Dealing with a Qualified Real Estate Agent
It is important to deal with a qualified real estate agent since the laws and usage related to buying a property in Florida are different from those in Canada. Depending on the prequalification of your purchase method, a reference can be made to a real estate agent in Florida recommended by Desjardins Bank The real estate agent is not paid to accompany you in your search, he will receive a commission from the seller when the property is sold.
Verify the Condo Association's Financial Situation and its Regulations
Considering the number of properties repossessed or vacant, it is important to verify the association's financial health and the delinquency rate of monthly condo fees. For reference, Desjardins Bank accepts a condo fee delinquency rate under 10%. Between 10% and 15%, the loan may be considered under certain conditions. When the delinquency rate is higher than 15%, if the loan is still approved, the percentage of financing could be reduced. Associations rarely divulge these figures until a formal purchase offer is completed.
The association's regulations contain the details concerning rental of the unit, visiting rights (55 years +), etc. It is important to include a clause in the purchase offer in order to obtain these regulations in writing. Future buyers normally have 3 days following receipt of the regulations to withdraw their offer if they find them unsatisfactory.
Producing a U.S. Income Tax Return
When should you produce a U.S. income tax return?
- Depending on the number of days spent in the U.S., substantial presence test
- For rental income on the property you own in the U.S.
- When you sell the property you own in the U.S.
Method of Ownership and Estate Taxes
It is important to determine the method of ownership prior to buying a property, whether it is to be used as second home or purchased as an investment. Estate taxes upon your death may apply in certain circumstances. During our personal interview we will validate certain information with you, and may refer you to one of our partners so that you determine the best method of ownership based on your financial situation.
A good faith deposit is required with the purchase offer submitted by the real estate agent. To avoid proceedings and costs, you should have a U.S. check in hand to submit the good faith deposit. Usually a deposit between $2,500 and $5,000 may be required. The check must be made out to a title agent or attorney, with the mention "escrow account".
When submitting your purchase offer, the real estate agent will include a proof of funds notice or a financing prequalification from Desjardins Bank.
Clauses should be included concerning an inspection, receipt of the association's regulations, financing acceptance if applicable.
Transaction Types Currently Available on the Market
- The owner still possesses the home
- He is trying to sell at a price below the mortgage
- Permission is needed from one or more lenders or the seller must qualify
- Long period to obtain the transaction authorization
- The authorized price may differ from the listed price
- The lender is the owner of the property
- Sale to the highest bidder based on multiple offers
- Short period to obtain the transaction authorization
- Accepted price is firm
- The property is not being repossessed
- The seller must tend towards repossessed prices
- Sellers motivated when properties on sale for over a year
Whether you are buying a single family home, a townhouse or a condo, we recommend that you always have an inspection carried out on your future purchase. The real estate agent who represents you will recommend a trustworthy inspector he works with to ensure the good condition of your future purchase. Among other things, the inspector will check for termites or Chinese dry wall, the roof, the performance of the air conditioner, the water heater, etc. Based on the result, a negotiation could take place with the seller concerning any repairs required.
First the regulations which will inform the future buyer of the association's rules, namely concerning rental rights (number of times per year, restrictions during the first few years), age restrictions (55 years +), etc. Financial statements should be examined, as well as the contingency fund, to ensure financial health.
Once your purchase offer has been accepted, you need to complete the association's form so that the association can confirm your acceptance as a future owner.
The closing transaction is the sale of the property, to be held on the date indicated on the purchase offer. This is usually about 30 days following the purchase. You have the possibility of signing in Florida or the signatures can be done remotely (see details in the "Financing" section if a mortgage loan is granted in Florida). This transaction will be carried out by a title agent or attorney since the notary function does not exist in Florida.
To ensure a valid property title and protect yourself against any omissions, fraud or other title issues, the title agent or attorney will issue a title policy to the buyer to cover potential costs involved in settling a problem situation.
Estimate of Buying Fees
Some basic fees are the same whether the purchase transaction is worth $100,000 or $300,000, whereas other costs vary based on the purchase price. Here are the expected costs for a transaction worth approximately $100,000
For a Cash Purchase
- About 2 to 2.5% of the purchase price
- Inspection, title agent, title policy, distribution of taxes, insurance, related costs
Purchase Financed in Florida
- About 3 to 3.5% of the purchase price
- Inspection, assessment, financial institution file handling fee, title agent, title policy for the buyer and the seller, county and Florida state taxes, related costs
- For a condo: condo questionnaire
- For a single family home: certificate of location
When a request for financing is submitted to Desjardins Bank, a preliminary estimate of all costs related to a purchase transaction with financing is prepared for you.