Buying Guide: Homes for Sale Tampa FL

So you’re up late searching “homes for sale Tampa FL”. This is your 10^th straight evening on Zillow, things are getting serious for you. You know that you’re definitely ready to buy a home, so it’s time to get your act together and do a little bit more than just find stuff. Then the big question dawns on you, “what’s the physical process involved in order for me to buy this home?”

Most people just say, “get a Realtor®” and leave it at that. But you’re a little more inquisitive. Plus, you’ll never trust anyone enough to not make certain that they’re doing their job. Good thing you found us. We’re going to give you the goods about exactly what goes into a home purchase. There is a lot of information here, if you’re reading this at 2 a.m. grab some coffee, it’s about to be a long night.

Let’s break this down step by step on exactly what is involved when it comes to buying a new home.

Make no mistake about it, buying a home is a long and drawn out process. You can’t keep spending your time searching homes for sale Tampa FL without really understanding what you’re getting into. It takes a small army to complete a home purchase transaction, even if it’s a cash transaction. But fear not, it’s really not all that complicated if you’re prepared to handle it.

Everything in the process of buying a home happens in stages, or goals. During each of these stages, it is important to know who the important people are that have the power to make decisions. That way, if anything goes wrong, you know who can fix it.

I break the goals down into 4 phases for homebuyers that I work with. They include:

∙               Getting Pre-Approved
∙               Home Search
∙               Completing the purchase/build
∙               Closing

Each of these goals has several steps that it takes to achieve them, but as long as you know what to expect, everything is a piece of cake.

First Goal: Get Pre-Approved

At this point, you’ve probably spent 200 hours on Zillow and you’ve found the perfect home about 4 times already. You just didn’t muster up the enthusiasm to go see it before it was off the market, which happens fast now a days.

In any case, even though you’re pretty savvy at finding stuff on Zillow or Realtor.com, you’re still not certain about what happens after that.

This is where most people get off on the wrong foot buying a home. As someone who is remotely considering making a home purchase, you need to make certain that specific items are in your possession before you begin to get serious in your home search. The first item, is a pre-approval for a loan from a respectable lender.

Don’t get tripped up just searching homes for sale Tampa FL. You cannot make an offer on a resale home if you do not have something called a pre-approval letter. Getting a pre-approval from a reputable lender drastically increases your ability to negotiate if you are planning on buying a new construction home.

Step 1: Preparing Documents

The following documents are vital to your ability to truly be pre-approved with any lender:
∙ Last 2 years of Tax returns
∙ Last 2 years of W-2’s or 100’s (if self-employed)
∙ Last 30 days of Pay Stubs or Checks
∙ Other income documents (i.e. SSI, Child Support, Disability, Retirement, etc…)
∙ Last 2 months of ALL bank account statements
∙ Retirement and Investment Plan Statements
∙ Social Security Card
∙ Drivers License

If you are applying for a VA Loan (Military Veterans), make sure to include:
∙ DD214
∙ VA Disability Award Letter (if applicable)

Step 2: Pair up with a reputable, flexible and solid lender

Most people don’t realize the severity of this component of the home buying process, but the lender you decide to use to physically get a mortgage with is more important than the house that you decide to build or buy.

The reason that this is always the case is that, unless you are buying cash of course, your lender is the most influential participant in the transaction involved in purchasing your home. You may be more than qualified to buy a home in terms of credit and income, but if your lender or the loan officer that represents them is not an all-star at making certain every “i” is dotted and every “t” is crossed, their mistakes can cost you your opportunity to buy the home.

If you are buying something new, don’t make the mistake of waiting to get pre-approved until after you’ve found the perfect neighborhood. Start the process beforehand. This is something you can start while you’re still searching homes for sale Tampa FL. There is no shortage of great companies who can make certain that you’re financing is solid! Just because you qualify with one lender does not obligate you to using them.

The biggest reason that you need a flexible lender if you’re buying something new is because most home building companies have their own lending companies that they use in order to pass on more incentives to you when you use them to finance your home purchase. Basically, more free stuff.

We’ve developed a relationship with RP Funding, because they understand that they may not be able to compete with the incentives that a home builder offers, but things happen sometimes where the home builder’s financing falls through and they’re happy to be the safety net when that becomes the case. Your local bank may not be as forgiving when you walk away from a loan that they put blood, sweat and tears into lining up.

Step 3: Don’t touch anything!

Once you have a pre-approval in hand from a lender, you’re not in the clear. Pre-approval doesn’t lock you into the loan. Technically speaking, you are not approved for a loan until the day you close on your home. Here are a few specific things to avoid that have to potential to completely sabotage your home buying plans:

∙ Applying for any type of loan in general (auto, boat, student, etc…)
∙ Opening a new credit card
∙ Closing an old credit card
∙ Maxing out a credit card
∙ Paying any credit related bills late
∙ Divorce
∙ Going to jail
∙ Any kind of fraud

Okay so the last three won’t necessarily kill your chances of buying a home as much as be detrimental to the progression of your life in general, but you should get the jest of it with the first four. Basically, if anything on your credit report changes, other than your balances going down, you will need to re-apply and get pre-approved all over again. I’m not saying you can’t put $100 on a credit card in case of emergency, but what I am saying is that if you do decide to max out a 4 digit credit limit or higher, your loan amount is going to change.

Goal 2: House Hunting!

This is everyone’s favorite part, and I don’t mean that sarcastically, when people start wondering

You’ve done the research; you’ve been watching HGTV for 5 solid months. Google’s default search for you is “homes for sale Tampa FL.” You know the filter options on Zillow and Realtor.com like the back of your hand. By all means, at this point, you are ready to go check out the homes on the market that you’ve had your eye on.

Step 1: Make sure what you’re looking at is legit

If you’ve been finding deals left and right online and haven’t really educated yourself on terminology, I’m about to be the bad guy for a second, but it’s for your own protection. Most of the good stuff that you’ve found, especially if you found it on Zillow, is probably incorrect, inaccurate or flat out false. As quickly as I can, I’m going to go over some basic terminology and criteria for you to understand what you’re really looking at, and to keep you from flying blind while you’re searching for homes for sale Tampa FL.

First, we’re going to go over availability terms:

Active (ACT): Means that the home is being actively marketed and the seller has not accepted an offer on it yet. Make sure that you are only looking at homes that are ACTIVE listings.

Active with Contract (AWC): Means that an offer has been accepted orally by all parties and they are waiting for paperwork in order to seal the deal. You can still make an offer as a backup in case it falls through, but chances are that it won’t.

Pending (PND): Means that an offer has been accepted and signed by all parties, they’re in the process of having inspections and appraisals performed in order to make certain that the house is currently in an acceptable condition, and has the dollar value of the offer in its current state.

Sold (SLD): Means you missed out, this can feel like a punch in the gut if was the perfect home in your mind. But don’t get stuck on it, get back out there and find another. The home that’s right you is always out there!

Next we’re going to review what’s referred to as “special sale” provisions:

Short Sale: This is the one time that I tell you what to do rather than educating you and allowing you to make your own decision. STAY AWAY FROM SHORT SALES!! I absolutely despise the short sale process if you couldn’t tell. Just for kicks, I will explain it to you so you know why I hate them as much as I do. I highly discourage people searching homes for sale Tampa FL from doing this.

Alright, so a short sale happens when someone buys a home, and at some point the home takes a drastic dive in value. Obviously the owner knows that he can’t sell the home for what it’s worth, but unfortunately he still has to make mortgage payments. At this point, the owner has three options: keep making payments until the value of the home rises, walk away from the loan completely, or try and convince the bank to allow him to sell the home for less (short) than what he owes on it.

In order to actually Short Sell a home, the owner needs to present the bank with something called a “short sale package.” This package is made up of offers that home buyers have made on the home in question over the past 6 months usually, sometimes longer. At this point the bank tells the owner whether or not they will be allowed to sell the home for a price less than what they owe on the loan.

This is the biggest reason that I absolutely loathe Short Sale properties. You can absolutely fall in love with a home that the owner is trying to Short Sale make an offer on it with 20 other people, and you won’t know if the owner is even allowed to sell their home for possibly 6 months down the road. Even if they are allowed to sell it, you won’t know if your offer is the best until they submit the package to the bank.

Sometimes, short sales are great though. There are three magic words that make a Short Sale property worthwhile. These words are “Bank Approved Price.”

REO/ Bank Owned: To begin with, REO stands for Real Estate Owned. It’s a term that we use to describe when a lender or bank owns a property. This is what most people refer to as ‘foreclosed home.’ I personally am a big fan of REO properties. Virtually every single one is priced realistic, and it’s not difficult to find one that is an absolute steal.

In your search for homes for sale Tampa FL, the best resource to use in order to find foreclosed properties is Fannie Mae’s HomePath website.

When I got started in real estate, I made my living on selling foreclosed homes to home buyers I worked with. Foreclosure homes are great if you already know what you’re getting into with home ownership, but if you’re new to home ownership, you can get a great deal, but you may not be prepared to handle it.

Foreclosed homes, in most cases, aren’t in tip-top shape. They usually need new carpet, they haven’t been cleaned, and usually they have at least one major issue. Whether it be the A/C, or the roof, or a pool leak. Like resale homes, they all need help in one way or another, but typically, foreclosed homes need a bit more attention. If you’re prepared to handle it though, you’ll make out like a bandit on the price.

The reason that banks generally won’t fix these issues is because they don’t want to spend the money. They have no emotional connection to the home so all they want is to get their money back. Good news is they know that they have to throw the house on the market at a killer price in order to sell it quickly. Bad news is, unless there are extenuating circumstances, they will not budge on the asking price. Not anytime soon at least.

At the end of the day, the physical process of buying a foreclosed home isn’t that much different than buying something that’s resale. The biggest difference is that the entire process is conducted more professionally to begin with. I personally favor bank owned properties because you don’t have to deal with emotional sellers who are absolutely unwilling to be realistic about how much their home is actually worth.

None: This is the category that most resale properties fall under, as well as new construction homes. They are very direct transactions from owner to buyer, and they are the most common type of purchase in real estate.

Step 2: Organize

As a general rule of thumb, when you’re looking at homes for sale Tampa FL, make certain that you save the ones that you like. Few things are worse than finding the perfect home and losing it in the shuffle.

Also make certain that you keep in mind that you’re not looking at a home that has sink hole history, or is currently a short sale property (since most people don’t have time to wait six months to hear the word “no”). Also make certain the property you’re interested in is actually for sale.

The best way to do that is cross check with various sites, not just trusting what you see on one. My favorite site to use to verify the status on homes for sale Tampa FL is myfloridahomesmls.com. This website is directly connected to the back end website that Realtors® literally pay thousands of dollars per year to have access to. It is by no means is the most user friendly or the best by any standard, it is however the most accurate.

Step 3: Practice calculating a REAL mortgage payment

In your search for homes for sale Tampa FL make sure you’re taking into account things like, taxes, HOA and CDD fees, as you organize your options. Differences in these parts of your mortgage can drastically effect your mortgage payment. Therefore affecting how much home you might be Pre-Approved to buy.

Step 4: Go and see

We’ve talked about what to watch out for in your online shopping, but what do you physically have to do to see the inside? Good news is that if you’re looking at a new home that’s on the market (industry term is inventory home), you can just go to the model home center and ask see it. You don’t need a Realtor® to open it up for you or anything, but you will need one if you want to get a deal on it though.

If you do go and see one, the sales associate is likely going to accompany you, we’re more than capable of arranging a qualified professional to join you as well in order to make certain that you’re given all the information pertaining to the home that you’re interested in and certain “surprises” come up later.

We believe that most people are capable of asking questions relating to on their own situation perfectly fine. But we always want to make certain that you have someone to reach out to in order to verify the information that you’re being given in your homes for sale Tampa FL search.

So if you ever visit a model home, here are 11 great questions to ask any Sales Associate. Knowing the answers to these can help you prevent the biggest surprises that people who don’t do this day in and day out are usually caught off guard with.

If you’re interested in a resale home that’s on the market, you need to get in touch with a buyer’s agent. Buyer’s agents are skilled negotiators, they know what things to look for that may clash with your financing (some mortgage requirements have standards they require for resale homes). A good buyer’s agent will be able to save you more time and money than they will make on their commission.

Speaking of commissions, when you buy a house, unless it’s for sale by owner, the commission for both the buyer and the seller’s agents are already figured into the listing price and cannot be negotiated out. If you show up without a buyer’s agent you won’t be saving any money because the selling agent will be able to pocket their commission as well.

Real Estate is a very regulated industry, so the same applies to new homes as well. The home builder in a new neighborhood would be considered the ‘listing agent’ and the commission for the sale is built into the price of the home. If you show up without a buyer’s agent representing you, they will just pocket their commission and you won’t get anything out of it.

A good buyer’s agent who knows the new home business will be able to put the squeeze on a new home builder in order to get the most out of them in terms of the specific incentives, freebees and price cuts that they normally offer when they want to make a deal. Most of them won’t offer those kind of incentives to anyone who walks in the door, but every once in a while you run into a sales associate on the home builder side who will throw all their cards on the table all at once. Those are the people we do business with.

That is the kind of information that we hunt down for you, and it’s the type of information that you’ll never find just searching homes for sale Tampa FL.

Step 5: Make an offer

You’ll know for certain when you find the right home. Everything will just feel right about it. Make certain that when you make an offer you check to see what similar homes in the neighborhood have been selling for and adjust your offer accordingly.

I’m not going to teach you negotiating theory here, resale homes are all different because you deal with different people who all have slightly different tactics. Foreclosed homes are the only ones that are pretty straight forward.

Other than that, the only rule of thumb that stands true for negotiating in any circumstance is the following. Do your best to be fair and get a deal at the same time. You will likely require a favor from the person that you’re buying your home from in the future, so don’t frustrate them upfront or they will take advantage of you when they have the upper hand later.

If you’re buying a new home that is a quick move-in (inventory home), you can definitely make an offer below the listed price of the home, and I always encourage it. These are the people you can low ball, but that doesn’t mean that they have to accept your lowball offer either.

Rule of thumb when it comes to making offers on inventory homes is that the more houses that they’re selling in a neighborhood, the less willing they are to make a deal. If a home builder is selling two or more homes a month in a neighborhood, they really won’t negotiate, because they’re reasonably certain that someone else will come in and buy it. So from their perspective, it’s worth it to wait for an offer that’s close to asking price, or wait for someone who doesn’t know any better to offer full asking price.

You can discover how well a neighborhood is selling by looking at the neighborhood on myfloridahomesmls.com  and selecting the filter that says sold homes under the options tab. Once you zoom in on the neighborhood you should be able to tell how many homes the builder you’re interested in has sold in the last 6 months. This will give you an idea on how many homes they’ve sold per month and how much their willing to negotiate on price if at all.

Goal 3: Completing Your Purchase/Home Build

Now is when the real work begins. No more searching homes for sale Tampa FL. This is where owning your dream home begins to turn into reality.

This is the most mysterious part of the process for most people because it is when the physical process occurs where everything is prepared for you to take physical ownership of the home.

In the resale world, it looks something like the following steps. I’ll go through how buying new varies.:

Step 1: Acceptance of offer

Once both the buyer and the seller come to agreeable terms for what they believe is fair. It’s all going to get put in black and white. Remember that this is the last stop for the freebie train. If you’re going to ask for anything extra, you must do it before you sign. If you ask after the signatures are on paper, they’re going to say no because you are legally obligated to purchase the home on the terms that you already agreed to at this point.

Step 2: Deposit

In the resale world we have several names for this. Some people call it a deposit, some call it earnest money, I’ve heard it referenced as earnest money or an escrow deposit as well.

Call it whatever you want. It’s typically due within three days of an executed (signed by all parties) contract, and traditionally is 1% of the purchase price. This deposit contributes to your down payment and closing costs later at closing.

FYI, for a brand new to-be-built home, you should expect to bring around $15,000 for a deposit. This is the standard for most home builders. This number is also negotiable if you genuinely can’t provide it. But as a rule of thumb, if the neighborhood starts above the $300’s expect this at some point. Don’t forget that this money acts as a credit to build your home and is pretty much like paying your down payment early, so if you overpay at all, they reimburse you.

Step 3: Inspection

Regardless if it’s new or resale, this is the key component of any home purchase. Both new and resale properties have different forms of inspection that are best for them.

With a resale home, you’re going to want to hire an inspector with a stellar reputation. I cannot stress enough to people how important it is to splurge on an inspector, even if you’re pinching pennies, spend the extra money if an inspector is better. A good inspector is going to find the issues with the home that can cost thousands of dollars to repair.

Their job is to make certain that you know all of the issues that are present in the house when you buy it. In any resale home, I promise that there are issues to find. I’ve never seen an inspection that came back completely flawless on a resale home. So expect issues.

Inspection on a brand new home is a whole different animal. Many people buy new homes because they believe that they are worry free, which is true for the most part. Which is all the more reason to hire a state-licensed home inspector to comb through your house as it’s being built, or once it’s completed. They’re like your savvy uncle who you always bring with you when you buy a car, they pop open the hood and make sure everything is where it’s supposed to be and works as it should. We believe that what homebuyers need the most is protection from errors that can occur when a home is built.

They also need someone on their side who can make certain that they’re not taken advantage of or having the wool pulled over their eyes. This is what our Property Process Management system was designed to handle, and for new home buyers, it’s the best way to make certain that someone is looking out for you. Giving you all the inside information that most people wouldn’t expect you to know.

Step 4: Appraisal

This is the part where the bank that’s giving you the loan makes certain that the house they’re selling you is worth the price that they sold it to you for. If it’s not, you don’t have to buy it and you can get your deposit back. Easy peasy.

Step 5: Municipal Lien Search

This only applies if you’re buying resale. When you’re buying a home from someone the Title Company does a background check on the property to make certain that the person who is selling you the home has the legal right to do so. Part of this includes making certain that the owner has paid their taxes and doesn’t owe the city, county or the state anything that they could turn around and take their home for.

For example, if the city cuts the grass because the yard is getting unsightly, in addition to the fine there is a bill that must be paid. If they are not paid, the city will have the legal right to put a lein on the property and take it from the owner.

Honestly, there is only a one in a million chance of this scenario playing out, but this is where the Title Company makes sure that you’re not that one in a million chance.

Step 6: Survey

A survey is a map that tells you the legal boundaries of your property to the exact point. If there isn’t a current survey, you will need to have one ordered at this point.

Step 7: HUD-1

The HUD-1 is the final piece of the puzzle that tells you exactly what you need to bring to the closing table, down to the penny. This is as official as it gets. Your loan officer is the one who can explain what every fact and figure means on this document.

Make certain that you find out about every single number that is on here. You may not put these together for a living but you certainly can tell when things do or do not make sense. A good loan officer will be more than willing to go through this with you with a fine tooth comb to make certain that everything makes the right amount of sense for you.

If you were smart and got a Good Faith Estimate before you made an offer on the home, these numbers won’t be a shock to you. If you waited till now to wonder what your closing costs are going to be, you’re brace yourself for some sticker shock my friend.

Goal Four: Final Walk-Through & Closing

Closing is what we refer to as the day that you take physical ownership of the house. It’s when you make the physical payment of your closing costs and your down payment. You also sign a mountain of paperwork so get ready to sit down and practice your signature a few times the day before if you don’t use it much.

The final walk-through happens the day of closing, or at least I prefer to do a final walk-through on the day of closing, sometimes you will need to do it the day before. Every situation is a little bit different, but if you are able to do it the day of closing, that’s when you’ll want to do it.

We do the final walk through because we want to make sure that the house is in the same condition that it was when you signed the contract. Other than furniture, everything should be the same unless otherwise agreed to beforehand. Also, you want to make certain that the house hasn’t been broken into or damaged in a major way seeing as this is your final opportunity to walk away before it becomes your responsibility.

Once you’re done walking through the home, you head over to the title company, you sign all the paperwork, and that’s when you get your keys and banda-bing-bada-boom, you are the newest home owner in your zip code! Piece of cake right?

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