Frequently Asked Questions

Escrow is where a neutral third party holds assets or money from one party and transfers those funds or assets when specific contractual requirements are met. An example would be an earnest money deposit that is refundable if the property does not pass inspection. If all of the contractual obligations and time frames are met by the buyer and the property does not pass inspection, the escrow agent will return the buyers earnest money deposit.

In Florida a seller of residential property is obligated to disclose to a buyer all facts known to a seller that materially and adversely affect the value of the Property being sold which are not readily observable by a buyer.

To clarify, there is a difference between an off market property that will trade hands and never go on the publicly available market (ie; wholesalers) and properties that are soon to be listed. Generally speaking, I have full access to all soon to be listed properties through my brokerage and also any properties that happen to come up during my interactions as an agent. As far as true off market properties, I have built several relationships with wholesalers over the years and they consistently send me off market properties on a weekly basis.
Be forewarned however, in my experience, most off market properties are not good deals, in 14 years of being an investor I have yet to buy one! These properties usually come with a myriad of problems from fire damage, to liens, to problems tenants that need court action. As such, these listings usually imply a sense of urgency or the would be buyer will miss out on the deal. Furthermore, there is usually a large, non-refundable deposit and a brief due diligence period. Proceed very carefully if you choose to go this route as it is not kind to the
newbie!

A contingency is a clause in a contract that states there are certain conditions that must be met by either the buyer or the seller in order to continue to the next step in the contract. A common example of a contingency in a real estate contract is the mortgage or financing contingency which allows the buyer to cancel the contract without penalty if they’re unable to obtain financing or a mortgage.

This is customary and is usually the first step in the buying process. A pre-
approval is written verification from a mortgage lender that you qualify for a
mortgage of a certain amount based on a review of your credit history, credit
score, income, and assets. This basically signifies to a potential seller that you can procure financing to buy their home. I have several competent lenders than can get this done for you.

This is a common situation that is usually handled with a contract contingency.
Other options may also be available.

Closing costs are fees associated with a real estate transaction such as mortgage fees, attorneys fees if applicable, title insurance, and government recording fees. Closing costs can vary from as little as 1% to more than 6%.

Property taxes vary from location to location and the most accurate way to
calculate them is to go to the source to find out exactly what the rate is. This is normally accomplished by going to the property appraiser’s website for the property in question and finding the total millage rate and multiplying that by the purchase price of the property in question and then adding any non-ad valorem assessments. Some property appraisers sites will have a convenient property tax calculator that you can use. When I guestimate property taxes I use the purchase price x 2%. This is a quick and rough method and it would look like this: Purchase price $400,000 x .02 = $8,000 for the first years taxes.

Generally speaking, a seller will have any costs incurred to prepare their home for sale such as cleaning, painting, upgrading, and landscaping. Other costs are any negotiated inspections or concessions, brokerage commissions, and applicable closing costs. As you can see, these costs can vary but for guestimation purposes I would use 6%-10% of the final sale price.

Generally speaking, any work that involves electrical, plumbing, HVAC, roofs, or structural changes (ie; taking out a wall) requires a permit. Cosmetic items like floors, backsplashes, countertops, and paint, do not require a permit. I want to get the most money for my home so I want to price it high and test the market.

In my experience, this tactic is only for a small percentage of sellers who don’t need or even really want to sell. Basically they’re going to list their home for very high and if someone is eventually willing to pay that price, they will move their stuff into storage and find whatever rental that they can, as fast as they can. If the deal falls through at the last minute they will have to reverse all of that and lose any money in deposits etc. For those folks who can, and are willing to do this, the extra money is worth the headache.

For average seller, this is not a good tactic. Most sellers want to sell their homes within a reasonable time frame and for the most money. When you price your home too high, you run the risk of it sitting on the market. When properties sit on the market for too long, would be buyers start to think that something is wrong with the home because, if it was so great (expensive), why hasn’t it sold yet? What usually follows are a series of price cuts. This tends to look even worse as the property was so overpriced, when the price comes down, it still doesn’t garner any serious attention. As it turns out, these homes usually take much longer to sell and end up selling for less than comparable homes.

One key factor to remember is, neither the homeowner, nor the agent gets to set the price of any given property, the market does. A good agent will be keenly aware of what the market value of your home is and will price it for the most amount of attention in the shortest period of time. The more buyers interested in your home, the better. It’s supply and demand!

Your agent is typically responsible for paying all of your homes marketing fees. This can include, professional photography, 3-D walkthroughs, online advertising, paid social media ads, flyers, brochures, mailers, and if applicable, a property specific website. Your agent will also pay for any signage and attention getters for open house showings along with any food or beverage that is made available during the open house or broker showings. Of course, your agent will also spend a considerable amount of their time during the course of the transaction.