Ten steps to buying a condo in Miami Florida

Buying a condo in Miami? Not an easy process. Here is my step by step guide:

Step 1 (skip this step if buying cash): Get preapproved by an experienced mortgage banker. Typically this will mean providing 2 pay stubs, 2 bank statements & 2 years worth of tax returns and running a credit report. It is VERY important to not make any unusual deposits or debits from any of your accounts during the mortgage approval process. Also, do not make any large purchases, especially on credit. Doing these types of things will, at best, trigger more conditions and delay your closing or, at worst, cause the lender to decline your mortgage loan application.

Step 2: Execute a contract for sale and purchase. Be sure to include an inspection contingency and a financing contingency in your offer contract. A typical time frame for inspections is 10 days. A typical time frame for a financing contingency is 45 days. A typical time frame for closing is 45 – 60 days if financing or 20-30 days if cash. I highly recommend you instruct your lender with these specific words “my goal is to have the clear to close by my financing contingency deadline”. Read more on this in my article “important things to know about a real estate contract financing contingency”.

Step 3: If you are obtaining financing (even if you aren’t) order a condo questionnaire immediately after entering into a contract. A condo questionnaire is a “make it or break it” document that is required by lender in order to assess the financial and legal standing of any condominium project. This document is given to a buyer by their lender and contains anywhere from 11 to 35 questions for the building to answer. There are two types of condo questionnaires: a full review condo questionnaire and a limited review condo questionnaire.

A buyer needs to obtain a full review condo questionnaire when they purchase a condo with less than 25% down payment. If a buyer is purchasing with 25% or more down payment, they can order a limited review condo questionnaire. I always tell my condo buyers that their lender will not only need to approve them as buyers, but will also need to approve the condo building.

Step 4: Be sure to give any and all required documentation to your mortgage banker as soon as humanly possible. A good mortgage banker will try to have the most complete and seamless file to present to underwriting and any missing or incomplete documents will trigger a new set of conditions which means another review of the file, increasing the chances of even more conditions and requested documentation.

Once the appraisal has been completed and the appraisal report has been delivered, AND assuming the appraisal comes in at or above your contract price (click here for my article on what to do when your appraisal comes in low) you should apply to the condominium association. Most condominium associations take at least 7 business days to approve a new buyer. Therefore you must plan accordingly and apply to the association according to the time frame they give for approval. That time frame may or may not coincide with the timing for the appraisal.

The reason I try to time the association application this way is so that my clients do not spend money needlessly on an association application if they are not past inspections, condo questionnaire, and appraisal. Having said that, it is not always possible to wait until these items are done. Sometimes it is necessary spend the money on these items and the association application at the same time.

Step 5: Be sure to review the condominium documents, the most recent year end financials, frequently asked questions, the rules and regulations, and the budget for the building. In the state of FL, any buyer has 3 days from the time they receive the condo documents to review them and cancel if they are in disagreement with any of the terms. This will help you to avoid pitfalls such as rental restrictions when you are purchasing for investment and want to rent out the unit or pet weight restrictions if you have a large pet or multiple pets. If you are able to, review the budget before doing anything else because if the budget does not have at least 10% in a reserve account, it will be very difficult to get financing.  If you still MUST buy the condo, look into local portfolio loans.

Step 6: Have a local & reputable title company or attorney run a title search and a municipal lien search as well as check on the annual real estate taxes and whether they are up to date. If you are using the seller’s title company, I highly recommend you have an attorney review the title commitment and transfer documents. Be sure the title company orders the estoppel letter from the association in a timely manner so that your closing is not delayed.

Step 7: Have a final walk through of the property prior to closing. I have had clients tell me they don’t have time for this, and in that event, I go perform the final walk through for them because you just never know. If the property has been vandalized or if the tenant took all the appliances or if something died in the crawl space and the property became infested with flies (yes these have happened to me) you want to know BEFORE you close on the property. Things like this can happen in ANY price range and you could regret skipping the walk through. Do a walk through.

Step 8: Go over the Closing Disclosure (formerly known as a HUD 1) as soon as you receive it from your lender.  The federal government passed a law effective October 2015 that requires that all buyers have a 3 day waiting period between receipt of the CD or closing disclosure and the actual closing.  The sooner you receive, understand & approve this document, the sooner your closing can take place.

Step 9: At the time of closing, be sure to bring your association approval and two forms of ID.  Keep a few hard copies of the ALTA Master Settlement Statement as proof of purchase until the deed gets recorded and mailed to you with your title insurance policy.

Step 10: Contact your accountant to go over tax deductible expenses (your mortgage interest is tax deductible, MIP or mortgage insurance premium is tax deductible and real estate taxes are deductible).  Also, be sure to apply for homestead exemption if the newly acquired property is your primary residence.  You can click here to apply for homestead exemption in Miami Dade county. Finally, remember that if you sold a home in Florida before buying this one, you may transfer or “port” some of your homestead exemption savings to the new property.

I hope you found this article informative and helpful.  If you need an experienced and tech savvy agent who knows the Miami market inside and out, you can reach me at paula@greatmiamihomes.com or 786.663.4382.

Paula Barrera Scheer

EWM Realtors

A modern agent for a modern client.

*This article is advice from the first hand experiences of a veteran real estate agent and is not to be construed as legal advice. Real estate agents are not attorneys.  If you are in a real estate transaction and need legal advice, consult with a real estate attorney.

 

Why should I own my home? – A short confessional by a veteran Real Estate agent.

Mrs. Portman is 90 years old. I met Mrs. Portman while I was out showing properties about 10 years ago. She approached me for help finding a rental because her landlord at the time was receiving foreclosure notices at the property Mrs. Portman was living in. Mrs. Portman was paying rent to a landlord who was pocketing the money and defaulting on the mortgage. Mrs. Portman was worried that the bank would foreclose on her landlord and kick her out of her rental.

I helped Mrs. Portman find a small “affordable-by-Miami-standards” one bedroom apartment in a rental community near a grocery store and near my parents who I knew would check in on her. She still had enough money to supplement her $700 a month social security income and pay for her rent and utilities. She did not share with me at the time, exactly how much money she had left in savings to live off of.  I wish she had had the means and desire to purchase a property at the time but she had not.

Mrs. Portman worked as a legal secretary in the best law offices in Miami in the 1950’s – 1980’s and belonged to multiple professional associations and country clubs. She met the Kennedys, Johnny Carson, Barbara Walters and the like. When she divorced, her family home – a 7 bedroom home in Coral Gables, was sold. From that time on, Mrs. Portman rented an apartment. She retired in 1989 with what she thought was enough in savings to supplement her social security income for the rest of her life. She saved 15-20% of her income from each paycheck in the form of savings accounts and CDs. Mrs. Portman decided not to buy a property, but instead, continued to rent. Back in 1989, $700 a month in social security was enough to pay the rent on a nice condo in a good neighborhood, plus utilities. She did not qualify for any help from her spouse’s social security because she had not been married for 9.5 years.

My 2005 Mrs. Portman, still in good health, realized she would outlive her savings. She began trying to apply for senior housing and affordable government housing only to be turned away because she still had some assets (a little bit of cash in the bank). By 2012, two years after I helped her with her request to find a legitimate rental, she told me her situation was getting dire. We began going around to low income housing buildings and trying to apply. She was either told she had too many assets or that the waiting lists were closed/buildings were full. We were given the run-around at every agency we visited. We even drove to one with the correct address on a mailbox in front of an open field. AN OPEN FIELD. Where the government housing agency was supposed to be. We contacted over fifty low income housing sources. It became apparent that no agency would help unless the applicant was on the verge of homelessness or had/was a minor child.

Fast forward to last week (2015), Mrs. Portman had to write her December rent check. This last check wiped out the last of her funds. She had already sold her only valuables (jewelry she wanted to be buried in) and that money also went towards her rent. We, once again, drove from agency to agency, building to building. All of them were full and had a 5-7 year waiting list or closed waiting lists. We visited Social Security, The Housing Authority, The Department of Children and Families… we managed to get help with food, but that would not help with the $400 deficit in housing expense not to mention utilities. Each agency told us that we had to find housing that was within her budget. As a real estate agent in Miami, I can tell you there are NO condos available for under $700 a month. Actually, there was one, and it was in a run-down building in a crime ridden neighborhood. Not a place for a 90 year old lady, or for ANYONE. I then looked in the entire tri-county area. There was ONE other option in an over 55 community in Broward County, but they wouldn’t accept her because she could not prove income of $30,000 a year.

We went to another Housing Authority office to see if they could help. They told us they are only now getting to the waiting lists from 2010 and that the waiting lists are all closed. Section 8 is closed. A waiting list might open next year, but they have to get through the waiting lists from 2010 to 2015 before they even begin considering anyone from a 2016 waiting list. They said “what about a reverse mortgage?” Being a realtor, I know a reverse mortgage is almost never a good idea. In this case a reverse mortgage would have saved the day. 

Except, a reverse mortgage is NOT an option because Mrs. Portman does not own any real estate.

At the end of my rope, I set up a Go Fund Me fundraiser and have raised enough money to buy us a couple of months to find a housemate living arrangement for Mrs. Portman. The idea is to have her living with another elderly female or two – a la “Golden Girls”.

During our wild goose chase of trying to obtain housing assistance from the government for Mrs. Portman, she broke down in tears in the car. She said to me “I don’t know why I am going through this. I saved all my life. I would rather be dead than end up in my 90’s and in this situation.” Then she paused and said, “I think the reason this is happening to me is so I can be an example to you – so you never, ever end up in a situation like this. Be sure to save even more than I did while you are still working. I never want this to happen to YOU dear, and if I can save you the suffering that I am going through, then I understand why God is allowing me to continue to live.” I cried with her for a while.

And then it dawned on me – this is not just a lesson to me, it is a lesson to anyone and everyone I can reach with Mrs. Portman’s story. Own your home. Do not rent – BUY. Buy and keep your property long term. It will ride out any market fluctuations if you keep it long enough. Mrs. Portman bought her home in the 1950’s for about $7,000. That home today would be worth about $1,000,000. Do you think that would have made a difference in her life today?

Before last week, I helped people who WANTED to buy real estate. I helped people who had already decided they wanted to buy a home. Now, I am on a mission to save people from the fate of Mrs. Portman.  If you are reading this, you might be my friend or you may have googled Miami real estate agents. I don’t care who you are – do what you have to do to BUY your home. Then, do what you have to do to PAY IT OFF. Then, hold on to it, rent it if you have to, so that when you are elderly, you have an option of last resort.

A month ago, I viewed my career as a way to make a living. It has its pros and cons. I viewed it as a somewhat fulfilling career that pays the bills. Now, I realize my career is not only about making a living and is not only about my own personal fulfillment, but about helping others make a LIFE and a FUTURE. I have developed a specialized skill set to help as many people as I can get to old age as homeowners. I must pass on Mrs. Portman’s lesson. Do NOT spend your life savings on rent. Own your home. Whether it is with me or with another agent, owning your home is the best thing you can do for your future.  If you’d like to donate to help “Mrs. Portman” please click here to access the Go Fund Me account.

Echo Brickell – New Miami Towers Series

Echo Brickell will be the first of its kind luxury building in the Brickell submarket of Miami. Just south of the Four Seasons Hotel on Brickell, Echo will be one of the tallest most cutting edge buildings to grace our skyline. The wave-like façade of the building ties in perfectly with the futuristic aesthetics of Brickell Citi Centre And other forward thinking architectural “works of art”.  The robotic parking system will make your jaw drop as will the stunning glass enclosed pool deck in the sky!

The address of Echo Brickell condo will be:

1451 Brickell Ave., Miami, FL 33131

Echo Brickell Rendering

Short list of features (there are many more):

-180 luxury condominium residences

-57 stories

– 21 penthouses

– 635 feet tal

– Developer PMG (Property Markets Group)

– Conceptual Design by Carlos Ott

– Interior Design Carlos Ott and Yoo

– Robotic parking

– Architects of Record Cohen, Freedman, Encinosa

– Groundbreaking Spring 2014

– Apple® home technology in all residences

 

UNITS AVAILABLE:

Echo Upper Penthouses: 4 Bedrooms/4.5 Baths + Den + Maid’s Quarters (Carlos Ott Penthouse)

Echo Lower Penthouses : 3 Bedroom / 3.5 Baths + Den + Maid’s Quarters

3 Bedroom/3.5 Baths + Den

3 Bedroom/3.5 Baths

3 Bedrooms/3 Baths

2 Bedrooms/2.5 Baths + Den

2 Bedrooms/2.5 Baths

2 Bedrooms/2 Baths

1 Bedrooms/1.5 Baths

 

I specialize in Miami real estate, in particular Downtown, Brickell, Midtown, Coconut Grove, Coral Gables, South Beach & surrounding areas.  I value technology, communication & your time.  If you would like to meet with me regarding a purchase or sale of Real Estate in Miami, you can contact me on my cell 786-663-4382 or at paula@greatmiamihomes.com.

Greatmiamihomes.com seeks to keep the public informed about Miami real estate market trends, new development projects, neighborhood information and, of course, great homes and condos for sale in Miami!

PAULA BARRERA

A modern agent for the modern client.

786.663.4382

paula@greatmiamihomes.com

 

Market Update on South Coral Gables South of US1 West of Le Jeune and north of Sunset Dr.

One of my clients purchased a 3/2 in this slice of Coral Gables earlier this year and she wanted to know what the market has been doing. When she and her husband purchased, the competition was INCREDIBLE.  There were many offers on the house and the seller had listed with a flat fee broker who only put the property on MLS but had nothing to do with the handling of the transaction.  As a result, this seller would receive an offer, then tell every other buyer what he had received in order to pit the buyers against each other to get the highest offer possible.

Of course, this is completely unethical and no agent would have been allowed to behave in such a way. In the end, after a grueling Sunday afternoon of negotiations, my client prevailed over the other competitive buyers, who, it was rumored, had waited years for a house to come on the market on that street. Of course, we analyzed every house on the market and even wondered, was the offer too high?

Gables Slice
This precious sliver of Coral Gables is known for its quiet streets, prestigious addresses, and stellar school district, not to mention a location convenient to everything!

 

 

 

 

 

 

 

 

 

 

 

Since May of this year, there have been 53 closed sales in this subsection of Coral Gables and there are 9 houses currently under contract.

UNDER CONTRACT:

The least expensive of the pending (under contract homes) is 5626 Granada at $450,000.  To be clear, this was the asking price.  The actual sales price will not be known until the sale closes. This house was marketed as “land value ” with the following description: “As is, sold at land value. Construction has been vandalized and in bad shape. Can not be shown inside due to hazard. No certificate of occupancy.”

The priciest of the currently pending (under contract) homes is 6250 Granada at $1,350,000.  It was only on the market 12 days and went under contract in the MLS today.

CLOSED SALES:

Of the actual closed sales, the priciest was 5724 Riviera Drive for $4,000,000.

The least expensive was 6355 Maynada for $454,350 – this was a distress sale that needed MAJOR rehabbing.

THREE BEDROOM HOMES:

If we look only at 3 bedroom single family homes selling in the area, there were 28 sales from May 2013 to November 2013.

13 of the homes sold for less than $735,000.  These homes were on a single lot (5,000 in Coral Gables is considered a single lot) and/or needed major renovations such as roof, kitchen or bathrooms.

Of the 15 homes that sold for over $735,000, 7 were in my client’s neighborhood, between the Riviera waterway and Le Jeune.

Click here to see the 3 bedroom homes that sold between the Riviera waterway and Le Jeune from May 2013 to the present (November 8, 2013).

540 Gerona sold for $735,000 – while it is remodeled, it makes sense that it sold for this price as it is on a 6,250 Sq Ft lot

444 Miller Rd (definitely a comparable to my client’s home, except it is NOT on a corner lot and lot is smaller) sold for $725,000 unanswered questions would be the condition on inspections and whether there is anything that needs repairing/replacing

444 Marmore (larger than my client’s by 600 Sq Ft according to MLS… it is however on a smaller lot and not a corner lot) sold in July for $799,000.

5725 San Vicente (just four blocks away from my clients) has lovely curb appeal, is remodeled, has a one car garage and is also on a corner lot.  It has no pool but does have room for a pool.  It sold in June for $775,000.

411 Como Avenue (too large to be a comparable) sold for $920,000 in June.

417 Amalfi Ave (on a 5,500 sq ft lot) is newer construction has a one car garage and a pool and sold in July for $905,000.

5801 Riviera (not on the waterfront and too large to be comparable) sold in September for $1,050,000.

In conclusion, my clients did whatever it took to get the house that they wanted. Time and closed sales have shown that the price they paid was right in line with the market.  There is a very high demand for this area, much more so for a corner lot and a pool.  When we were preparing the offer we carefully analyzed all the recent sales and everything on the market and concluded that buying was less expensive than renting even at a price that (at the time) seemed higher than market value.  Turns out, in retrospect, that it was not.

I specialize in Miami Real Estate , in particular Downtown, Brickell, Midtown, Coconut Grove, Coral Gables, South Beach & surrounding areas.  I value technology, communication & your time.  If you would like to meet with me regarding a purchase or sale of Real Estate in Miami, you can contact me on my cell 786-663-4382 or at paula@greatmiamihomes.com.

Greatmiamihomes.com seeks to keep the public informed about Miami real estate market trends , new development projects, neighborhood information and, of course, great homes and condos for sale in Miami!

PAULA BARRERA

A modern agent for the modern client.

786.663.4382

 

 

What’s up with condo financing?

 

I have many clients interested in condos in Miami Beach and the downtown, Midtown & Brickell areas of Miami.  Purchasing a condo in Miami has its challenges because of lending restrictions on buildings.

A gorgeous view from the Icon South Beach courtesy of SEF MLS and listed by Zilbert Properties. List price $3,750,000

If you have 25% or more to put down on a condo, then you are free to look at any building as banks will approve a loan with minimal “review”.  This means, the bank will check YOU out, but they will not ask as many questions about the building you choose to purchase in.

Most of us, however, do not have upwards of a 25% down payment  laying around, therefore, we must apply for a FULLY REVIEWED loan  – meaning the lender has to review the legal and financial standing of the condominium before they will agree to lend.

In order to purchase a condominium with 5% or 10% down (or any percentage down up to 24.9%), a buyer must pay the condominium association of the building he is interested in a fee to get a “full review condo questionnaire” filled out.  This condo questionnaire tells the lender everything they need to know in order to issue a loan approval.

You may have awesome credit, good savings, a great income, etc. and still be denied a loan because of the lender’s building review requirements.

Condo Questionnaires typically ask questions such as:

– number of units rented (hint: Fannie Mae just changed the rules on this one, and if mortgage insurance companies come on board, high rental ratios may not be a reason to decline your loan) It used to be if more than half the building is rented, the loan is a no go… however, this JUST changed the day before yesterday.  Now, if you will live in the unit (if the unit will be OWNER OCCUPIED) the number of rented units in a building does not matter.  Tell that to the mortgage insurance companies, though…. we’ll have to keep an eye on this one!

– does any one person own more than one unit and if so, describe (hint: if any ONE person or entity owns more than 10% of the units in the building the building will not meet lending requirements)

– how many units are 30 days delinquent on maintenance dues? (hint: cannot be more than 15% of units)

– are there any pending special assessments? (hint: as a buyer it is in your best interest to know this before you buy.  I do not know if it would cause the bank to decline or just to further analyze your qualifying criteria – ask your banker. I have an amazing banker if you need one.)

– Is the Condo Association involved in any litigation? (hint: if there is any litigation related to construction defects, the lender may have a problem granting any “reviewed” loan)

– how much does the building have in reserves? (hint: usually lenders are looking for 10% of funds collected to go towards reserves)

– what kind of insurance does the building carry and for what amounts?

usually condo questionnaires have about 35 questions on them, some more important than others.  The ones listed above are the big mamas and are usually the cause of many buyers not being able to purchase with a low down payment.

It is always helpful to work with a real estate agent who knows the buildings and knows to ask these questions before presenting an offer.  I visit the condo association when we visit the unit and attempt to get the “big mama” questions answered in front of my client, rather than have my clients spend $150 on a condo questionnaire on every building they are interested in. Some associations are nice and just tell you flat out, others will not say anything and you must submit a questionnaire and a fee.

The exceptions to this thorough analysis are condos that are Fannie Mae approved.  There are not many in Miami at the moment, but here is a list of the condo buildings that are currently Fannie Mae approved.  These are much easier to get a loan in.

I hope you found this article informative and helpful.  If you need an experienced and tech savvy agent who knows the Miami market inside and out, you can reach me at paula@greatmiamihomes.com or 786.663.4382.

Paula Barrera Scheer

EWM Realtors

A modern agent for a modern client.

*This article is advice from the first hand experiences of a veteran real estate agent and is not to be construed as legal advice. Real estate agents are not attorneys.  If you are in a real estate transaction and need legal advice, consult with a real estate attorney.

 

¡“The Roads” – una joya escondida en Miami!

“The Roads” es un vecindario pequeño y exclusivo en Miami al oeste del distrito financiero de Brickell. Fue desarrollado por Mary Brickell a principios de 1920, y es descrito legalamente como Brickell Hammock en las listas de contribuyentes.

“The Roads” es conocido por sus calles tranquilas e hileras de árboles, su excelente ubicación y su naturaleza histórica.

 

The roads es un vecindario en Miami, FL bordeado por la calle 11 en el norte, la avenida 12 al oeste, la 15 Road en diagonal y expande hasta la "South Miami Avenue".
The roads es un vecindario en Miami, FL bordeado por la calle 11 en el norte, la avenida 12 al oeste, la 15 Road en diagonal y expande hasta la “South Miami Avenue”.

Actualmente existen 26 viviendas en el mercado en esta área con precios comprendidos entre $399.000 y $4.350.000. Usted puede esperar pagar en otro lugar entre $3.000 y $12.000 mensualmente o más por la renta de una vivienda unifamiliar en esta área.

The Roads – a hidden gem of a neighborhood in Miami!

The Roads is a small exclusive neighborhood in Miami just west of the Brickell financial district. It was developed by Mary Brickell in the early1920’s and is still legally described as Brickell Hammock in the tax rolls.

The Roads is known for its peaceful tree-lined streets, prime location and historic nature.

The roads is a neighborhood in Miami, FL bordered by 11th St on the north, 12th Ave on the west, 15th Rd on a slant, and out to South Miami Avenue.
The roads is a neighborhood in Miami, FL bordered by 11th St on the north, 12th Ave on the west, 15th Rd on a slant, and out to South Miami Avenue.

 

There are currently 26 homes on the market in this area with prices ranging from $399,000-$4,350,000. You can expect to shell out anywhere between $3000 – $12,000 a month or more for a single-family home rental in this area.

To read about another sub-market in Coral Gables click here.

I specialize in Miami real estate, in particular Downtown, The Roads, Brickell, Coconut Grove, South Beach & surrounding areas. I value technology, communication & your time. If you would like to meet with me regarding a purchase or sale of Real Estate in Miami, you can contact me on my cell 786-663-4382 or at paula@greatmiamihomes.com.

Greatmiamihomes.com seeks to keep the public informed about Miami real estate market trends, new development projects, neighborhood information and, of course, great homes and condos for sale in Miami!

PAULA BARRERA

A modern agent for the modern client.

786.663.4382

paula@greatmiamihomes.com