Being pre-approved, not just pre-qualified can put you in the strongest negotiating position possible. Obtain a full approval from a lender,conditioned only upon a contract and satisfactory appraisal.
This differs from a pre-qualification in that the information submitted to the lender is verified and underwritten.
We’ve seen pre-approval make the difference many times when multiple offers are submitted on a property, even if that pre-approved buyer was offering less money for the home. A seller will feel much more comfortable knowing that financing will not be an issue and that their property can be taken off the market with confidence. Pre-approval can be obtained in a matter of hours (in some cases a few days) and is a powerful weapon all buyers should have at the negotiating table.
Wait for the sale before you buy:
If you have a property to sell, make sure it is sold before selecting a purchase. Contingency contracts rarely work in this market and leave a huge margin for error. At least get a contract on your current property, so you can make the contingency on the close, not the sale. Chances are, If you do make a contingency offer, you’ll likely end up paying more for the property than without one and feel pressured to accept a lower price for your current home. This can end up costing you tens of thousands of dollars. You are much better off selling your current property first.
Don’t waste your time calling Real Estate advertisements:
A large portion of real estate ads are produced solely to make the phone ring and produce a fresh lead. Most calls generated by these types of ads are from unrepresented prospects. A realtors dream! Also, remember the agent who wrote the ad represents the seller, not you. A buyer’s agent will take a neutral standpoint with an eye toward how well it meets your needs, pointing out any drawbacks you should know about. Homes that are sold without a sign ever going up or an ad ever placed are great examples of the power of a buyer’s agent.
10 RECOMMENDATIONS FOR INVESTING IN MIAMI
Truth, loyalty, and trust are vitally essential to any investment! Find a real estate agent who is sincere, knowledgeable and exhibits lots of patience. Once you feel comfortable in your new relationship, remain loyal to this agent as you attempt to build a trusting and lasting friendship together. A great agent will always look out for your best personal interests, but when you work with different brokers, it can become counter-productive due to conflicting personal interests. Remember, loyalty is always a two-way street.
Get familiar with Miami and its surrounding areas! Miami is a huge area filled with many incredible real estate locations and opportunities, but make sure that your real estate agent takes time to educate you about Miami’s major areas before you invest. You don’t want to hastily purchase an apartment or home, only to later discover a new area or location that would have better suited your needs. A truly great agent will prevent this from happening.
Buy for resale! Always select properties with the best potential resale value in mind. You’ve probably heard that the three most important things to remember when investing in real estate are: location, location, and location! You may not have also heard that the three most important things to remember when investing in condominium buildings are: view, view, and view! You can always change the interior of an apartment or house, but you can never change its location or exterior view. In most cases, that little extra you invest in location and view going into a deal will bring you a lot more going out!
Define your occupancy requirements! Your time is very valuable, so it’s important to clearly designate your occupancy needs before you start your search. If you’re interested in buying real estate that offers immediate occupancy (30 to 45 days), it’s best to search primarily through the MLS, as properties listed there are readily available for quick closings. If you would like to invest in something that will provide occupancy in about 12 months, buildings that are well under construction would be a perfect choice. On the other hand, if your occupancy requirements extend as far as 24 to 36 months out, there are many outstanding pre-construction developments that will allow you to reserve an apartment at today’s prices, while only providing occupancy upon completion of the building. In any case, it is important to inform your agent of your occupancy requirements, as this important information will help avoid wasting valuable time.
Know how you will pay! While most foreign nationals pay all cash for their Miami investments, more and more buyers are starting to use American bank loans to assist in financing purchases. Obtaining a new loan can be a positive decision, as it immediately establishes American credit and enables many foreign buyers to increase their new purchase price to a much higher luxury level. If you are considering financing for your next investment, it is highly recommended that you begin the application process long before you visit Miami. Once you select your new Miami residence, having your loan pre-approved is just as good as offering all cash.
Negotiate from a position of strength! Once you decide to make an offer on a property, it’s quite common that you may be competing with multiple offers presented simultaneously to the owners. In order to be as competitive as possible with other prospective buyers, it is advisable that your agent use an as-is residential contract for purchase and sale, offer all cash if possible, put up a solid 10% earnest money escrow deposit, and set up the closing for thirty days or sooner. This will send a clear message to the sellers that you are a strong, highly qualified candidate and eminently capable of buying their property. Because the average Miami and Miami Beach properties sold in 2012 and 2013 were sold for 95% of their listed price, it is important that you offer something at or near the asking price if you are serious about not losing the property to another buyer. In addition, don’t give the seller too much time to consider your offer: thirty-six hours should be sufficient for an owner’s response. If you give them too much time, the owner and agent are likely to use your offer as leverage to raise offers from other buyers.
Have your new property inspected by a professional! Even if you purchase your new property in its as-is condition, it is always the best policy to have it inspected by a professional home inspection company within the time period indicated on the contract. In the event that you find major items that need to be repaired or replaced, you will still have an opportunity to terminate the contract in the event that sellers are unwilling to share these costs with you. Remember however, that any written termination notice to the sellers must be given within the proper notification period written in the agreement in order to maintain full compliance.
Take title in a Limited Liability Company! Many foreign nationals are purchasing their new Florida properties under a Limited Liability Company (LLC) as opposed to taking title in their own individual name. The primary reasons for utilizing an LLC are that it provides personal privacy and protection, as well as favorable tax advantages. If you decide to use an LLC to take title to their property, it is advisable that you have it formed and finalized before the actual closing. Any attorney or certified public accountant (CPA) can prepare your new LLC for a reasonable fee.
Anticipate typical closing costs! Before making an offer on any property, ask your personal agent to prepare an estimate of your closing or settlement costs in advance. This will assure that you will avoid any surprises at the closing table. If you are paying all cash, closing costs are quite minimal, but if you are obtaining bank financing, closing costs can be much higher due to mandatory federal guidelines that require borrowers to place advanced tax and insurance deposits in the bank’s escrow account.
Get creative to maximize your returns! The only way to predict how much money you will make if you purchase a property is by assessing how much your own creativity is worth. It is the buyers with the most creative instincts and abilities who always receive the best returns on their real estate investments. With this in mind, start looking through as many architectural and design publications as possible to put yourself on the inside track of the most trend-setting interior looks and designs for your exciting new Miami residence. You’ll be happy you did!
Multiple Listing Service (MLS)
Learning to use the MLS to your advantage: Unlike most other parts of the world, virtually every property available for sale in Miami is included in our Multiple Listing Service (MLS) for your personal comfort and shopping convenience. With our MLS, you won’t need to contact four or five different real estate brokers to explore what listings they might have, as we make every important piece of information, including photos of listings, immediately available for you to view online.