5 Questions Every Florida Homebuyer Should Ask Before Making an Offer

I’ve noticed this several times when people come across a home that checks most of the boxes, they become very excited and eager to put in an offer on it. Given today’s market, buyers can often become worried that they’ll miss their chance. Falling in love with the home and excitement can lead buyers to want to run head-long into putting an offer in. But a smart offer recognizes uncertainty, answers all of the questions, and addresses all of the niggling issues before the offer is made. There could be a problem with the home, or there could be an opportunity to negotiate the price down. So step back for a second and think about the nitty-gritty and make sure you’re okay with moving forward before emotions cloud your judgment. Being diligent before you make an offer on a house is more important than you might initially think.

Here are five questions to ask before submitting an offer:

1. What will this home really cost every month?

Often times my clients only think about their estimated principal and interest payment, I like to educate them to think about total monthly housing costs including insurance (make sure you’re getting current rates), association dues(if applicable), property taxes etc. Also, in the event that the home is in a flood zone, has a higher loan to value and so on, you may be required to have mortgage or flood insurance. Make sure you’re aware of all the expenses that come with home ownership. Numbers provided from sellers disclosures are NOT what your going to be paying. Property taxes and insurance premiums are always going to fluctuate due to changes with exemptions, reassessment with change in ownership, policy changes, prior claims etc. I always encourage my buyers to walk away from closing with savings intact for lifestyle changes, vacations, future unexpected maintenance etc.

2. What does the condition require after closing?

Have an inspector show you what to expect after closing. Have you ever been impressed with a house because of its fresh coat of paint or its sparkling floor or even its cute little kitchen only to later find out that it has other issues you’d need to consider in order to buy that house? I’ve been in plenty of houses that were beautiful but just old and on the brink of systems shutting down. So you should make sure your air conditioner is working, the plumbing, electrical, roof age and moisture, windows, appliances, etc. are all in good working order. A good inspector will examine all of these crucial details for you. It saves you from unexpected repair costs in the future. Ask as many questions as you need to in order to gain a clear understanding of any issues. Be confident and stress free as you shop for your new home.

An inspection should be thought of as a planning document: What should be addressed right away? What will be monitored? What should be budgeted for down the road?

Another thing I have run into with deals is renovation/update costs can be more than contractors estimates. Make sure to research other factors as well such as permits, association approval, timing to get materials, having to relocate temporarily, other costs you may not expect until the walls are open, etc. I have been on deals that did not work out because the people involved did not research what to expect up front. Get all your answers before you sign on the dotted line. Better for you to go ahead and get what you need up front so you have control of the situation and your budget.

3. What am I buying from the association as well as the owner?

If you’re purchasing a home that is part of a condominium or homeowner’s association, it’s important to note that you’re also buying into the financial health of the association as well. So looking at the condition of the home is just one aspect of determining if it’s the one. I’ve seen many buyers that overlook association related items before closing escrow. Ask questions about any projects in the works, special assessments, the insurance policy, what rules the association enforces etc. Have your real estate agent request the association’s current operating budget, find out if they have reserve funds, request a copy of the master insurance policy to understand what is/isn’t covered etc. Skim through some board meeting minutes to get a better understanding of how the group makes decisions. All of these items can come back to haunt you in the form of special assessments and expenses you hadn’t planned on down the road. Better to get as complete a picture as you can before you sign on the dotted line.

Understand the process for renting, pets, parking, storage, deliveries, move-in. Understand the process/timeline for association approval for buyers. Some associations even interview potential buyers.

4. Why is the seller moving, and how long has the property been available?

Contracts fall through all the time, and not just for property specific reasons. A buyer’s financing might fall through or there could be inspection/appraisal issues or even just bad timing. I look at listing history (has the price been marked down? Was there a previous contract that expired? How long has it been off the market, etc) as those items can provide some clues as to what type of motivated seller this is. Then, I look at the market, what are similar homes going for and what homes have actually sold? Are they fairly priced compared to the market? Why are they selling? Those can give clues as to what type of timing they’re hoping for. Has it been on the market forever? Why? Look at the whole history of a home and you’ll be in a better position to make an offer, instead of reacting to an asking price.

Days on market is not always a strike against a property on its own. However, it’s helpful to get the full story. Understand the seller’s situation, timeline, priorities.

5. What stays, what goes, and what must the contract say?

Get specific. Especially with personal property. Write it down in the contract.

Be sure to understand your team’s recommendations about inspections, third-party items to be completed before closing. Be sure to discuss contingencies. Ask your agent about comparable contracts/terms in the immediate area.

Be sure to have your lender, inspector, contractor, insurance professional, agent, title company/attorney all communicate about the items that need to happen before closing.

One final question: Would this property work on an ordinary Tuesday?

You’ve seen a lot of homes and it’s tiring. Find the home that makes sense practically. Get excited about living there for years to come.

Build a small before-offer file

Before offering, gather the following, as applicable: insurance quote, renovation quote(s), association documents, lender approval. You’ll thank yourself later.

Run the complete monthly numbers

We have all seen it happen. Buyers fall in love with the perfect Florida home only to discover hidden costs that sink them financially after closing. Buyers need to know their monthly payments before making an offer.

Before you make an offer, get an insurance quote. If you are buying into an association, find out what fees are required and whether there are assessments. Have your lender run preliminary numbers so you can be certain of the total cash required at closing.

Price the work the home needs

Before making an offer on any Florida home, find out if you can afford any required maintenance or repair. Get your inspector and/or contractor to estimate the cost of fixing or replacing things such as roofs, air conditioning units and other problems. Remember: It’s more than just paint and flowers.

Read the association records

Before offering on a condo or townhome in South Florida, be sure to have someone explain the association’s governing documents and finances. Find out if there are assessments. If you need to apply to live there, make sure you have all of the association’s requirements.

Use the listing history in negotiations

Before offering on a Florida property, try to find out why the seller wants to move. Understand that each seller has his/her own priorities, so learn how flexible each seller is. Find out how long the home has been listed.

If it has been on the market a while, either you might get a better deal or the seller’s original asking price was unrealistic. Either way, you’ll be armed with important negotiation info.

Put every included item and deadline in writing

Before offering, make sure to list everything included in the sale. Assume nothing will stay unless it’s in writing. Appliances, window treatments, light fixtures, garage door openers, satellite dishes, cable equipment, shelving, blinds, shutters, curtains, entertainment centers, garage storage, assigned parking, alarm system, irrigation controllers, key fobs, pool toys, window A/C units, patio heaters, etc.

Be specific. Have your agent or closing attorney explain anything you don’t understand before signing. Be sure to include dates, repairs, credits, contingencies, etc.

Remember: There’s nothing binding about being friendly.

Imagine an ordinary Tuesday in the home

It can be easy to lose perspective when viewing lots of properties. Take your time and imagine living there. Think about carrying in the groceries, making calls from work, entertaining friends and family, washing dishes and clothes, commuting to/from school and work, caring for children/pets, finding parking, listening to street noises, moving from your car into the kitchen, climbing stairs, letting in the mailman and absorbing the amount of daylight in different rooms at various times.

Think about storage space and parking. Imagine how it will feel to live there, not just how it looks. Visit twice at least, write down your notes right away and remember to answer these questions:

Ask about insurance before you ask about price

This happens more often than I’d like in Florida. The purchase price of a home is not the entire story when it comes to monthly costs associated with home ownership and many buyers find that their costs are higher than they had anticipated. This is another reason that I suggest to my buyers that we get a handle on an insurance estimate before we firm up on a price to offer on the home. It will save you some time and headaches.

I contact the buyer’s insurance agent and request that she take a look at the property (type of construction, age of roof) etc. and get me a general idea of what it will cost to insure the home. Next, we also have to take into account if the home needs a separate flood policy and add that in as well. Now we have the tax estimate and any association dues to add in as well. This way we know if we can really afford the home and if the number we have been using to compare properties is really a viable number when looking at that address.

Depending on the quote we may then offer a bit less knowing that our insurance will be more, ask that the seller repair the roof or walk away before offering and risking the loss of a deposit. Older homes can be more difficult to insure with some insurance companies not wanting to cover them no matter what. Some insurance companies will shy away from homes with older roofs, older panels or older plumbing. It’s best for all concerned to find out beforehand what our true costs will be so we can make the best decisions.

Decide your walk-away number before you write the offer

How many times have I heard from a buyer that they stayed over budget because they were tired of looking and hoped the seller would accept their offer?

Too many. And because they were exhausted from the search and process they gladly paid another ten thousand dollars or more and were relieved the nightmare of house hunting was over. Only later did they wish they hadn’t stretched their budget.

Because of this, before I work with a buyer on their offer, they must decide (at the kitchen table, with a calm head) not only the amount they’d love to purchase the home for but the walk-away amount as well. I write that number at the top of my offer summary sheet so as we are working through any negotiations we know exactly where reality is and where we’d like to be.

I’d urge you to do the same. Decisions made with emotions running high aren’t always the best decisions. Have a plan ahead of time and include any possible repair costs from the inspection and think about how much money you’d like to have left over after closing costs. Too often these additional costs get left out until after closing. Then if the seller does counter for an amount over your walk-away amount, it makes saying no an easy decision. No drawn out conversations or trying to talk them into lowering their price. You know your number and that’s that.

The deadlines you agree to when the offer is accepted

Another important aspect of the contract is to keep track of all of the dates and deadlines. Once your offer has been accepted there are actually several timelines that need to be kept track of prior to closing. There are deadlines for most of the contingencies included in your contract, and there may be consequences if they aren’t met. Typically your deposit is due within a couple of days of signing the contract. You have a set amount of contract days to do your inspections so plan accordingly. Getting a loan has a whole other set of timelines associated with it. So does getting an appraisal. If you’re purchasing a condo there are yet other timelines to consider. I make a calendar on contract execution of all of the dates, share it with my buyer as well as the closing agent and lender, and we work from there. It’s very easy to overlook something when you have so many balls in the air so to speak. Sometimes circumstances happen that make it necessary to have an extension on some deadlines. This is typically requested in writing before not after the deadline has passed, so keep that in mind. Depending on what is written in your contract missing a deadline can mean you lose your right to cancel or even lose your deposit so read up on that or call your lawyer if you have questions. There’s so much that goes on after contract execution but just being aware of the basics will go a long way toward a less stressful process.

Turn the notes into a one-page offer summary

Gather the property sheet, the seller’s disclosures, the association documents, an estimate of insurance and a preliminary idea of what you’ll be paying each month from your lender.

Write down each property’s address and the day you viewed it so you won’t confuse homes, especially when they’re alike.

Think of what you loved and any compromises. Categorize these compromises as inconveniences , expenses that will cost more money to address and/or impediments that will negatively affect everyday use.

Create a one-page summary of the property’s positives/negatives, your compromises, things you’re unsure of , estimated monthly costs and repairs. Include the amount of cash you’ll need to close and answer these questions before submitting an offer: What must you know before offering? What can wait to be learned during the due diligence (contingency) period?

Finally, read through the offer twice, once from the seller’s perspective and once from your perspective. Be certain you understand the offer without emotion. From the seller’s viewpoint, ask: Is this offer competitive?

Are the buyer’s intentions clear? From the buyer’s side, ask: How much will we pay and when? Are we comfortable with the proposed timeline and contingencies?

Do we know what happens next? Can we accept the offer’s level of risk? When you’re confident that all of the answers make sense, breathe deeply and submit your offer.

Good luck!