Buying a house is a huge investment and can be very overwhelming if you are a first-time buyer. The process of buying a house is not as simple as just knocking on the door and telling the seller you are interested, and there is a very intricate plan that you must follow to properly purchase your next house. If you are a first-time buyer and looking for a house in the South Florida real estate market, it is important to have a real estate agent by your side to walk you through the process. If you do not have a real estate agent when looking for a house you can be limited to your selection of houses for sale in the area. Once you have found your dream house it is then time to move to the next steps of the closing process.
What is escrow?
Now that you have found your dream house, it is time to show the seller that you are interested in making an offer. When going over the contract for your new house the most important things to go over are the terms and conditions of the contract. The most important terms to have on your contract deal with the finance terms, a home inspection, a closing date, and specifics on who will pay the closing costs. Once all of the terms and conditions are agreed upon, the buyer then needs to show interest in the house and sign on the contract. After the contract has been signed by both parties involved, an escrow deposit is then put down. An escrow deposit is essentially an early deposit for your house, which shows the seller you are interested in the house. However, this money is held by a third party representative and cannot be touched by either party involved in the sale. The amount of escrow deposited differs for each deal that is negotiated. It all depends on the relationship between the buyer and seller, and the willingness to move forward with the deal.
If all of the terms and conditions are met after closing, the escrow agent will record the deed and title transfer that make the home officially yours. However, things get interesting if the terms and conditions are not met. Let’s say that you have a home inspection contingency in the terms that must be completed within 30 days of the closing process and escrow deposit. After the house has been inspected, it is brought to your attention that there is mold under the floor and it would take a lot of money to fix it. Since there is a home inspection contingency in the contract, and it was not met, you can get your escrow deposit back as long as it is within 30 days of the closing process. Therefore, if the terms and conditions are not met after closing, the third party escrow agent would have to refund you your money.
How to Protect Your Escrow Deposit
Once you put a good percentage of money into escrow it is important to know that your money is safe. When you deposit your escrow it is held by a third party, so you do not need to worry about your money being taken by the seller. Although a third party is holding your money, you still need to have a clear understanding of all of the information on the contract. There are many contingencies on the contract that you must be aware of to save you money. The three main ways to protect your escrow deposit are by knowing your property, reviewing the property disclosures, and having everything in writing.
The first way to protect your deposit is knowing the condition of your future property. Your contract should always have some sort of inspection in it to ensure that your property is up to date with all of its systems in addition to there being no foundational problems with the house. The inspector will check for multiple items such as the HVAC system, the condition of the pool, and the house’s structure. There will also be specialists that look for specific problems such as an exterminator looking for termites. If there is a problem with the property in your future home, your South Florida home escrow agent can refund you the escrow deposit as long as it is a contingency in the contract.
The next way to ensure that your escrow deposit is safe is by being aware of the property disclosures. Property disclosure is a set of documents that is completed by the seller of a home, listing any known issues with the property and any remodel projects completed during the time they owned the home. Generally, the property disclosure is released prior to signing on the house so the buyer can be aware of the history of the house. If you feel that the disclosure brings up too many issues, you can conduct another inspection of the house to see if it is still worth buying. If not, you can get a South Florida or Miami home escrow agent to help you pull out of the contract and transfer your money back to you.
Lastly, it is important to have everything in writing to make sure that the property doesn’t appraise for less than the purchase price. A contingency clause allows the buyer to receive full written approval from the lender, before moving forward to the closing process. Therefore, you can cancel the contract and get your money back if your loan does not get approved. It is also important to have everything in writing so you know every deadline that you must reach in order to move forward with the house. If you do not have everything in writing, there is a chance that the seller can change the terms which can end up having a negative impact.
Find Your Next House With Lauren Benson
When buying or selling a house it is crucial to have a real estate agent by your side. It does not matter if you have bought a house before or if you are a first-time buyer, an agent can be paramount to your success on your next home. Whether you are looking for information on homes or a personal consultation to go over the market, we always give our clients the insight and advice that are detrimental to making the right deal. We take the time to completely understand your unique requirements, no matter the home. Whether you are in need of real estate sales, residential, commercial or rentals, we will be there for you every step of the way. Lauren Benson Real Estate is dedicated to providing an incredible home buying and selling experience. See how Lauren Benson can help you find or sell your next home by giving her a call at (914) 980-9669. Your dream house is just one call away!