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Florida (Buying Process)

Things you need to know, before and after you sign a contract, when purchasing a newly built home in Florida.

Initial Deposit

To “lock” or guarantee a price, builders expect an initial deposit from buyers, usually between $2000 and $5000. This deposit also shows the builder that you are a serious buyer and not just shopping.  Deposits should always arrive in the builder’s account on the date to which you agreed. Do not expect a builder to hold a price or building lot for you without this deposit.

Down Payment

The builder will then send you a purchase contract. Usually there will be a specific period of time, say 30 days, in which the builder will assume you are examining the contract and deciding to go forward. You will be asked to sign the contract, and return it with the required Down Payment, between 10% and 20% of the purchase price. The initial deposit is included in this amount. Again, returning the contract within the specified time is very important. The balance of the purchase price is due at closing, once the house is built.

Other Funds Required

If you are paying cash for the house, you should put aside up to 3% of the purchase price for closing costs required of the buyer. If you are acquiring a mortgage, put aside 5% of the purchase price for closing. These numbers might be a little high, but better to have too much, rather than too little.

Closing Costs

There are four categories of closing costs.

• Fees to the mortgage company will vary from lender to lender and by the type of mortgage you secure.
• Government taxes, on the deed and on the mortgage.
• Title Insurance and admin istration fees charged by the Title Company that arranges the closing.
• Prepaid items, such as hazard insurance, homeowner association dues, escrow accounts and cash on hand as proof of your ability to sustain the mortgage payments.

Good Faith Estimate

Your mortgage lender is required by law to provide for you a good faith estimate of closing costs. This document should follow your loan application in a few days. It is not a legal document and it is not a guarantee of actual costs. We strongly suggest you use the percentage formula we outlined above.

60 Days Before Closing

Other Things You Need To Do:

• Contract with a management company to look after your house, arrange for all utilities to be turned on in your name (the builder will not keep water and electricity running for more than a few days after closing) and if an investment property, find renters for you. We can recommend a reliable management company but you are free to choose your own.

• If you are a foreign national, set up a checking account in an American Bank. Closings are always done in US dollars.

Furniture

Many builders include furniture packages in their contract price, but not all. If you have time, you can purchase furniture yourself, or again, we can recommend a reliable home decorator to furnish the home completely on your behalf.

The Closing Date

We will be sending you progress pictures on a regular basis, so you will know that your house is nearing completion. The builder will contact you with a closing date about 30 to 60 days before completion of the house. Builders take these dates very seriously and it is very difficult to get them to delay closing. They may charge you a daily penalty for every day you delay closing and we have even seen houses put back on the market because the buyers were not ready to close on time. We urge you to get all necessary funds in your US account well before the anticipated closing date. If you cannot be here in person, we will do the pre-closing walk-through of the house on your behalf.