For most people, owning a home is the “American dream” and according to a Pew Research Center survey, more than 2,000 people were asked whether buying a home was the “best long-term investment a person can make.” 81% of respondents agreed with that statement.
That being said, there many steps to consider when buying a home in Jacksonville Florida and most buyers conduct a lot of research online before ever even contacting a Realtor®. Buyers want and need a knowledgeable and experienced professional that understands the Jacksonville area real estate market. They also want someone they can work with; who will listen to their wants and needs; provide expert advice; and be their guide and mentor throughout the buying process.
Take this printable “Home Buying Checklist“ along with you whenever you go shopping to buy a home. It will help you evaluate the neighborhoods and assess the availability and condition of various features of up to three homes in a side-by-side home comparison.
1). Decide on How Much you Want to Spend – If you have decided that home ownership is right for you, the next step is deciding how much home you can afford. Typically, most lenders suggest that you spend no more than 28% of your monthly income on a mortgage. Keep in mind, in addition to the mortgage costs, you will have to pay the closing costs and legal fees, which are usually 2% to 3% of the house price. Also, don’t forget moving fees and labor, and any fixes that you might have to make to the house upon moving in, plus monthly maintenance fees if you’re moving into a condo or planned community. When you have figured out your price range, take a look at the market and the issues that matter to you. Research school districts, crime statistics, impending construction or anything that could decrease or increase the value of a home. Look at the surrounding area to see if it’s a place in which you see yourself and family.
2). Check Your Credit score - Your credit score is one of the main factors your mortgage lender will use to determine whether you qualify for financing. That being said, every lender uses different methods to determine your credit worthiness. So, in some cases, a minimum score is difficult to determine for conventional loans. In other cases, especially when loans are underwritten or insured by government organizations, there are minimum credit scores to qualify. The score your lender will accept for a conventional loan can be determined by many factors, including your payment history, your salary history, your current wage, your available credit, the scores other lenders are accepting and the current economic climate.
3). Shop for a Lender – According to Zillow, “Observe the way the lender responds to you when you first contact him or her. Are they prompt to respond to your initial contact? Are they friendly and courteous? Do they honor their quote that you saw online or in an offline ad? Are they willing to explain things to you or educate you about different choices? Do they proactively discuss the timeline of the loan (estimated closing date, when to lock the rate)? Do they discuss when/how rates will change? When you have figured out your price range, take a look at the market and the issues that matter to you. Research school districts, crime statistics, impending construction or anything that could decrease or increase the value of a home. Look at the surrounding area to see if it’s a place in which you see yourself and family.”
4). Obtain a loan Pre-approval – “Pre-approval” means that you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a pre-approval letter, which shows your borrowing power. You can visit as many lenders as you like and get several pre-approvals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports.
5). Hire a Reputable Full Time Realtor® - Look for a professional Realtor® that can help you negotiate the ins-and-outs of selling your Jacksonville Florida home? We can help you with all the complexities of a successful transaction, which are many. “When you deal with someone who is going to help you buy or sell a piece of property, you’d better find someone that knows what they’re doing,” says Donald Brenner, professor emeritus at American University.” We are an experienced, professional and dedicated team of Jacksonville Florida real estate agents with strong communication skills who will ensure that you receive the best possible real estate transaction.
6). Are there CDD Fees? A CDD fee is a Community Development District fee imposed by the developer of a neighborhood or subdivision to finance the cost of amenities in a neighborhood. These amenities and community improvements would not be provided without funding from CDD fees. These fees vary by development and are based on the amount of the loan taken from the county divided by the number of homes responsible for paying back the loan. These fees are most often found in communities built after 2003. Payments for CDD fees ARE tax deductible, like your property taxes.
7). Preview Homes - When a buyer is ready to look at homes, Jacksonville real estate agents are eager to show them. Most often, the buyer will select one or two homes to look at and the agent will pull up a supplemental list of similarly priced homes to show. But price isn’t everything. The problem is the buyer might not like any of the homes on the agent’s list. If the answer to both of those questions is no, you might be wasting your time. Serious home buyers do not have endless amounts of time to spend looking at unsuitable homes.
8). Make an Offer – According to Zillow, “In most areas, you will not be presenting your offer directly to the seller in person. So your goal when your agent presents your offer is to give the sellers few reasons to say no and many to say yes One effective technique, called “loading,” is to include with your offer a separate statement that does two things. First, it concisely recaps information gleaned from your CMA. This lets the sellers know that you know their home is not the only fish in the sea. Second, it gives the sellers all the reasons they should promptly say yes to your offer as written. Accepting a lower offer is emotionally unpleasant, and your letter should ease them through that process.”
9). Home Inspections - When buying a Jacksonville Florida home, you will need a home inspection which is a limited, non-invasive examination of the condition of a home conducted by a home inspector trained and certified to perform such inspections. The home inspector will describe the condition of the home at the time of inspection. Keep in mind that a professional home inspection is an examination of the current condition of a house and is not an inspection to verify compliance with appropriate codes. Home inspections usually take place up to a week before closing and generally allow buyers the first opportunity to inspect their new home. The inspection is to ensure that all terms of the contract have been met, and that major items are in working order.
10). Acquire Home insurance - Homeowners’ insurance is a necessity and something every property should have. If you have a mortgage, your lender will require coverage. Not all insurance coverage is alike. Policies and protections differ, and so do costs. In essence, you want the most protection for the least number of dollars. Homeowners’ insurance comes in standardized packages. The most basic form, HO-1, offers protections against such things as fire, theft, and certain types of liability. HO-2 is more comprehensive and includes protection against damage from broken pipes, the weight of ice and snow, and broken hot water heaters. HO-3 gives even more and includes just about everything and excludes only earth-shaking events such as earthquakes, floods, nuclear accidents, and wars.
What to bring to a closing:
1. All buyers are to show up for closing to sign the documents unless it’s a mail away closing or one of the buyers has a power of attorney for the other, in that case the person with power of attorney will need to show up and sign
2. Each buyer needs to bring two forms of ID i.e., 1. Government issued photo I.D., such as a driver’s license, 2. Social security card etc.
3. Certified or cashier’s check for the closing costs including any balance of a down payment that you’ll owe & made out to the title or closing company; this information will be provided to you in advance of the closing on the HUD1 statement and or by your lender
4. Any outstanding documents or paperwork that you have not yet provided to the title company or mortgage loan officer (i.e., proof of insurance, condo approval letter or originals of copies you’ve provided of other documents)
Find Your Home's Market Value:
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Schedule your new Utilities
Before you reach the settlement table you’ll need to have an action plan for setting up and transferring the utility accounts to your new home, understand the steps you should take to make a smooth transition. Not all utilities shown below are applicable to every home, but this is a comprehensive list of the accounts that you need to inquire about:
What is a Jacksonville Florida Short Sale?
A Jacksonville Florida short sale is the sale of real estate in which the proceeds from selling the property fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts. The lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency.
Short sale agreements do not necessarily release borrowers from their obligations to repay any shortfalls on the loans, unless specifically agreed to between the parties. Once the short sale is approved, no deficiencies are permitted after the short sale. A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower. There have been 2.2 million short sales in the United States during the Subprime mortgage crisis.
In some ways, buying a short-sale property is just like a traditional purchase. However, there are a couple of ways in which the purchase agreement you and your agent draw up are different. The contract will specify that the terms are subject to the mortgage lender’s approval. In a normal transaction, the only party who would need to approve the sale is the seller. Some experts say that short sales are priced below market values, creating the opportunity for buyers to get a great deal or for first-time home buyers to get into a home when they otherwise might not be able to afford one.
"FYI - You could wait up to a year to close on a short sale, so be prepared to wait".
What is a Jacksonville Florida Foreclosure?
It is the process by which a homeowner’s rights to a property are forfeited because of failure to pay the mortgage. If the homeowner cannot pay off the outstanding debt or sell it by short sale, the property then goes to a foreclosure auction. If the property does not sell at auction, it becomes the property of the lending institution. If you are house hunting, you may want to consider buying a foreclosed home, also called a real estate owned (REO) property. An REO property is owned by the lender as a result of the previous owner defaulting on the loan. This is also known as a foreclosure property or a bank-owned property.
The two common ways of buying a foreclosed home are through a Jacksonville Florida real estate agent or through a public auction. There are many factors to consider when buying a foreclosed home compared to a traditional home purchase. REO properties are an affordable housing option, but there are also more things to watch for with this type of home purchase such as:
- Property condition - Given that the bank has not maintained or had first-hand knowledge of the foreclosed home before acquisition, there may not be any record of property repairs or maintenance that would assess the true property condition. Often times, the bank is unable to verify the condition of the property or complete a Seller’s Disclosure. Buyers are allowed and encouraged to complete professional home inspections on the property.
- With a typical real estate transaction, out-of-pocket expenses can occur before and after an offer to purchase a property has been submitted. These out-of-pocket expenses may include lender required documentation such as an appraisal or home inspection and bank-required minimum earnest money. Earnest money is a “good faith” deposit demonstrating the buyer’s interest in the property and may be an indicator of how much money will be deposited as a down payment.
- You, as the buyer, should work with your agent prior to closing, to coordinate the date you may take possession of the property. Title issues may be discovered during the closing process and will need to be addressed and resolved, along with completion of all necessary paperwork to support the transaction. An extension of the close date may be requested by the seller if these issues cannot be resolved by the contract close date. Because of this, you as the buyer, should allow enough time after the scheduled contract close date to schedule movers, furniture deliveries, utilities, and so forth.
What is HUD Home?
This is a home that has been taken over by the United States Department of Housing and Urban Development (HUD) as a result of a foreclosure on a FHA insured loan. HUD homes can be a very good deal if you are lucky enough for your offer to be selected from the bid. When someone with a HUD insured mortgage can’t meet the payments, the lender forecloses on the home; HUD pays the lender what is owed; and HUD takes ownership of the home. The house is then sold at market value as quickly as possible. The homes are usually obtained by a new buyer through a bidding process with a specific set of purchase rules. Using a Jacksonville Florida real estate broker is a very good idea. All the details involved in home buying, particularly the financial ones, can be mind-boggling. A good Jacksonville Florida real estate professional can guide you through the entire HUD process and make the experience much easier.
To purchase a HUD property in Florida, you must use a Realtor® registered with HUD.
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The median age of Jacksonville FL real estate is 29 years. Renters make up 33.78% of the population and 11.79% of houses and apartments are unoccupied. As your Jacksonville FL Realtor®, I offer extensive knowledge in local neighborhoods, schools and market conditions.