August 16, 2024

An Attorney’s Top 5 Tips for First-Time Home Buyers in Florida

As experienced real estate attorneys representing multiple lenders, buyers, and sellers in all facets of the transactional process, we recognize the challenges in today’s market, especially for those who have little to know professional experience in the industry. Below, I offer my professional insights to assist the average first-time home buyer with a more streamlined, low-stress home buying experience that safeguards your legal and financial interests throughout the process.

Here are my top tips:

1. Understand Your Financial Situation:

Before diving into the home buying process, have an honest review and assessment of your financial situation and budget. Determine how much you can comfortably afford for an initial down payment on a loan, monthly mortgage payments, upfront closing costs, and ongoing expenses like property taxes and insurance (at a minimum) to understand your buying power and overall ability to purchase a property you want Note: there are several loan options and federal subsidies available that many first-time home buyers qualify for outside the conventional loan options and typical 20% down payment requirements.

2. Do Your Research:

Research real estate websites (such as Zillow or Realtor.com) and attend open houses to get a feel for different properties and neighborhoods. Take note of features you like and dislike, and don’t hesitate to ask questions from the owners or their agents directly. They will have great insight as to the schools, parks, local restaurants, etc. to help make the most of your decision. Additionally, calculate the value (or costs) of listed upgrades and repairs on potential property listings such as new roofs, windows, appliances, plumbing, etc., as they can impact the purchase price greatly from other comparable homes in the neighborhood.

3. Inspect the Property Thoroughly:

Far too often, we see potential buyers fast-track the inspection period or overlook the details, only to have huge liabilities (if not complete regret altogether) after purchasing the home. When under contract, a buyer only has a finite amount of time to initiate the home inspection and review the results of the same. Hire and invest in a professional and exhaustive home inspector to thoroughly evaluate the property for any ongoing issues or potential problems not already apparent or disclosed. This can help you avoid costly surprises down the road.

4. Understand the Legal Implications:

As an attorney, we cannot stress enough the need to hire experienced real estate counsel prior to making one of the largest purchases of your life. There are so many legal implications that a real estate agent simply cannot advise you on during the home buying process that are crucial in real estate transactions. For instance:

Title: Should the deed of title be taken in your name individually? With your spouse? Are you planning on making the property your homestead for tax purposes? Perhaps it should be in a Land Trust or an LLC corporate formation for investment and liability purposes? Are you taking probate into consideration? All of these have meaningful legal implications and should be considered when buying a property.

Mortgage Terms: Do you understand all the provisions on your mortgage? What are the various default provisions and how do they affect my ability to live in the home? Is the amortization schedule beneficial to my family? What happens at the maturity date? When does an adjustable rate change my payments? How are escrow amounts calculated for taxes and insurance? Can I pay off my mortgage early? What restrictions in the mortgage are there on selling the property or refinancing later at a better rate? All of these are legal questions that an attorney can guide you with prior to purchasing.

HOA restrictions: Do you understand the declaration of covenants recorded by the HOA or COA? Have you read or requested the annual meeting minutes or potential assessments being considered? How do the restrictions limit my ability to change landscape, buy cars, paint, etc. in my home? Many first-time home buyers do not fully read the HOA/COA covenants or understand the implications of structural certifications and potential assessments being considered.

Breach: What if the seller decides to walk away during the closing period? What if the inspection comes back with major issues not already disclosed by the sellers, how do we change the contract? What if you need additional time to obtain financing, do I lose my deposit? Trouble arises often when buyers and sellers are “under contract” and undergoing their due diligence, having an attorney at the start of the process can minimize frantic searches for help if/when legal issues arise.

Familiarize yourself with the legal aspects of buying a home, including contracts, disclosures, and potential liabilities. Consider whether you want to work with a traditional real estate agent or a real estate attorney (or even both). More importantly, starting August of 2024, and pursuant to a settlement between the National Association of Realtors (“NAR”) and the Department of Justice, all potential buyers will now be required to contractually agree to compensation prior to showing any potential property.

As the customary fee for a buyer’s agent is 2-3% of the purchase price, it might be financially beneficial to hire an attorney who can negotiate and prepare the initial offer, guide you through the due diligence (or inspection) period, and assist throughout the entire closing at a fraction of the cost.

5. Ask Questions:

Never sign any disclosures, addendums, or agreements without fully understanding what you are executing. Don’t hesitate to ask questions throughout the home buying process and especially the closing (which local processors try to speed through quickly). Whether you’re working with a real estate agent or attorney, always seek clarification on anything you may be unsure about to make informed decisions and to avoid costly regrets later.

By following these tips and asking the right questions, first-time home buyers can navigate the home buying process with confidence and clarity.

How I Can Help

As Chair of Kelley Kronenberg’s Real Estate Division and an AV Preeminent-rated attorney by Martindale-Hubbell, I have dedicated my career to navigating the complex world of real estate law. From representing mortgage servicers and lenders, to home buyers and sellers trying to navigate changes in the wake of the 2024 National Association of Realtors settlement, I have seen how crucial expert legal guidance is to ensuring a successful purchase on almost every type of transaction.

Don’t let the complexities of real estate law stand in your way. Reach out to us for a consultation at 954-370-9970, and let’s discuss how we can leverage our expertise to achieve your real estate goals before you sign with a real estate agent. Your property aspirations deserve nothing less than top-tier, ethically sound legal representation – and that is precisely what we offer.