What to know before submitting an offer
Before submitting an offer you should know:
- What additional costs to expect (taxes, insurance, community fees, property tax surcharges)
- What rules apply if purchasing in a community
- Whether the community has financial or legal problems
We can provide you with all necessary documents from the community’s property management.
We can also supply you with information on recent sales and active listings in the area to help you put together a competitive offer.
Sample contract with necessary attachments
The Association of Realtors created sample contracts for the purchase of houses, apartments and land that are used by all realtors. In order to make an offer on a property, this purchase contract needs to be completed in full. The key points are:
- Contracting parties
- Object identification
- Included furnishings
- Payment terms
- Ownership transfer date
- Special conditions in case of financing the purchase price
- Rights and obligations regarding the home inspection
The following documents may also be attached to the contract:
AS-IS Attachment: In foreclosures, it is common for the buyer to purchase the home as-is, meaning that the seller does not have to make any repairs. However, the buyer still has the right to inspect the home. He also has the right to rescind the offer within a certain timeframe specified in the contract (usually 15 days) and ask for his deposit back. If the home inspection reveals issues that are not acceptable to the buyer, he can withdraw from the contract without consequences or renegotiate the terms.
In addition, the following documents must be given to you before you sign the purchase contract:
State of Florida Energy Brochure: This brochure includes useful information for energy saving opportunities in newly purchased homes and the major sources of energy consumption, which might help guide your purchasing decisions.
If you’re purchasing in Collier County, you will receive a brochure from the county. It includes information on property modifications that require a permit, your inspection rights and your responsibility regarding previous modifications that might have been done without the proper permit.
For properties completed before 1978, you will receive a brochure about the dangers of lead-based paint and a form from the seller disclosing all known information about the use of lead-based paint.
Agency Disclosure: This form is handed out at the very first meeting between realtor and client. It informs the client of the obligations a Florida broker has to the client. The realtor needs a written confirmation from the client that he has handed over this document. Your signature does not create any obligation on your part as the buyer, you are only acknowledging receipt of the document.
Up next: The purchase contract
The realtor helps you fill out the purchase contract and all necessary attachments. Afterwards, this package is sent to the seller’s agent.
The seller will review the contract with their broker and either:
- Accept the contract
- Make a counteroffer (almost always regarding the price but sometimes also regarding the payment terms or included furnishings)
- Not respond if the offer is considerably too low
If the seller does not accept the offer, it is now up to the buyer to react. If he is still interested in the object, he can accept the counteroffer or make another offer. It’s possible that the buyer and seller (through their realtors) go back and forth several times.
Most of the time these counteroffers are in writing, but sometimes they are only communicated by phone or email and only the final agreement is put on paper.
Even more documents
If the seller and buyer come to an agreement, the following documents are often added to the contract. Sometimes they are already included in the original contract.
Seller’s Disclosure: In this document, the seller gives a report on the condition of the house and land. The seller is required by law to disclose any defects known to him that are not obvious. This document is voluntary but is required by most brokerages when accepting a sales order.
HOA Disclosure: If you are buying in a community, this attachment must be included. It informs you of the obligation to become a member in a homeowner’s association with all rights and responsibilities, as well as the current HOA dues.
HOA Documents: If you purchased in a community, you’ll receive a stack of papers (often 100+ pages) containing the rules of the HOA or condominium association. This includes restrictions on use, scope of common property, election of homeowners’ representatives, and more.
Financial Information about the Development: Communities must submit a year-end statement that includes revenue, expenses, and existing reserves. In addition, they must submit a budget for the current fiscal year, which serves as the basis for determining the fees to be paid by the owners. The reserve is especially important for condos because it will be used to pay for exterior painting or roof replacement.
Receipts for Condo or HOA Documents: All HOA-related and financial documents require an acknowledgement receipt.
The first deposit
After everything is settled and the contract is signed by both parties, the first deposit is due. The deposit equals usually about 3 – 5% of the purchase price (sometimes up to 10%). According to the contract, the deposit is due immediately after all parties have signed the contract. Since most foreign customers don’t have a U.S. bank account yet, the first payment is usually transferred from abroad. Foreign bank transfers can take between 3 and 5 business days, this should be noted in the contract under special conditions.
The deposit goes into an escrow account.
Please make arrangements with your local bank prior to departure. The bank should be able to initiate a wire transfer to the U.S. when instructed by phone, email or fax.