Information for our Canadian Home Buyers
You have heard it over and over again: “Now is the best time to buy an investment property or second home in Florida.” Can’t you hear that anymore? You are not the only one.
But who is saying such nonsense? Well, that was most likely another one of these self-proclaimed pundits who is spreading his wisdom. It seems to be the nature of the business that every day a new expert arises who’s been there, done it, got the T-shirt. Believe us: Nobody can predict the future (our opinion) – only you can decide for yourself if it is the right moment for You to buy a home in Florida.
The Canadian Dollar is not in best shape
The Canadian Dollar is, unfortunately, ailing while the prices of homes are still rising in Florida. That doesn’t balance the problem, right? At this point, nobody knows whether or when it will turn into the Canadian Dollar’s favor again.
Right now, the naked truth is: It is not the best time to sink your money into Florida Real Estate when you want or need to make a profit. It is only the second best time unless you have a stellar idea what you want to do.
If you want to spend time in a warm climate – go for it. If you have the money and time to spend some quality time in the sun – go for it. If you are running out of time (we are all getting older, maybe you are not) – it is always an excellent opportunity to buy a property in paradise. However, you are not making money – you are enjoying your money! Does that make sense?
Real Estate Investment
If you want to make money, then you are “investing.” That is a different breed of real estate. The “make money fast thing” does not work in a real estate market like the one we have now. Chances that you buy a single family home now and flip it six months later and double the price is slim. Can you purchase a fixer-upper and do the trick? If you know what you are doing and if you are handy or know a bunch of people who can help you, it might work.
You want a home for your enjoyment
We have met quite a few individuals who said: “I should have bought earlier,” or “I should have enjoyed my life better, now I am not in the position to do that anymore…” Well, that is sad, but a lot of people think that they will live forever. We don’t know how they come up with that concept, but it is not necessarily true. Investing and making money is one thing, enjoying your short life on this beautiful planet is another one.
Bills, bills, and more bills…
Unfortunately, the disparity of the Canadian/US-Dollar does not only affect the purchasing power. Everybody knows that buying a property is usually the fun part. The monthly bills for maintenance, fees and taxes and insurance are typically not too funny anymore. Especially when your currency took a hit, and you have to come up with 20% more out of your pocket.
What can you do about it?
To be honest with you – the answer is “not a lot.” There is only one solution to that problem: buy a small, neat home in a community that does not have all the bells and whistles possible. You still have to pay bills, although your intention was to enjoy the sun, right? Look at it his way: If you want to play golf, you will find plenty of public places where you can play for a few bucks. Don’t make a mistake and pay year-round for golf course maintenance while you are using your home only for a few weeks or months of the year.
Do you play tennis? Fine. The community with tennis courts is perfect for you, otherwise, stay clear those extra costs. Do you like to go fishing? Keep your boat in a marina and do not pay a steep premium for a waterfront lot (+flood insurance, +high hazard insurance) unless the premium you pay is no issue for you.
When your budget gets tight – get creative. Live your dream and not your nightmare. We can help you finding affordable places – give us a call and let us talk. 941-460-8832 is our easy number.
Buying a Home in Florida – how does it work? A step by step guide.
You found a house you’d like to buy. We will put together a purchase and sales agreement, which contains all the terms of the deal. That is seller’s and purchasers’ name/addresses, property’s legal description, purchase price, down payment, financing arrangements, closing date, inspection period and contingencies.). Together with the written offer the buyer submits a check (called “consideration”) to make the offer “stronger.” The sum of the payment depends on the sales price, and the title company will put in their escrow account.
Seller agrees or comes back with a counteroffer. Buyer agrees or …counters again. Eventually, both parties will accept or walk away. Deal over! But hopefully, after all that “agreeing” the deal will be in dry cloth.
The seller must disclose any problems with the house he knows. But what about the stuff he doesn’t know? Hiring a licensed home inspector is always worth the $400 he charges. He will check for common defects (roof defects, A/C problems, plumbing problems and so forth). He will put together a lengthy report about all the minor and major problems. Depending on the contract, both, buyer or seller can back out if the repairs are too costly. Usually, a termite/pest inspection is also a sound investment in Florida (especially for wood frame houses).
Title Company or Real Estate Attorney
The title company or real estate attorney is preparing the paperwork. When you buy a house, you, the buyer, also purchases a title insurance. A title search is a review of public records, looking for any problems with the title’s validity before closing. The title insurance goes one step further and insures against loss due to certain title defects that didn’t turn up during the title search. Typical title issues are related to easements and liens.
Financing doesn’t necessarily make it easier
If financing is involved, the title company will communicate with the bank. They are going to receive the loan documents and the necessary payments from the bank. When a bank is involved, she will also require an appraisal and most likely a survey (unless the seller has still a valid one). Needless to say that the bank will keep the buyer busy with all the loan requirements (credit reports, income ad asset statements).
Before the closing takes place, the customer needs to purchase a home insurance and in some locations a flood insurance as well. If the buyer pays all cash, he is his more in control. He can decide if he wants to insure his home or not. If financing is involved, the banker is always the boss. They want to see home insurance. Do American Banks finance Canadians? Yes, they do. Do Canadian Banks finance homes in Florida? RCB did in the past.
Note: When a hurricane is on the way no insurance company will underwrite new policies. They will delay the cloin until the storm is through.
Don’t end up sitting “High and Dry.”
Now it is time to make arrangements with Florida Power and Light, the water – and cable company.
Before closing, the buyer will get a “Good Faith Estimate,” explaining all the transaction fees and taxes (including the charges for the loan). If everything is accepted, the signing of the documents (Closing) will take place.
The closing takes place (If one or both parties are out-of-town this can be done as a “mail away”). The buyer has to bring the cash amount. If he hasn’t already wired it to the title company, he may bring a cashier’s check. Nowadays, title companies prefer that the purchaser wires larger amounts of mone. However, the title company will give instructions. They all do it differently. Don’t forget to bring a photo ID to closing. Otherwise, it is not going to happen.
Last Step of a long Process
The buyer gets the keys and a copy of all documents at closing and is now a proud owner of a slice of land in paradise. Beautiful!
Are you interested in a piece of paradise? Don’t hesitate to contact us below.