Information to foreign buyers - Buying process for properties in USA/Florida
First you should select a licensed agent who looks after your interest as a buyer. The agent will not charge any commission, since he will get his share from the agent of the seller. You can also handle the whole process yourself, but why would you, if you can have the expertise of a qualified agent and on top of it without any charges.
Once you have found the right property with your agent, he will provide you with information about prices of similar properties which have been sold in the past months. He will also find out how long the property has been on the market and make a comparative study of similar properties in the neighborhood. With detailed knowledge about the property, he will help you with the decision what your first offer should be. Together with the offer you have to provide a small down payment, which will be kept in an escrow account. At the same time you should offer a second down payment (normally 10% of the sale price less your first down payment) and a date for the handover with the remaining payment (usually within 30-60 days).
The seller may accept your offer or make a counter offer, if he feels that your offer was too low. In such case, you may answer with another counter offer until both parties agree to a certain amount or one of the parties withdraws from the business, in which case the down payment would be returned.
In case of an agreement, certain time limits have to be observed, so that you can withdraw from the contract without any loss, in case hidden deficiencies have been detected, which you could not see during our visit. Therefore, you should employ a house inspector who is going to check the property for defects. This will include the condition of the building, the roof, damages caused by mold or termites, surveillance of the electrical system incl. all appliances, air conditioner, etc. The inspector will issue an official inspection report, which will be given to you within 24 hours. If this report contains defects, which may need an expert evaluation, you can ask a specialist to provide a cost estimate for the repair. The sales contract contains the wording "normal wear and tear", but based on the inspection report you may request that the seller repairs the defects or reduces the price accordingly. If the seller does not accept this term, you may withdraw from the contract and the down payment will be returned.
As a next step you should appoint a so-called "Title Insurance" or attorney (specialized in real estate) to verify the right of ownership, to ensure that the seller is registered as the 100% owner and that there are no liabilities, liens or restrictions on the property, as .there are no registries of deeds as in other countries.
What is a "Short Sale"?
If an owner is heavily in debt and tries to sell his property for less than he owes to the bank (market value may be less than the remainder of the mortgage) it is called a short sale. A potential buyer first has to clarify whether there are other creditors besides the bank, such as the community for monthly fees, the tax office for real estate tax, the homeowner's association, etc. In such a case the proceeds of the sale would have to be split up amongst the creditors and each of them would have to waive a portion of the debt. If one of the creditors does not agree because, he wants a bigger share, the whole deal would fall apart and nobody knows how long it will take until all partners would finally agree or not at all. This can be a very time consuming process with an uncertain result.
What is a "Foreclosure"?
This is an execution to sell a property, which will be initiated soon after an owner stops paying his mortgage, taxes or fees to the homeowners association because, he lost his job or because, he is heavily in debt. After he fails the first payment, he normally gets a warning, but if he fails again the next month, surely one of the creditors will initiate the foreclosure hoping that he gets more than other creditors when the property is being sold by auction. In many cases the bank gets the property and they try to sell it through an agent for the highest possible price. However, there may be problems with the assumption of costs or with the overall settlement and it is highly advisable that you involve an experienced agent for foreclosures. The sales contract in such cases is always "as is" and the seller will not accept any liability for defects etc. Unfortunately there have also been cases in the past in which banks were negligent in the transfer of the property and despite the fact that the new owner paid in full, he is not the legal owner. So you have to be very careful.