Here’s a quick blog on the typical process of buying a Miami Beach home for sale.
First of all, as busy Realtors, we make sure buyers have been pre-approved for a mortgage or if they have proof of substantial funds in the case of a cash sale.
The next step is previewing Miami Beach homes for sale. Most buyers will look at 5-15 homes before discovering a home that they wish to make an offer on.
The next step is a written contract offer signed by the buyers.
In Miami Beach and in Florida, real estate brokerages use a contract prepared by the Florida Bar Association of Attorneys and the Florida Association of Realtors.
This contract is referred to as a FAR-BAR contract.
Also by tradition, Miami Beach home buyers use an addendum to the home sales contract referred to as the “As-is with the right to inspect” clause.
This addendum clause gives the buyers 10 business days to inspect the house, and then decide if they would like to continue with the purchase of the property in its current condition or opt out of the contract.
Contract offers are presented in writing by email or fax after the buyers have initialed and signed each page.
Most often, buyers deposit 10% in the Coldwell Banker Escrow (holding) bank account with another 10% deposit due within 10 business days. Closing dates are written into the contract 5-6 weeks after the "execution date" (the date when all parties have signed and initialed all changes)
After receiving the initial offer, the seller can accept, reject or counter-offer the buyer’s initial bid on the home.
Then the buyer can accept, reject or counter-offer this new figure.
Typically, this negotiation will go back and forth 2-3 times.
If the offer/counter-offer process takes 5 or more moves, the buyer and seller can become impatient.
Each Miami Beach home buyer and seller has a different tolerance for negotiation.
After the buyer and seller agree to a price and sign all contract changes, the contract is officially "executed".
In Miami- Dade County, by tradition, the seller pays for a title search (a nominal fee).
The buyers choose the title company and pay for title insurance on the home.
Title insurance insures the buyer against future claims to the property (unknown heirs, etc.) Attorneys in Florida can also serve as title agents.
A title company insures the title of each property for a fee; "title insurance" and handles the official closing paperwork for the home sale. This final closing statement is known as a HUD-1 statement also known as the closing statement.
The HUD-1 is a form used by the settlement agent to itemize all charges for a real estate transaction. It gives each party a complete list of their incoming and outgoing funds.
Typically, a total of 20% deposit is held in the broker's escrow account after the inspection period has passed and the remainder of the cash is wired to the tile company just prior to the closing.
Most buyers and sellers never meet in person. “The closing” is attended by the title agent or attorney, the real estate agents, and the mortgage broker.
More often than not, the buyer will sign their paperwork at the title company, and the seller will sign at a different time during the day.
As many Miami Beach home buyes and sellers are not full-time residents, home closings are often “mail away” closings where the buyer and seller FedEx their paperwork to the title company the day before the closing.
I work for many out-of-state and foreign national clients who have purchased property in their home areas that use different procedures. I have learned that real estate procedures vary from country to country, state to state and even county to county.
Once again, feel free to call or email for more explanation of the Miami Beach home buying and selling process.