Buying A Home and Financing
Buying a HOME in Lee County …
Different areas of the country have different customs and expectations of buyers when placing an offer. Let’s start with an overview.
- Loan Pre-Approval: If you are looking to buy a home we suggest that you first get a loan approval from your lender for your mortgage (before even scheduling viewing of homes). We will need to know what kind of loan you are receiving (conventional, VA, FHA, USDA) since there are different requirements for these different types of mortgages. We will need the loan approval letter to submit with your offer. We would be happy to provide you with a list of local lenders upon request.
- Viewing homes: In the Lee/Collier areas there some Realtors that use an appointment call center. RE/MAX Realty Team has a call center for all company listings, but many other agents require us to call them for an appointment. The listing agent then calls the owner to approve the appointment day/time. Many occupied homes require 24 hour advance notice for an appointment. We recommend keeping the home viewings to 5 or 7 homes, unless you are limited for time. Viewing 5 to 7 homes can take up to 4 hours to view, depending on their location(s).
- Placing an offer: Now that you have chosen your new home, it is time to make an offer. We will complete a Competitive Market Analysis (CMA) for the property you’ve selected and we will talk about our offer strategy. Sellers are not concerned about the top line of what you offer, but their bottom line (or net). So when developing our pricing strategy we must consider if you are asking for closing cost help from the seller, repair costs and cost of a home warranty, as examples. The length of time to closing can also be a large part of their decision to accept, counter or refuse an offer. Generally, sellers are looking to close in 30 to 45 days (occasionally sooner if it is a cash purchase). FHA and VA loans take roughly 45 days to close so we must consider that in the closing date request.
- Escrow (or “Earnest Money”) Deposit: You will need a check for your Earnest Money Deposit. This is usually 1% of the sales price (again, if you are cash buyer it is not uncommon for a seller to ask for 10% in escrow). This money will be placed in an escrow account to be applied to your final settlement costs. Personal checks and cashier checks are acceptable in Lee County.
Take the steps necessary to get a letter from a lender stating you are “pre-approved” for a loan in a specific price range. In Lee County it is customary to have this pre-approval prior to making an offer on a property. It’s important to have this letter before you make a contract offer to buy real estate so you know what price range of homes you should be looking at. This also provides reassurance to a seller that you are a qualified buyer. Similarly, if you are a cash buyer Proof of Funds (POF) are required at the time of offer. There are different methods for POF that are acceptable. Please let us know if you have any questions; we will be happy to provide any information you need, including a list of lenders, as well as answer any questions you may have.