Besides the usual bullet points of price, closing date, contingencies and specific contract form, buyers need to realize the impact of offer swerves like including non-listed items. I see offers fail far too often because a buyer included items that the seller did not want to sell and had not included in the listing. This ranges from all the furniture to just a washing machine. It doesn't matter that you really like the leather sofa. If the seller doesn't want to sell it, you may very well fail to purchase this condo unit that is otherwise perfect for your family. There are several big furniture stores right across the river on US 1. Don't let a house-hunt devolve into a bargain furniture-hunting mission.
There are two standard purchase offer contracts in common usage in our area, the FAR-BAR "As-Is" and the standard FAR which calls for seller-paid repairs of 1.5% of contract price for "warranted items" and another 1.5% for repair for damage caused by wood-destroying organisms (unless deleted or limited). Given two identical offers made at the same time on the two contracts, the As-Is would likely win every time. Same is true for cash versus mortgage and quick closing vs. long close.
Buyers, when preparing your offers, try to keep them as clean as possible and remove any friction-causing details for the seller when possible. Don't let insignificant details become more important than the deal. That kid's Ferrari bed may be cute but don't let it delay the negotiations. The next couple through the door may offer the same amount sans the bed while you're still playing hardball over a $300 piece of furniture. Keep your eye on the ball.
Photo at the top is south Cocoa Beach midday March 1, 2014. Today looks to be a repeat. The cobia have arrived and we put a 54 pounder in the boat last Sunday.
"In real estate, national averages paper over the gritty details on the ground and are a crummy, often contradictory indicator as to what is happening in specific metro areas." ___Wolf Richter
Hi Larry
ReplyDeleteI am a Canadian Realtor & Small time Florida Real Estate Investor who has been reading your Blog since 2006 or 2007.I really do not know what prompted me to post this but here I go!!
I enjoy reading your comments...I find you to be very insiteful and extremely accurate about the Business of Buying and Selling Real Estate! I have a US Attorney and a US International Accountant and a Local Space Coast Realtor that I have done all my Condo Purchases with, both as MLS listings as well as Non MLS Listings....regardless I always use my trusted Local Realtor and She has NEVER steered me wrong!!
This particular Blog is probably an example of how SMART she really was to avoid buying anything But the Condo and what was included in the listing....I am sure I won many of the deals because she gently SLAPPED me into the reality of BUYING THE CONDO not the little stuff that emotions can PLACE in the middle of a very great OFFER!
That is why Realtors MATTER!!
As a Canadian or "Intrenational Buyer" My realtor also advised me (Correctly) to seek out a US Attorney to set up the right kind of "Flow Thru Entity" so that I was well positioned and protected so that US tax Filing and Estate issues were dealt with beneficially (as US Estate laws are very different in United States than they are here in Canada).
AlSO as you are aware, many" International" and specifically Canadian Investors get very scared to Invest in Florida Real Estate because of stories they here about the 10% US Witholding Tax on Foreign Sellers of Florida Real Estate....However ....If you hired a US Licenced International Accountant you would know that Yes they do hold back 10 percent of the SALE PRICE...BUT THE FOREIGN Seller can have his or her US Accountant fill out the necessary paperwork to get that Holdback reduced to the marginal Tax Rate... (In my case the 6 Condos that I owned were all being improved and renovated and therefore my Marginal Tax Rate was such that I received ALL of the $22,500 dollars back within 3 months of the closing date!!!)
Some Canadians and international Sellers LOSE THER ENTIRE holdback amount because they either do not file for it within 2 years ,OR ,they time out because they do not have the guidance from an expert to do the paperwork properly and ON TIME !!!
Larry.....you really do a great job keeping your eye on the Real Estate BALL in the Spacecoast area Specifically Cocoa Beach and Cape Canaveral!!!
I am sure there are many more people like me who faithfully read your Blog!
Keep up the GREAT WORK!!!
You really should gather all your Blogs and Write a Book !!
Hi Wayne,
DeleteVery interested in your comments as I am also a Foreign Investor (UK Based) owning multiple units in Cape Canaveral Area. I dont yet have an International Tax accountant on board but I think I maybe I should appoint one just in case I decide to buy some more or sell something. Can you recommend who you use or point me in the right direction ?
Best Regards
Thank you for the kind words. Also, for the reminder to non-US citizens contemplating selling their US property. The withholding is often misunderstood. It is not a tax, merely an amount that is held to cover any tax liability. Often no tax is due and the entire amount is refunded. Foreign sellers, consult your accountant.
ReplyDeleteI purchased a condo in Cocoa Beach a year ago as my 'retirement plan'. Larry and his associates guided me through the entire process. I could never have done it on my own. Because I was able to secure a 'smoking' deal', I have been busy renovating.....almost done. The other thing to remember is that you have to look at the potential in the property and realize that if the price is right, there will be money left for improvements. I am from Canada and am able to enjoy my little piece of paradise often.....not to mention escaping the frigid cold at home.
ReplyDelete