Miami has the strongest housing market in the United States and is one of the top real-estate “export” cities in the world (real estate export is when foreign investors buy real estate as an investment rather than as their residence). 90% of all new condo construction in Miami is due to the incredibly high demand from foreign investors; most of whom are buying the most expensive properties on the market, and almost all of whom are paying entirely in cash.
This intense demand, combined with a large volume of all-cash buyers, makes Miami one of the most complicated cities in the country to buy real estate.
If you are looking to buy a home in Miami or in Miami Beach, Stavros will guide you through the complicated buying process, and will do everything he can to help make it a smooth and enjoyable experience for you. Stavros excels at understanding each client’s needs and is extremely efficient with his time and with your time. Stavros will prepare you for the many challenges that you will face as a real estate buyer in Miami, and he will minimize the problems and hurdles that most buyers face when trying to purchase properties in this extremely competitive market.
What Stavros will do to help you buy a home in Miami:
- Evaluate your needs and find properties for you that fit your specifications.
- Accompany you at property showings or view properties on your behalf if you’re not in Miami.
- Research your chosen property and help you make informed decisions prior to making an offer.
- Advise you on structuring your offer.
- Present your offer to the seller’s agent and/or the seller on your behalf.
- Negotiate on your behalf to help obtain a contract on your chosen property.
- Make recommendations for financing your home.
- Provide resources for services such as home inspectors, attorneys, and insurance agents.
Your first steps to buy a home in Miami:
- Know your timeline for moving & do your research on which Miami neighborhood suits your needs.
- Read the Home Loan Toolkit to educate yourself on mortgages.
- Precisely evaluate your budget and use a Home Mortgage Affordability Calculator to determine what you can afford.
- Get pre approved for a mortgage before you begin your search for your new home. You can view today’s mortgage rates here.
- Contact Stavros Mitchelides, Miami Beach Realtor to chat about finding your new home.
- Start your Miami real estate search now!
The complete process to buy a home in Miami:
1. If you’re not paying in cash, you must get pre approved for a mortgage loan first:
You can’t shop for a new home until you know how much money you can afford to spend on it. You will need to give your mortgage loan originator (Stavros can refer you to some of the best lenders in Florida) details about your income and assets so that they can determine how much you will qualify for. Your mortgage lender will provide you with a pre-approval letter that you will need to provide to your Realtor to begin the home buying process. Most lenders adhere to the federal government lenders Fannie Mae & Freddie Mac standards in reviewing loan applicants. Those agencies recommend that your maximum housing expenses are 28% of your income and that your maximum for payment obligation is 36%. Some lenders will vary from these guidelines, so a prospective buyer who does not meet the guidelines may still be able to find a lender that will make the loan. The common reason buyers don’t qualify under the Fannie Mae/Freddie Mac standards is usually the total obligations ratio. If that’s too high, a creative lender can still help by increasing the qualifying income or suggesting prepaying some installment debt to less than 10 months so that it’s no longer counted. A very high credit score could also help get the loan.
Other factors include:
- having a good record of promotions and raises;
- having little or no installment debt if housing expense ratio is too high;
- making a down payment greater than 20%;
- having saved money while making rent payments higher than the mortgage payments of the new mortgage; and
- having a job with great benefits, such as a company car, free health plan, and high company contributions to a 401(k) plan.
2. Paying Cash?
For those of you that plan on paying cash for your new home, you can eliminate step 1 above, but you will be required to show proof of funds to guarantee that you have the ability to purchase the real estate without a loan.
3. Search for a new home and decide which one to purchase:
Typically the search takes 2 to 8 weeks. Most people visit up to 15 homes before deciding on one, but you can save yourself the time and effort by doing all of your research online prior to viewing houses in person. A typical online buyer only visits 5 properties before making a decision.
4. Make your offer and negotiate your terms:
Typically the process of making the offer and negotiating the terms takes a few days. This process is where we determine the price, the terms, and the contingencies (such as appraisal, financing, inspections, etc.).
5. Execute the contract and open escrow with a deposit:
Typically the process of executing the contract and making the escrow deposit takes a few days. Once you execute the contract you will make an escrow deposit which will be held until the closing.
6. Apply for a mortgage if you’re not paying with cash, and get a mortgage commitment letter:
Typically this process takes 30 days. A commitment letter is a written promise from your mortgage lender that they will loan you the money.
Your mortgage loan application will require the fully executed contract plus:
- Employees – Your last two bank statements, tax returns, pay stubs and W2’s.
- Self-Employed –Your last two bank statements, personal federal tax returns, corporate tax returns, 1099 statements, 1120’s or 1065’s (if applicable).
7. Meet the conditions of the commitment letter:
Your goal as a home buyer who is financing the purchase is to get ‘clear to close’ from your lender. The lender will have specific conditions that must be met before they will clear you to close and finance your purchase. These conditions can be a multitude of things such as an appraisal, financial documents, homeowners insurance etc. Once you satisfy all of the conditions of the commitment letter, you will be ‘clear to close’!
8. Schedule the closing:
In most circumstances the buyer chooses a closing date that is ideal for them and includes it as part of the offer. The contract will state that closing will occur “on or about” that chosen date. If the closing doesn’t occur within a reasonable timeframe of 30 days from the date noted in the contract, the buyer and seller must then agree on a new closing date.