BUYER INFORMATION

BUYER INFORMATION

THE 

 "PRODUCER$"

Real Estate Of Florida

Brian Duffner  Realtor

Direct: 561-352-0183

E-Mail: BrianDuffner57@gmail.com
www.producers1.com 

     

Home buyer's Guide 

Even Dudley Agrees!

Whether you are a first time home buyer

 or purchasing a second or vacation 

home, when you own your own home, 

your hard-earned dollars contribute to 

your mortgage. The equity you earn is 

yours to keep. Over time, your home will 

increase in value regardless of current 

market conditions.

The following information, home buying 

tips  and real  estate terms are intended 

to be a resource to guide you  through

the real estate home buying process and 

make what is for most people the Largest

INVESTMENT in their  lifetime. If you have 

any questions, or if you would like to 

schedule an appointment to meet with me

      regarding steps to buying a home,

 Please Call Or Email Me!

Direct: 561-352-0183

E-Mail: BrianDuffner57@gmail.com

Home Buying Benefits

On average, Residential Real Estate

has typically appreciated approximately

5% per year nationwide. Of course

this figure fluctuates by area. Some

Neighborhoods in Palm Beach, Broward,  

St Luci, Martin, & Dade counties have seen 

appreciation  well above the 5% 

 and in some instances it has been 

even higher than that 25%. 

With the uncertainty of the stock market

and "safe" investments presently returning

very little profit. Real Estate historically 

continues to generally prove to be a 

sound investment with 

rewards from Uncle Sam too.

When you file your yearly income tax return, 

as of  this writing you are permitted to

deduct the interest amount on your loan as 

well as the property taxes! As a renter, you 

cannot deduct any home expenses.

Buying A New Home

Budgeting Housing Expenses. If you

have been renting for some time, you 

are probably aware that your rental 

payment generally increases at each

renewal. Loan payments are generally

a fixed amount each month for the

duration of the loan unless you get

a variable or adjustable rate mortgage.

Even then your payment is fixed for

a certain period of time.  

Money in the bank, with each loan 

payment you make, a portion of that 

amount is being applied to the 

"principle", which means you are

building equity in your home.

All though , in the beginning, you

are paying mostly interest, combined

with appreciation over time, your 

equity can grow rapidly.

First Time Home Buyer - Do's And Don'ts

DO check your credit long before you plan 

to purchase a home to see what your Credit 

Score is. The higher your Credit Score, the 

better interest rate you will get.  Also, it is a 

good idea to check your credit report in case 

there are surprises on  your report that you 

may not be aware of.  You can  check your 

credit score at: www. MyFico.com.

DO Make all payments on time. Just 30 

days late  will adversely affect your 

credit score.

DO Get pre-approved for a loan if you 

will finance the purchase before even

looking for a house. Knowing how much 

you can afford ahead of time will save 

you and your Realtor valuable time.  Being 

 pre-approved also makes your 

offer more favorable to the seller since 

you are already approved for a loan.

DO Maintain your deposit and closing 

costs in a financial institution for at 

least 2-3 months before applying for a 

loan. Your lender will require all financial

statements for at least 3 months at time of 

application and will also ask for the latest 

statements  just before closing.

Don't make major purchases such as a 

CAR, furniture, appliances, vacations or 

any financial obligations. These purchases 

will show up on your credit report and may 

lower your credit score.

DON'T apply for credit cards, loans or any 

other type of credit.

 DON'T Quit your job!  Changing jobs may 

not pose a problem in most cases as long

as you remain in the same profession.  

There are, however, certain restrictions.  

Get all the facts pertaining to you before 

making a decision to change jobs.There 

are other DO'S and DON'TS, however, these

are among the most serious to take into

account.

    Seller's Market Versus 

A Buyer's Market

 

Every region experiences a revolving cycle

 known as a Seller's Market or a Buyer's 

Market depending on many factors such as 

the national and local economy, interest 

rates, supply and demand, etc. When there 

is an abundance of homes on the market 

and a shortage of buyers, this is typically 

a Buyers Market because buyer's for the 

most part are in control. Contrary, when 

there is a shortage of homes and many 

buyers, this is a Seller's Market.

Interest rates also play a role in this cycle.  

When rates are low, more people qualify 

for a loan or qualify for a higher amount.  

When rates are high, less people qualify.

Right now, we are experiencing some of 

the lowest interest rates in many years. If 

you have been considering purchasing a 

home, take advantage of the low interest 

rates. All indications are that rates will soon 

be on the rise as the economy starts to 

improve.  

Why Choose A Realtor?

Choosing A Real Estate Agent - There are 

many good REALTORS , but there are few 

great ones.  You should first be comfortable 

with the Realtor you select.  Since you will 

be spending a lot of time with a Realtor, 

there should be a connection. When 

selecting a  Realtor, interview them as if 

you are an employer and they are applying 

for a job.  If you think about it, you are hiring

a Realtor to help you find a home.Ask to see 

their Resume. Question them on how long 

they have been in the business and what is 

their track record. 

 Most REALTORS will tell you how great they 

are, but the true "great ones" will tell you 

what they are going to DO FOR YOU.  

Home Buying Tips

MAKING AN OFFER

Once you have identified a home that meets

 your requirements, how do you go about 

making an offer?  First, you will need the 

answers to 10 Negotiation Questions 

(below) and then create a Comparable 

Analysis of similar homes in the 

neighborhood that are for sale, pending a

sale and have closed. 

 The internet is a good source for some of

 this information; however, most reporting 

sites are not as up-to-date as the Realtor's 

Multiple Listing Service or Regional 

Association Of The Palm Beaches MLS.The 

Multiple Listing Service (private to REALTORS) 

is maintained by REALTORS and tracks vital 

home information for several years.

Another factor to consider before making an

 offer is the property condition. Is the condition

 the same as, better than, or less than similar

 homes in the neighborhood? What is the 

condition inside the home, outside the home, 

roof, etc? How much will you need to invest

 in the home to bring it up to standards for the

 neighborhood?  Keep in mind, improvements 

for  your enjoyment should not be considered 

in this amount.

Market Condition will also play a role.  In a 

hot seller's market, properties tend to sell 

quickly. It is possible that there could be 

'multiple offers' on the same property by 

several interested buyers. Sellers will be 

less likely to compromise and will be 

looking for the strongest purchaser with

less or no contingencies. It is possible that 

the home could sell above the Listed Price.

In a slower period, or 'buyer's market", homes

may stay on the market longer, whereby the

seller is more likely to compromise.

Finally, and most importantly, is how you 

feel about this home and your motivation.

 If you have found your "dream home" than

you will be less likely to negotiate.  Personal

feelings are important because you will  have 

to live with your decision once you have 

purchased this home.  

THE DEPOSIT

Generally speaking, sellers like to see a 

deposit between 5 and 10% of the purchase 

price; however, the deposit amount is 

negotiable. When you make your offer, you 

will include nominal "earnest money" 

with the offer, and upon acceptance of your

offer, you will make an additional deposit to

equal the agreed upon deposit amount within 

a specified time period.  It is important to 

understand the deposit is not "held."

  

The deposit is deposited in the Real Estate

 or Title Company's escrow account and will 

be delivered to the closing agent at closing. 

 It is also a good idea to try to limit the

 deposit amount incase of any contract 

disputes, whereby, this amount will be held

 until a resolution is determined. This doesn't

 happen often, but it is something to consider.

DOWNPAYMENT

The down payment is the cash amount you 

are putting down on the property. If you will 

be getting a loan, the down payment is the 

cash difference between your loan amount 

and the purchase amount. Seller's like to 

see a large down payment because the 

buyer is more likely to get approved for 

the loan. 

CONTINGENCIES

The Offer to Purchase will include several 

contingencies.  The first contingency will be 

for "Financing" if you are not paying cash for

the property and will be applying for a loan. If 

you are not approved for the loan, generally,

the contract will be considered null and void 

and you will get your deposits back. 

INSPECTIONS

A Comprehensive Inspection is another

 contingency. The inspection company 

that you choose and pay for will inspect 

the overall l condition of the house, such

as the structure, electrical, plumbing, roof, 

(seawall) etc. The inspector will also 

inspect for Termite and pest infestation 

including dry wood rot and water damage. 

You can also have a separate inspection for 

Mold. Depending on your contract, the seller 

can be responsible to  make certain limited 

repairs up to an agreed upon amount, the 

seller can make all repairs, the buyer can 

accept the property in its "as-is" condition, 

or the buyer or seller can cancel the contract. 

 Whatever the case, the Inspection  at least 

gives you peace of mind, knowing beforehand, 

the condition of the property.

SELLER'S DISCLOSURE

The Seller's Disclosure is a document signed

by the seller disclosing all material facts 

about the property that the seller is aware of.  

This includes any problems with any items

 in the house, any items in need of repair, age 

of appliances, structural problems, legal 

actions or additions not done with permits, 

etc. This document also discloses the age of 

the roof, if known, any leaks and what if any 

repairs have been made. This disclosure will

 be important in determining your Offer 

amount.

There is a list of other contingencies that you 

may need to include in the contract depending 

upon your circumstances.  Your Realtor can 

assist you in this area.

CLOSING AGENT

The closing agent you select can be an

 attorney or a Title company or a 

combination of both. The closing agent

handles the transaction from Contract to

Closing making sure that there is "clear title"

to the property and securing Title Insurance

for you the buyer and for the lender. In Dade 

and Broward counties, the buyer chooses the 

Closing Agent and in Palm Beach County,

the seller chooses the closing agent. The 

closing agent also in contact with the 

Mortgage Broker to follow up with the loan 

process and coordinates final figures for the 

closing day.  Generally 1-2 days before 

closing, the closing agent will notify you the 

final amount in a cashier's check you will 

need to bring with you to  closing to cover 

 he down payment and closing costs. Your

 initial deposit will  be delivered by the Realtor.

CLOSING DAY

Before closing, you will do a "Walk-Through"

 inspection to verify that all repairs have been

 made if applicable and to verify that the

 property is still in good condition before you

 purchase it.  The closing day is not a day to 

re-negotiate, it is just simply to verify all 

previous agreed upon items have been 

completed. At closing, the transfer of title takes

 place. The seller receives a check and the

 buyer receives keys to the property.

10 Negotiation Questions 

To Ask When Buying A Home 

Here are ten important questions you should

ask your Sales Associate prior to submitting 

an offer on a property for sale and the reasons

for asking.*

Property Specific

1. How long has the property been on the 

market for sale?

Reason: The longer the property has been 

on the market the more willing the seller may

be to negotiate.

2. Have there been any price reductions during 

the Listing Period?

Reason: The amount of any price reduction,

 as it relates to the overall purchase price, 

 may indicate the seller's desire to attract an offer.

3. Have there been any other offers on the

property?

Reason: If you can obtain this information it 

may be useful in negotiating to know if there

have been offers on the property and why they 

weren't accepted.

4. What is the motivation of the seller to sell?

Reason: Knowing the sellers motivation can 

be the key element in negotiating with the 

seller. For example, if the seller has already 

contracted to purchase another new property,

your ability to close quickly may be an 

attractive element in the negotiations.

5. What personal items are included in the sale?

Reason: Items the seller may be leaving  

behind that you won't need to buy when 

you move has real value. Consider adding 

these items when writing your offer.

Neighborhood Specific

6. What is the price range of SOLD 

properties in the area?

Reason: This information is important since

it will indicate the top and bottom of that 

specific market.

7. What is the average time on the market for 

properties in the area?

Reason: Short market times may indicate a 

seller's market. If this is the case, you may 

face competition from other buyers.

8. What is the list to sale price ration in this

area?

Reason: This information will indicate 

seller's past willingness to negotiate and

by how much.

9. What is the average sales price per 

square foot of recent SOLDS?

Reason: This approach to establish value

works best in a P.U.D. (Planned Urban 

Development), Condominium and/ or where 

there are similar homes, lot sizes and 

improvements.

10. What other known factors about the

property or neighborhood could affect value?

Reason: Review the Seller's Disclosure 

Statement very carefully with your Sales 

Associate.

Final Recommendation

If you will be financing the property, get 

pre-approved for a mortgage prior to making

an offer. This will show the seller your

 commitment and ability to perform. 

Pre-approval can be extremely important 

in a seller's market.

* Depending on the type of agency relationship

 you have with your Sales Associate, he or she

 may not be able to assist you with these 

specific questions.

Loan Programs Available

Fixed Rate Mortgages:

As the name suggests, Fixed Rate mortgages 

are loans where the interest rate remains the

 same throughout the life of the loan. These 

loans offer the lowest risk in terms of monthly 

payment predictability and are appropriate if 

you are concerned that interest rates are on 

the rise. There are two  payback options:

30-Year Fixed Rate Mortgage

These loans offer a fixed rate over 30-years.

 The interest rate is usually higher compared 

to a 15-year mortgage, however, the monthly 

payment is lower. The total interest costs 

will be higher with this loan.

15-Year Fixed Rate Mortgage

These loans offer a fixed rate over 15-years.

 The interest rate is usually lower as 

compared to a 30-year mortgage, however,

the shorter payback period means a higher

 monthly payment.

Adjustable Rate Mortgages (ARMs):

These loans offer a lower initial interest rate

that adjusts each year and is tied to a 

pre-selected market index rate. An ARM allows

you to qualify for a larger loan amount as 

compared to a fixed rate loan, however, you 

assume the risk of your interest rate and your 

monthly payment increasing in the future.

1-year, 5-year and 7-Year ARM

The interest rate is fixed for the specified 

terms then adjusts annually thereafter.

Balloon Mortgage Loans

These loans offer a set interest rate for a 

specified term with the balance or balloon

 payment due at the end of the term. These 

loans are available for 5 and 7 year terms.

Second Home - Vacation Loans

Vacation homes are a great escape, however,

loans on vacation homes typically require a 

larger down payment, involve higher interest

rates, and may have other restrictions 

compared to a primary home loan.

In addition, there are tax ramifications you 

should be aware of with a vacation  home. 

If you do not plan to rent the home, you can

usually deduct mortgage interest and real 

property taxes. You are not permitted to 

deduct the closing costs as you would 

normally be allowed on a principle residence. 

You should  consult a financial advisor for 

advice on owning a vacation home.

Income Property Loans

  As with vacation homes, income property

 loans usually require a larger down payment,

 involve higher interest rates and may have 

other restrictions compared to a primary

 home loan.

Income properties also have unique tax 

ramifications. Renting a property for more

 than 14 days a year qualifies as income 

property. You can usually deduct  a portion

of the mortgage interest costs. All of the 

income received from the property is subject

to income tax. You are permitted to deduct

rental-related expenses - like utilities, 

maintenance and depreciation - with limits.

You should consult a financial advisor 

for advice on owning  income properties.

                 

Repairing Past Credit Problems

Have you had situations in the past that have

put blemishes on your credit? There are many reasons why credit problems occur. 

Some explanations are:

(1) You were a co-signer on a loan that 

wasn't paid on time.

(2)You allowed someone else to use

 your credit cards.

(3)You may have thought your 

spouse paid the bill.

(4)You thought your insurance company was 

going to handle the payment.

(5)You are divorced but your former 

spouse had credit problems.

Some lenders will work with you to find a 

credit solution. They have special programs

 and financing options that allow you to get 

a mortgage even with minor credit blemishes. However, it is in your best interest to keep 

your credit report in good standing. Here are 

some helpful hints for your credit report:

Never go over 90 days past due on any accounts.

Keep your credit card debt below 50% of your monthly obligations.

If paying bills after the due date, always pay within the grace period.

 Real Estate Of Florida

BrianDuffner57@gmail.com

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