Exemption is a benefit of up to a $50,000 exemption removed from the assessed value of your property. It is granted to those individuals who possess title to real property and are bona fide Florida residents living in the home and making it their permanent residence as of January 1^st of the year they are applying for homestead. 
   2. Additional Exemptions include:
      1. Senior Exemption: All residents of Lee County, 65 years of age or older as of January 1^st, whose annual adjusted gross household income does not exceed the mandated income limitation may qualify for an additional exemption.
      2. $500 Widow/Widower’s Exemption: You must be a widow or widower prior to January 1st of the tax year and provide proof of your spouse’s death.
      3. $500 Disability Exemption: Florida residents who provide proof of total permanent disability or proof of legal blindness may qualify.
   3. How is the tax rate calculated? The actual tax rate used to calculate property taxes is set every year by the various taxing authorities in Lee County. Historically tax rates have fluctuated within a fairly narrow range. The sales price of an individual property does not directly affect the assessed value used to calculate taxes. Rather, the sales of like properties throughout the year as well as other statistical and valuation methods are used to create the assessed value.
   4. How can you estimate what your property taxes might be? The actual tax amount may be more or less depending on a variety of factors including changes to the millage (tax) rate and the inclusion of non-ad valorem assessments (e.g. garbage, sewer etc.), but is based upon 90% of the sales price and the current ad valorem millage rate applied to the property.

Buying a home ranks as one of life’s most exciting experiences.  However, under that feeling of excitement lies many other emotions, such as confusion and anxiety.  Buying a home can be intimidating even for the most seasoned home purchaser. The first step to reducing the anxiety of the home-buying process is to have a plan in place.  You will feel more confident about your home-buying journey when you understand what is required of you and who is involved in the process. #homebuying101 #househunting #Realtors #BuyersAgent #homebuyingtips