The majority of our compatriots prefer Florida to other regions of the United States. The wonderful climate, the stability of the economy, the exciting lifestyle of Miami and surrounding areas appeal to more and more Russians. Here in South Florida, it’s not only delightful to vacation, but also convenient to live, engage in sports, do business and rise a family. Don’t forget that here also exists a variety of investor programs that allow to profitably invest capital while obtaining residency in the U.S.
1. CONTRACTING A REALTOR
By law, it is not necessary to contract a Realtor, but a contract with a realtor will protect your rights and will grant you support from professionals who know the market and the many subtleties of the law.
2. CHOOSING AN ATTORNEY FOR THE FORMALIZATION OF THE DEAL
An attorney takes care of all the paperwork needed for the completion of the buying or selling of real estate. The attorney guarantees a smooth transaction and distributes the funds through an escrow account
3. REGISTERING A BUSINESS IN FLORIDA
By law, it is possible to acquire real estate as an individual. However, for non-U.S. residents, we recommend acquiring real estate as a registered business: this will minimize the tax when the property is sold in the future.
4. OPENING A BANK ACCOUNT IN AN AMERICAN BANK
It is not necessary to open a bank account at the time of closing a deal – funds can be transferred directly to the attorney if the purchase is registered to an escrow account. But, in the future, a local bank account is necessary for mortgage payments. To open a bank account, you must be present at the bank and bring your passport. The opening of an account tales 15-20 minutes.
Banks grant mortgage loans for up to 30 years at a fixed rate. The formalization of a loan takes 20-60 days. Initial deposit is 30-50%.
Real estate acquired with a loan can be registered to an individual or legal entity registered in the U.S.
A legal entity has a special account (escrow account) that is used solely for transactions at the time of closing a deal. In this account, are only the funds of the client, and the attorney has the right to distribute the funds by asking the client's permission. Any violations during the use of the escrow account are strictly punished by the law and lead to the revocation of the attorney’s license and legal prosecution.
According to experts, the prices of the real estate market in the U.S. have reached a critical low. The measures taken by the U.S. government will, in the near future, lead to growth in prices and their return to the pre-crisis levels. Presently, the real estate market in Florida is not experiencing any major problems. Constant demographic growth, limited territory and interest in investment make this region especially promising. Therefore, the market is expected to grow tremendously in comparison to other states.
(1-2% of proposed price)
5. WRITTEN OFFER TO SELLER
After you have seen the properties with your realtor and have made a decision, the realtor will help you make an offer to the seller. Based on the statistics of sales of similar properties in the preceding 6-12 months, a market prices is set for your property of choice. This price is included in the written offer, while the initial deposit is transferred into the escrow account, which can be recovered if the deal is cancelled for a reason not dependent on the buyer.
The seller may decline the offer and present a counter offer. The process continues until an agreement is reached. During this time, other terms are discussed: deadlines (for closing the deal), financing, the condition of the property, etc. Negotiations are done through the realtor.
7. SIGNING OF THE CONTRACT
(5%-10% of the negotiated price)
The final contract for purchase is signed by both parties after complete agreement on the basic parameters of the deal (price, deadlines, deposit). The buyer transfers the second deposit, which can be recovered in the case of cancellation of the deal for reasons not dependent on the buyer.
8. INSPECTION OF THE PROPERTY
($150-$500 – cost of an inspection, depending on the size of the property)
The buyer, in the span of 2-7 days, inspects the condition of the property by him/herself or with the help of a professional inspector. If there are no remarks about the condition of the property, the deal continues. The attorney determines the integrity of the title of the property (1-2 weeks) and checks whether there are any impediments or outstanding charges. All encumbrances must be taken care of by the seller before or at the time of the transfer of rights to the buyer. If the property has multiple units, it is necessary for the buyer to acquire consent for settlement from the resident association of the building.
Closing of the deal and final paperwork
In the office of the attorney, on a date chosen in advance, the rights of the property are transferred to the buyer and the mutual settlements are finalized between buyer and seller, as well as all third parties involved in the closing. Before signing the paperwork, the buyer transfers the remainder of the funds to the escrow account.
In the state of Florida, the realtor fees are paid by the seller of the property. The buyer, in turn, takes care of the attorney fees. For a purchase without financing, for every $100,000 of the price of the property, $500-600 are accounted as expenses for providing the verification and search of the title; in other words – attorney fees. At the closing of the deal, the attorney writes up an agreement where all expenses related to the deal between buyer and seller and stated. In this manner, every party bears its own part of expenses (verification of title and credit history, formalization of a new title for the buyer, etc.)
($200-$5000, depending on the level of the complex, infrastructure and size of units)
10. The maintenance fees of residential complexes include: insurance of building, garbage disposal, valet, cable television, Internet, security, maintenance of the building and its surroundings, maintenance of all property infrastructures, landscaping. Waterfront properties also include a beach club and, sometimes, a private marina.
11. Yearly property tax (paid in November)
(2% of estimated price)