September 08, 2022

What to Do before Closing on a House

Buying real estate in Miami is a separate art. Usually, an investor is helped not only by a realtor, but by a whole team of professionals. A practicing American broker is sharing his experience answering why this is necessary and how the process works. Real estate in Florida is in consistently high demand. There are several reasons for this. This is one of the most popular tourist destinations in the world as more than 66 million tourists visit this place every year. This means that people who need housing are constantly arriving. Tourists and transit passengers – for the night or for a week or two. Those who come for work and study – for months and years.

The place is home to more than 100 billionaires and more than 3.4 thousand super-rich people (owners of net assets of $ 30 million, not counting the cost of basic housing). And this means that the effective demand for real estate is secured. At the same time, it is customary to rent housing here – 67% of apartments are rented. In addition, right now is an exceptionally good time to buy property: mortgage interest rates are close to historical lows. However, the process will not be simple and will require numerous consultations and the help of specialists. To begin with, let's stick to the checklist for closing on a house.

Before buying a home

When starting the process of buying a home in the United States, you must assemble a team of professionals. It usually includes a real estate broker, a bank employee or mortgage broker and a real estate lawyer. As with most teams, the stronger the individual players, the better the result will be, so carefully and thoughtfully choose the people you will work with.

The first person a buyer consults about buying a home is usually a real estate broker. Of course, he must have a license, but it is also necessary that he is a specialist with whom you are comfortable working. The broker should specialize in the areas where you plan to buy a house, always be in touch by phone and email, be ready and willing to answer all your questions and inform you about new apartments on the market.

An experienced real estate agent will noticeably help in the search for objects and market analysis, will represent your interests in negotiations with the seller and will recommend other qualified specialists that you will need.

Your real estate broker will coordinate the activities of the rest of the team, and there may be many of them: a lawyer, mortgage brokers, housing inspector, property law specialists, accountants, financial consultants, surveyors, architects, appraisers, employees of construction companies, designers, movers, etc.

How the broker helps 

At the beginning tell about your priorities and preferences. Tell the price range, preferences by area, the size of the property, the necessary amenities in the house, and also explain whether you are buying a property for your own residence or for investment. Remember, flexibility in any of these areas will significantly increase your chances of searching. The broker will select apartments that meet your requirements and invite you to view them in person or online. While browsing, ask to take notes about each object you visit. It is easy to forget or confuse the features of apartments, especially if you view several objects in one day. It will also be useful to make a house closing checklist to take into account and track the following items.

  • What is the visual condition of the house, lobby, elevators, corridors? If the building needs repair, you will have to plan additional monthly maintenance costs, as well as a separate amount to cover the cost of repairs.
  • Where is the property located in the house? If the windows face the street, it will be sunny in the house, but noise may interfere with you.
  • What is the condition of other houses or buildings in the block? If neighboring houses are in poor condition, this can reduce the resale value.
  • Infrastructure. How close is the house to shops, schools, garages and public transport stops?
  • Are there parks, museums, restaurants nearby? What is the reputation of public schools in the area?
  • How long has the object been on the market? If they have been trying to sell the property for a long time, it is possible that the house has problems or it is difficult to negotiate with the seller.

What credit agents and mortgage brokers do

To obtain a mortgage loan, most buyers turn to a mortgage broker or a bank loan agent. These specialists will not just accept your application and pass it on to other employees of the bank. Their task is to assess your financial situation, determine the preliminary loan amount that you can apply for, and calculate monthly payments. They will also help in preparing and submitting a loan application and explain all aspects of the loan process.

Mortgage brokers, as a rule, do not act as lenders themselves. They organize and discuss the terms of obtaining loans from various banks on your behalf. A mortgage broker selects possible financing options and advises the most suitable one. It helps borrowers gain access to loans they otherwise wouldn't even know about. If you don't want to communicate with different banks on your own, a mortgage broker is the best option. In most cases, the services of a mortgage broker are free for the buyer, since the commission is paid to him by the bank.

Credit specialists are bank employees who have direct access to underwriters – the very people who assess the risks of issuing a loan and make the final decision for each client. If you contact a loan agent, you can get an answer faster than when working through a mortgage broker, but you may have to apply to several banks to get the best conditions, and this will already be long and labor-intensive.

What you need to do before getting a mortgage

It is real for a foreigner to get a mortgage loan in the United States. Banks offer programs designed for foreign buyers, with the ability to finance up to 60-75% of the value of real estate. However, you will have to collect a lot of documents and go through several stages of communication with the bank.

It is best to start with a preliminary qualification. This is the fastest way to determine how much you can borrow. You simply contact the lender by phone and report your income, assets and liabilities. After evaluating this information, the loan specialist will tell you the amount of the loan that you can count on.

Pre-qualification does not include finding out your creditworthiness, checking the information you provided or evaluating the housing you plan to buy, so this is not a one hundred percent guarantee of obtaining a loan. However, the amount named by the specialist will give you an idea of how much you can borrow and what cost to expect for housing.

The next stage is to obtain preliminary approval of the loan. To do this, you need to fill out an application for a loan and submit documentation to a credit specialist confirming your income and assets. Along with finding a home, the loan application process will be the most time-consuming task. If you decide in advance with a mortgage broker, fill out a loan application, collect and submit financial documentation, you will receive the following benefits.

You will know exactly how much money you will be lent, so you will not waste time looking at real estate that you cannot afford.
Your purchase offer will get an advantage over the offers of other buyers, because the seller will know that you are eligible for a loan and will be able to close the deal quickly.
Your purchase can be processed faster because you have already collected and submitted all the necessary documents.