Steps To Buying a Home in Florida

These are the steps to buying a home in Florida, as explained by a Florida REALTOR® and retired Court Reporter. Each state is different. I am often asked what is involved in buying a home. These are the steps to buying a property in Florida.

FIRST STEP IN BUYING A HOME IN FLORIDA |

PRE-APPROVAL OR PROOF OF FUNDS

Obtaining a pre-approval or having proof of funds is the first step towards buying a home in Florida.

I know you’re busy looking at houses online, but that’s not really the place to start. Getting pre-approved or having proof of funds is the first step in buying a home.

If you’re planning to take a mortgage, you must get pre-approved. Why? For several reasons.

First, it tells us how much house you can afford. You may be thinking, $ 600,000 is what I want to spend only to find out you may be pre-approved for $ 550,000 or even $ 650,000. It may make a difference in the type of home you’re looking for. We can look at houses all day long, but if we don’t know you’re qualified, what’s the point?

Second, if you find a house and want to submit an offer, no one is going look at it without a preapproval. You may know you’re qualified, but the Sellers don’t.

For proof of funds, you can get a letter from your bank or a financial person or just screenshot an account showing your name, the date and a balance that will cover the transaction.

BUYER REPRESENTATION AGREEMENT

On August 17, 2024, real estate changed nationwide. You must have a Showing Agreement or Exclusive Buyer Representation Agreement in place before we can go see a home.

Why?

It’s a long story, but it goes back to a court case in the mid-west called Sitzer Burnett. You can google it. The outcome was that this is the way all buyer agents must operate from here on, and that compensation was also removed from the MLS. Everywhere in the US.

Do I like using these agreements? Honestly, no. But I have no choice.

I am an Accredited Buyer’s Representative, ABR, and have been since 2008 through REBAC.

Should you go direct to the listing agent or the builder for new construction? The honest answer is no.

Why not?

Because an agent can really only represent the true interests of one party, the buyer or the seller.

Think about it: How can I get the seller the highest price for their house and, at the same time, get the best deal for the buyer?

Take it one step further to the builder. Same thing.

It’s simple – they can’t.

Ask me about my buyer and seller stories! I’ve been doing a long time.

PRE APPROVAL OR PROOF OF FUNDS

When we find a house and you decide to submit an offer, that pre-approval or proof of funds must accompany your offer.

In Florida, REALTORS® write the contracts. We have fill-in-the-blank contracts written by the Florida Bar and Florida Association of REALTORS®.

An agent still has to know what they’re doing, because a contract is still a contract. My background as a Court Reporter comes in very handy!

It happened where a certain property had come up on a Saturday night at 9:00 PM. Because the Buyers had been pre-approved and were ready to go, I wrote an offer which was submitted and accepted before the condo was ever shown the following morning. It happens!

Without a pre-approval, Seller’s Agents’ will throw the contracts back to Buyer’s Agents’ and say, “Show me the money!” In today’s world, Sellers, and even builders, do not want to show houses to people who have not been pre-approved.

You may have great credit and a score of over 800, but the Seller doesn’t know this. So, pre-approval or Proof of Funds is always the first step towards buying a home in Florida.

If you’re planning to pay cash, then Proof of Funds is necessary. A bank statement showing your name, the date and enough money to cover the purchase is required. You may X out your account number; they don’t need that information. They just want to know you’re qualified to buy the home.

AREA YOU WANT TO LIVE | AN IMPORTANT STEP IN BUYING A HOME

You must decide on an area you want to live.

When I speak to people, they are often considering different areas. Someone told them this or that so they’re looking.

This is not the way to buy a home. You’re all over the place. Do some research first, if needed. Then narrow it down to the area you want to live.

NEEDS AND WANTS

What are you needs and wants?

Do you need schools? Do you have pets? Do you want a pool? 55+ community? Single story or 2-story home? Condo downtown with a good walk score? Townhouse? Villa?

Pet-friendly gated community in Boca Raton?

Pet-friendly 55+ active adult community in Delray Beach or Boynton Beach?

Do you want a private pool or will one in the community be sufficient? Lots of things to consider.

I’ve had instances where people have come for a house only to buy a condo and vice versa, but most people know what they want. It’s okay if you don’t. We can talk it through, and I will help you.

BUILDING VS BUYING A RESALE

Thinking of building a home or condo? Should you hire a buyer’s agent for new construction? Buyer Beware – click on the link to find out why you need a buyer’s agent even for a new build or new construction.

Are you planning to downsize? Perhaps even retire? You may want to consider one of our pet friendly 55+ communities in Delray Beach or Boynton Beach, FL.

South Palm Beach County, specifically Delray Beach, Boynton Beach and Lake Worth, are the heart and soul of the active-adult communities for both resales and new construction. These are not the active adult communities of your parents or grandparents. These are built for baby boomers and run from $ 50,000 to $ 3M.

This is south Florida; we’re on the east coast with the Atlantic Ocean just minutes away. Are you a beach person? Are you dreaming of a pet-friendly condo in Boca Raton, Highland Beach FL or the surrounding beach areas. If you love the beach, you may be thinking you’d like to live near sand and water. I don’t blame you!

As you can see, you have choices. I can help you figure it out, but only after you decide on an area you want to live in.

LET’S LOOK AT HOMES

Once you have your pre-approval or proof of funds in hand, now it’s time to look at homes!

We’ll go through your wants, desires, must haves, would likes, what is negotiable, possibly willing to give up, etc. We’ll go through each of the homes, and I’ll answer any questions you may have. If I don’t have the answer, I will get you the answer.

If you have pets, now is the time to look at buildings or communities that will accept your pets. You already know some communities have pet restrictions. We’ve been over that many times!

This is an exciting time. You’ve now been pre-approved or have your proof of funds in hand, and we’re ready to go!

MAKING AN OFFER IS THE NEXT STEP

Making an offer is the next step involved in buying a home in Florida. People from states who use attorneys are often confused about this. There is no need to worry about this step. Allow me to explain.

Florida does not require you to use an attorney to close on a home; however, in my opinion, it is always a good idea. You are spending a lot of money. Now is not the time to be penny wise and dollar foolish, as the saying goes. Attorney Review comes after we have an accepted offer and a house has gone under contract in Florida.

Hold on – I’m getting to the rest!

99.9% of homes in Florida are sold As-Is with the Right to Inspect. We use a standard fill-in-the-blank contract written by the Florida Bar and Florida Association of REALTORS®. Known as the FARBAR AS-IS Contract, we add any necessary Addendums we may need. For example, if it’s a condo we’re submitting an offer on, we need a Condo Rider. Homeowner’s Association – a Homeowner’s Association Rider. Attorney Review – we use Buyer and Seller Attorney Review Addendums. And so it goes.

Full Disclosure: This is being explained to you as a Florida REALTOR®. I am not an attorney.

AS-IS with the Right to Inspect means you, the Buyer, has the ability to put a home under contract for a specified period of time know as the Inspection Period. If issues are found on Inspection, or you decide for any reason you don’t want the home, you may cancel it during the Inspection Period with no penalty. No dollar amount is required You may cancel for any reason. You will not lose your first deposit. If you cancel the contract within the AS-IS Inspection Period, your deposit will be refunded to you.

AS-IS with the Right to Inspect also means the Seller has the right not to make any repairs. While you, the Buyer, has the right to walk away from a home, the state of Florida gives the Seller the right not to make any repairs. For example, let’s say a house goes under contract. You do an inspection and find toxic mold. The likelihood is you’re probably going to walk away and look for another home. So it can benefit both Buyer and Seller.

However, when we have a Buyer who wants to buy and a Seller who wants to sell, oftentimes (but not always) issues can be worked out either for repairs to be made or a credit to be given at closing.

An offer in Florida is written up like a contract. I know this is different than in other states, but that’s how it is. If the offer is not accepted, it goes in the trash. If an offer is accepted, the offer then becomes the contract. This brings me to my next point.

ITEMS NEEDED TO MAKE AN OFFER ON A HOME IN FLORIDA

In order for me to write an offer, I need a few things from you, the Buyer. I need to know the names the home is going in. I need to know a closing date that works for you. And I need to know about your deposits, because it is called for to be filled in on the offer.

Florida residential contracts call for two deposits. The first deposit is due within 3 days of an accepted offer. The second deposit is due when you know you are going forward with the home, but before the end of your AS-IS Inspection Period. Can you combine the deposits into one? Absolutely!

CALENDAR DAYS

Florida FARBAR AS-IS Contracts are calculated in calendar days – not business days. This is extremely important to understand, because Florida is what is known as “time is of the essence.” Saturdays and Sundays do count. You can read more about contracts here from Florida REALTORS®.

From a REALTOR’S® perspective, what this means is that, other than the time for Acceptance of your Offer and the Effective Date (more on that in a bit), everything happens on the date that is on the contract – unless Buyer and Seller agree otherwise. If it says closing July 1, the home is closing on July 1, unless Buyer and Seller agree otherwise. Both parties must agree.

In other words, a contract can be negotiated and accepted on any day, including Saturday and Sunday. The contract is computed in calendar days except for any time periods (other than Acceptance and Effective Date) that fall on a Saturday, Sunday or national holiday which would extend to 5:00 PM of the following business day. Make sense? It can be confusing at first. If you don’t understand, Ask Me!

All offers written by me can be e-signed on your phone, tablet or computer. Since I will have your Pre-Approval or Proof of Funds, your offer is ready to be submitted to the Seller’s Agent.

NEGOTIATIONS ARE THE NEXT STEP IN BUYING A HOME IN FLORIDA

Once your offer is written, it will be presented to Seller’s Agent along with your pre-approval and/or proof of funds. Now is the time for negotiations. Any number of things may be negotiated between Buyer and Seller – price, closing date, number of days for inspection, or any item of importance to either of the parties.

ACCEPTED OFFER

Congratulations! We now have an accepted offer and a valid contract.

The date the last signature and/or initial is put on the offer or counter-offer and it is delivered back is known as the Effective Date. Please remember that because the Effective Date is an important step in buying a home in Florida.

Everything runs off of the Effective Date in a Florida residential real estate sale. The Effective Date is counted as Day Zero. Then we start counting. The next day is Day 1 and so on.

INSPECTION PERIOD & RIGHT TO CANCEL

On the contract is specified X number of days for Inspection and Right to Cancel. The default on the contract is 15 days. That mean the Buyer must complete their due diligence and any inspections they wish to have within those 15 days.

Depending on the type of market we are in, many offers are shortened to a 10-day Inspection Period or, at times, even less. We can talk about it. This can also be negotiated between Buyer and Seller to accommodate their needs.

If you decide you are going forward with the home, your second deposit is due in the escrow agent’s office and received by the other party on or before the end of your Inspection Period.

If any issues are discovered during inspection, we will try to negotiate with the Seller to work them out. Mind you, there are always issues – even on new homes. Trust me on this, I have personally built two homes and had a punch list pages long!

If you are paying cash, everything happens during the Inspection Period. Once your Inspection Period is over, there are no more contingencies. it will then get quiet until just prior to closing.

MORTGAGES

If you are financing this home, you must make your application for a mortgage within 5 days of the Effective Date. Remember the Effective Date? You’ve already been pre-approved so the process has been started.

APPRAISAL CONTINGENCY

The FARBAR AS-IS Contract has an appraisal contingency. What happens if the house doesn’t appraise?

If you are taking a loan, an appraisal will be done. If the house does not appraise, the Buyer may pay the difference, or the Seller may pay the difference, or the Buyer and Seller may split the difference, or the contract may be cancelled with the deposit being returned to the Buyer.

CLEAR TO CLOSE

The next step in buying a home in Florida is getting a Clear to Close. We’re nearing the finish line now. If you’re paying cash, we’re already there. If you’re taking a loan, we are waiting for a Clear to Close from your lender, meaning we are ready to schedule the closing.

WALK THRU

A walk thru is done just prior to closing. It can be done the day before or the day of. Except for “ordinary wear and tear.” the house must be must be maintained in the same condition as when the Buyer saw it at the Inspection.

CLOSING | LAST STEP IN BUYING A HOME IN FLORIDA

Closing is the actual transfer of the home from Seller to Buyer.

People often ask, Do I have to be there for closing? The answer is no. You do not have to physically be here for this step. Today, closing agents use FedEx, e-sign and/or Mobile Closers for you to sign. The title company will discuss this with you.

There are no real sit-down closings around a table any longer. Covid did away with that. Buyers and Sellers sign separately. Cash closings are often done by email. If you have a mortgage, you’ll have to sign somewhere or by mobile closer, but it will get done. Not to worry!

And that’s it!

CONGRATULATIONS

Congratulations! You have now closed on your new Florida home!

HOMESTEAD AFTER BUYING A HOME IN FLORIDA

Florida is a homestead state. Obviously, you cannot homestead a property until you own it. There are steps involved in homesteading a property in Florida. You should consult your tax professional, unless you plan to live here full time. You can read about it here on the Property Appraiser‘s website.

IN SUMMARY

The steps involved in a real estate transaction in Florida may be vastly different than your state, but this is how the process works here. And it works!

It may seem overwhelming at first, but it’s not if you have a good Buyer’s Agent to guide you through each step. It’s my job to make the process as easy as possible for you.

You can read more about others I have helped here.

Steps To Buying a Home in Florida