Billee Silva:
Hello, it’s Billee Silva with the Southwest Florida Realty show. Today, I’m going to talk about what to expect once you’re offer has been accepted.
So, after weeks or months of searching, you have finally found the home of your dreams and hopefully, your Realtor has negotiated a great deal for you. You have a closing date and there’s finally light at the end of the tunnel. However, the emotional roller coaster ride isn’t quite over, so tighten that seat belt! Although your Realtor should be paying close attention to important dates in the contract, it is always a good idea to be a savvy home buyer and make yourself aware of those dates also, because, at the end of the day, you’re the one who’s going to be responsible to adhering to those deadlines established in the contract.
Typically, in Florida, the contract is going to give you three business days to get your earnest money deposit to the closing agent which is typically a Title Company or Attorney. In Lee County Florida, it is customary for the seller to choose the Closing Agent and pay for the Owner’s Policy and Charges, but every county in Florida is different and like everything in Real Estate, it’s negotiable. However, it's important to note that even though the Seller pays for the owner’s policy, if you’re going to have a mortgage, you’ll be responsible for paying for the Buyer’s lender’s policy and charges for closing services related to the lender’s policy.
But back to the earnest money deposit, the earnest money deposit is a good faith deposit that goes towards your downpayment. If you’re using the Florida “AS-IS” Residential Contract for Sale and Purchase you’ve more than likely have a property inspection and the right to cancel contingency. The contract automatically defaults to 15 days after the effective date, but most sellers do not want to take their home off the market for that long and give a buyer an opportunity to back out of the contract so seven to ten days is more the norm. During this inspection contingency, you’re going to get a home inspection, insurance quotes and do your due diligence. If for any reason you determine the property is not acceptable, for example maybe the flood insurance came back a lot higher than you anticipated, or you found something alarming in the home inspection and the seller isn’t willing to address it because it is an “as-is” contract, you may terminate the contract by delivering written notice to the seller prior to the expiration of the inspection period and get your earnest money deposit back.
When calculating the number of days in the inspection period it’s calendar days, so you’ll need to count Saturdays, Sundays, and holidays. Unless the inspection period ends on a Saturday, Sunday, or holiday, then it will roll to the next business day. Also, during that first week of going under contract if you’re getting a mortgage, make sure you get all those documents your lender is requesting to them in a timely fashion so your lender can make the financing and appraisal terms. If you fail to use good faith and diligent effort to obtain loan approval during the loan approval period you will be considered in default under the terms of the contract.
While you’re working with your lender, your realtor and the Closing agent are also working diligently behind the scenes to get you to the closing table.
Unfortunately, closing costs are a necessary part of any real estate transaction for both sellers and buyers. They are the fees and charges associated with the purchase of a property. These fees can vary depending on the location of the property, the type of loan, and other factors. It is important for you as a buyer to understand the different types of fees associated with closing costs and to be prepared to pay them.
So, as a home buyer, what types of fees can you expect?
There are several types of fees that are included in closing costs. These fees can be broken down into two categories: lender fees and third-party fees. Lender fees are fees associated with obtaining a loan. Third-party fees are fees associated with services provided by third-party companies.
For example, your lender is going to have an application fee which is a fee charged by the lender to process the loan application.
They are also going to have an origination fee, which is a fee charged by the lender to originate the loan.
Discount points are an optional fee paid to the lender to lower the interest rate on the loan.
There will also more than likely be an appraisal fee which is a fee charged to have an appraiser evaluate the property to ensure it is worth the amount being borrowed.
And a Title fee to ensure that the title of the property is clear and transferable.
Your lender is going to pull your credit report, so there will be a credit report fee. They are also going to want you to have several months of homeowners insurance, and flood insurance if necessary, prepaid which will also become part of your closing costs.
Third-party fees are things like the home inspection. You’re going to want to have a home inspector evaluate the property to find any issues that need to be addressed during the inspection contingency period and they’re going to charge you a fee at the time of the home inspection.
There will be a Survey fee for a surveyor to survey the property to ensure the boundaries are correct.
You’ll also be responsible for a recording fee to record the sale with the county.
As a home buyer, another thing to be aware of is the Mortgage Insurance Premium. Mortgage insurance is a type of insurance that protects the lender in case the borrower defaults on the loan. If a home buyer is putting down less than 20% of the purchase price, they will likely have to pay for mortgage insurance. The mortgage insurance premium is usually a percentage of the loan amount and is paid monthly as part of the mortgage payment.
In summary, closing costs are an important part of any real estate transaction. As a home buyer, it is important that you are aware of the different types of fees associated with closing costs and be prepared to pay them. Understanding these costs can help home buyers budget and plan for the purchase of a property.
As always, thank you for listening, and remember to share my podcast with your friends and family. Have a great day!