Top 10 Mistakes Buyers Make When Buying a Palm Beach County Property
Buying a home in Palm Beach County can be a very exciting exercise for a home buyer. It can also be frightening because of the pitfalls involved in the procedure. Thankfully, you can avoid these common mistakes committed by many first-time home buyers if you are aware of these mistakes.
1. Not utilizing services of an attorney during closing
Many buyers, when buying Palm Beach County property, think that they are covered and protected as they have a reliable real estate agent on their side. Remember that the job of a real estate agent is to find a home not to check and complete legal formalities. This is where the role of a qualified attorney comes into picture. Also, the fee of your agent is usually paid out of the proceeds and not comes out of your pocket. Your attorney not only looks at the agreement between you and the seller from legal point of view but also safeguards your interests. Hire an independent attorney and not the one recommended by your agent or the seller. This professional will check if all the documents are in accordance with the provisions of the law at the time of closing. You can have total peace of mind when you are represented by an experienced attorney when buying a Palm Beach Property. By law, you are not required to hire the services of an attorney at the time of closing in the state of Florida. But having an experienced attorney by your side at the time of closing when buying a property makes you comfortable as you know there is a professional safeguarding your interests. He also expedites the process of closing and completes it in a smooth and hassle-free manner.
2. Overlooking problems with mold and cost of remediation
Mold is a big problem in homes in entire Florida. Mold thrives in warm and damp places and the climate in Palm Beach County presents ideal conditions for mold to develop and grow fast. High humidity is one reason why mold is such a big problem inPalm Beach County properties. Even if you and your family members are not allergic to mold, it is prudent to get the property properly inspected for the presence of mold. Mold can create breathing problems for your family and it can prove to be potentially hazardous for the health of your family. Mold remediation can be a costly and time-consuming affair. It is in your interest to either avoid buying a property infested with mold or negotiate with the owner to lower the asking price.
Some buyers skip home inspection just because they like to save their money that is paid in the form of fee to an independent professional. The cost of a home inspection in Palm Beach County can range from $300-$500 depending upon the size of the property and what is included in this inspection. Imagine the kind of risk these home buyers are ready to take just to save small amount of money. There are also buyers who would like to believe the words of their seller who says that the property is fine and there are no issues with it. Do not make this mistake as the seemingly beautiful house may turn out to be a headache for you in future as you discover various problems with it.
A home inspection, when done properly by a professional, can reveal problems that can take thousands of dollars to fix. But once you buy the house and move in, you cannot ask for compensation form the seller. If you skipped home inspection and now see mold growing at a rapid rate inside the home, it is you who must spend money on its remediation.
3. Not doing due diligence at the time of title search
The tile of the property you are buying in Palm Beach County is just as important as the structure. You worked hard to find a beautiful home in the area through Palm Beach property search. Now you must see to it that the seller has the full and clear ownership rights to the property so that these rights can be transferred to you without any problems. Title insurance and title search costs are paid by the seller in Palm Beach County. As such, you should not ignore this very important aspect of buying a home as it can have long term legal repercussions for you. Buyers not paying attention at the time of title search can pay dearly later when someone else lays claim to the tile of the property in future. Title search involves verification of title ownership records. These documents prove that your seller legally owns the title of the property and has the rights to sell the property to you.
Your lender in Palm Beach County asks you for a title search and title insurance to safeguard his money. This is because he holds the mortgage for a long duration and he doesn’t want to find out that the property does not have a clear title. Your ender cannot afford to lose on his investment because of defects or clouds in the title of the property.
4. Not reading covenants for HOA
If you have decided to buy a house in Palm Beach County that is a part of a homeowner’s association, you will be subject to the rules in the declaration of CC&R’s. If you do not know every HOA has its own covenants, conditions and restrictions that its residents have to abide with. If the single-family home or the condo you are buying is inside a planned community, you are bound to follow the rules and regulations imposed by your HOA.
When you close escrow, you are made to sign a series of papers, one of which is the CC&R’s. It says that you have read these CC&Rs and agree to abide with them. Violating them in future can result in penalties and forced compliance that you may not like. Many HOA’s restrict the size and type of breed that you can own as a pet. They also have certain covenants in place to restrict residents from renting their units. They do this to preserve the character of the community and to maintain the general comfort level of the residents. There are also terms and conditions about the usage of common properties that you may not like as a resident. It is therefore advisable to get a copy of the CC&Rs and go through the document to know what is allowed and what is not permissible once you become the owner of a Palm Beach County property. Do not leave it up to the discretion of your attorney as he may not be aware of your likes and dislikes in this regard.
Buying a Palm Beach County property in a wrong community can be a big mistake. You can do nothing but repent on your decision. This is where a knowledgeable real estate agent can help you when conducting your Palm Beach property search. Once you make clear your likings and requirements, he will avoid showing you properties in communities where you can face a problem because of HOA covenants. Yes, you can save hundreds of dollars by skipping home inspection at the time of buying a property in Palm Beach County. But you could end up paying not hundreds but even thousands of dollars if a big structural issue is identified after moving in.
5. Not getting preapproved for mortgage
This is another big mistake committed by many buyers in Palm Beach County. These buyers are confident about their ability to secure a loan from a lender as they think they have a good credit and have decent monthly income. These buyers start their house hunt and even sign the agreement with the owner of the property to close the deal in certain number of days. It is only later that they find that lenders are not giving them the amount required to fund their purchase. For example, if the agreement has been signed with the purchase price mentioned as $400000 and the lender is only approving a mortgage loan of $300000, the buyer has to fill the gap and arrange $60000 over and above 10% down payment that he has saved in his bank account.
This can be a very embarrassing situation for the buyer and if he cannot arrange the money in time, the agreement lapses, and he even forfeits the deposit he has paid to the owner of the property. To avoid being caught in such a situation when buying a property in Palm Beach County, it is necessary to get preapproval for a loan form a lender. This gives you a clear idea of amount of money that the bank is willing to finance for the purchase of a property.
6. Not looking at credit
If you are desirous of buying a house in Palm Beach County, you know you need help from a lender to finance your purchase. The first thing that most lenders in Palm Beach County look at is the credit report of the applicant. Your application can be rejected by the lenders even if you are earning a decent monthly income if your credit score is below average. Many buyers make the cardinal sin of approaching lenders when they have a poor credit score. Their application is rejected as banks cannot take a risk on investing on a person who they consider as untrustworthy. This is the reason you should desist from approaching a lender if your credit score is low. You should work hard to improve your credit so that it becomes acceptable to lenders. You can always conduct your Palm Beach County property search later.
Even with an average credit score, banks will give you a rate of mortgage higher than what they provide to borrowers with excellent credit score. This can make you pay a lot more for a property than you would if you are charged a lower rate of interest. It will also mean that your monthly repayments will be much higher, making the loan very costly for you. This is the reason why you should first work on your credit and only then approach a bank for a mortgage loan.
7. Placing faith on mortgage information available online
First time homebuyers in Palm Beach County, like in other parts of the country, rely too much on whatever mortgage information that is available online to them. They have gone through these terms and conditions many times and they become overconfident about their financing. They do their financial calculation about money that they can secure from a bank for the purchase of a Palm Beach County property. But things happen a little bit differently in the real world and these Millennials understand this fact in a bitter manner.
Of course, you are entitled to all the free information available on the net from banks and mortgage brokers but you should not believe this information in Toto. Remember, information on internet is for general information purpose only. You need to seek clarification from the bank to confirm whether the rule applies in your case or not. Many buyers in Palm Beach County get a rude shock when they are told that they cannot get a particular rate of interest or a certain amount of money as mortgage.
The problem with information on the net is that readers accept it on their face value. You should contact lenders and have a face to face chat with loan officers so that you can ask questions and get answers to them.
8. Not anticipating associated costs of buying
This is a very common mistake committed by first time home buyers in Palm Beach County. Many young buyers, in their excitement of having saved money for down payment believe that it is all they need to become the owner of a house. Yes, they will get the mortgage from a lender based upon their credit report and financials, but they need to have extra money in their account to pay for associated costs of buying. In addition to credit report fee, appraisal fee, title insurance fee, Escrow, State tax, and survey fee, there are also property tax and mortgage insurance that the borrower must keep in his mind when calculating the cost of buying a home in Palm Beach County.
Let us understand this through an example. If the Palm Beach County property you are buying is priced at $250000, bank will finance 80% of this price and ask you to pay $50000 as down payment. In addition to this down payment, you require another 2-2.5% of the value of the property to be able to close the deal. Adding everything, the total amount of money needed to close the deal is $55756 in this example.
What this example suggests is that you should be prepared to spend money on closing the deal and you cannot hope to be the owner by just saving down payment in your bank account.
9. Not hiring the services of a real estate agent
There is so much information about home buying available on internet that many home buyers believe they can buy a home on their own. There is no dearth of buyers who believe they can save on the commission that real estate agents charge for helping in buying a home. This is incorrect as the fee of the buyer’s agent comes from the proceeds of the sale and it is the seller who pays the commission of both the agents.
Trying to buy a home without a west Palm Beach real estate agent can be complicated and very tiring. There are many legal formalities to be fulfilled and the entire exercise right from making an offer to closing of deal can prove to be very intimidating if you are a first-time home buyer in Palm Beach County. Therefore, it is very reassuring to have a reliable and experienced realtor by your side all the way through. His knowledge and experience help in removing obstacles from your way. This professional makes the process of buying a Palm Beach County smooth and hassle free.
Searching for a home that suits your requirements and budget in a given community or neighborhood can be a long drawn out procedure. A good quality realtor not only helps in identifying but also negotiates with seller’s agent to lower the asking price. He helps in drafting a brilliant offer so that it is accepted and remains with you till the time deal is finally closed and you can move in your new house. Not taking help from a reliable and honest real estate agent does not save you any money. On the contrary, buying exercise becomes more difficult and nightmarish.
Buying a home can be tough without the help of best quality real estate agent. But when you have best real estate agent helping you, you will find that all your questions are answered and all your requirements in terms of location, features, and even price rage are fulfilled. Here it is important to note that you need to hire an experienced buyer’s agent, not a professional who is mostly handling sale of properties of his clients.
10. Not being ready to make the move
Palm Beach County is a hot housing market with a strong demand from buyers. It is a seller’s market with very tight inventory. Median home prices for single family homes here are $341500. Price per sq foot here is $190 which is less than $218 in Miami-Fort Lauderdale Metro Area. Sellers in Palm Beach County are getting multiple offers form buyers and they are getting over and above their asking price these days. In such a market, it becomes necessary for a buyer to be prepared in all respects. Many buyers try to buy a house in Palm Beach real estate market without homework with the result that they are mostly unsuccessful. If you are really interested, get preapproved and make an irresistible offer to stand out from rest of the buyers.