Florida Mortgage Home Buying and Selling Strategies
These strategies very valuable and can save
you thousands of dollars. We invite you to print
off this information for you own personal use,
but we ask that you please do not copy or use
this information for business use or on other
websites, (although business websites are free
to link to this page). In addition, although
we feel that these strategies can be very helpful,
every deal is unique and these strategies may
not work in every situation. We ask you to use
your judgment and common sense when applying
these or any other home buying or selling strategies.
Get Pre-Qualified - Before you even
begin looking for a home, it is very important
to know what price of home you can afford. This
is done quite easily by getting pre-qualified
by a broker or lender. Being pre-qualified does
a few things in your favor.
- It lets you know exactly how much you can
- It greatly improves your chances of having
a buyer accept your offer.
- It simplifies the loan process after your
offer has been accepted.
- It gives you confidence and peace of
mind when looking for a home.
If you would like to get a pre-qualified and
receive a pre-qualification letter stating your
pre-qualified loan amount, please call or email
your personal Loan Specialist today and he/she
would be happy to help you! If you're not ready
to get pre-qualified, we have an informative
calculator than can help you get a rough
idea of what you can afford.
Preparing your offer - Once you have
determined the price range of the home that
you can afford, and have found a home that you
want to make an offer on in that price range,
there are two things you absolutely must do
before making an offer.
1) Always make sure that your real estate
agent gives you a list of comparable homes in
the neighborhood that are for sale and/or have
recently sold (this is called a comp list).
Once you have the comp list, separate all of
the recently sold homes, and then make an average
of the sold home prices. This will tell you
if the sellers asking price is above or below
the average selling price in your neighborhood,
which is vital when deciding what to offer.
2) Also on your comp list of recently sold
homes, find the number of days that each of
the sold homes were on the market before they
sold, and make another average. This average
gives you insight as to how long the sellers
home has been on the market compared to the
neighborhood average, and how motivated the
sellers are. Once you have these numbers, you
are ready to make an informed offer.
Making your offer - Statistically the
more offers you make the more likely the seller
is to accept one of them. In addition, most
peoples minds are preprogrammed to a "yes
or no" response when approached with an
option. Based on these two points, the following
offer strategy was developed and has had a high
We suggest that you always make at least two
simultaneous offers. We recommend making a lower
offer with few or no contingencies, and a higher
offer with a number of contingencies, such as
the seller agrees to include the ride on lawn
mower, include appliances, paint the house,
replace the roof, carpet, etc. Basically anything
that you can imagine can be added to an offer
as a contingency. The strategy involved here
is two-fold. First, by sending two simultaneous
offers, you utilize most peoples "yes or
no" programming to make them choose between
one of the two offers instead of deciding yes
or no on a single offer. Second, by giving the
buyer a list of contingencies, it inadvertently
lowers the sellers perception of the value of
his/her home, which means that he/she will be
more likely to accept a lower price.
Three things you should always have in your
offer - No matter what type of offer you
are making, you should always use the following
three statements in your offer. These three
statements allow you to protect yourself, back
out of any offer, or assign an offer to anyone
at any time.
1) "and/or assigns" - You should
always write this phrase after your name on
an offer (ex. John Doe and/or assigns). Doing
this allows you to assign your offer to anyone
at any time before that offer expires. This
can be very useful if you find someone that
wants to buy the home from you at a higher price.
Bottom line, using and/or assigns keeps your
2) "This offer is subject to partners
approval" - This is your escape clause
out of any offer. By having this clause in your
offer you can legally cancel it at any time.
Who is your partner? It can be anyone, including
your dog - it really doesn't matter.
3) "Seller agrees to have the home inspected
on or before (date), with offer subject to buyers
approval of Home Inspection analysis" -
Home inspections are something that many buyers
pay for, because it is relatively inexpensive;
However, you can request that the sellers pay
for it by simply adding something like the statement
above to your offer. By having this clause in
your offer, you protect yourself in case there's
something wrong with the house that you weren't
able to find on your own. If the inspector does
happen to find something wrong, you have the
option to walk away, have the seller fix it
at their expense, or have them lower their price.
Applying for your Mortgage - Once you
have an accepted offer, you need to secure financing.
We would like to invite you to fill
out our 1 minute Free Rate Quote or call
your personal Loan Specialist today. Your personal
Loan Specialist can help you find the right
mortgage program for your needs and can answer
any questions that you may have, with no pressure
or obligation. Call, Email, or Apply
Avoiding PMI - When you purchase a home
and your LTV (loan to value ratio) is more than
80%, you will be required to pay Private Mortgage
Insurance (PMI). This is a monthly fee paid
to protect the lenders interest in the property
in the event you default on your loan. In many
cases this is a extra fee that isn't necessary
if you set up your loan correctly, and can be
eliminated by having your 1st mortgage cover
80% of your loan, and then having a HELOC set
up as a second mortgage covering the remainder
of your loan (this can usually be done by your
personal Loan Specialist).
This simple change in your loan setup can often
save you thousands of dollars over the life
of your loan. Although sometimes, depending
on the type of mortgage, it can be cheaper to
pay the PMI if a particular mortgage program
offers a lower interest rate. Ask your personal
Loan Specialist about your options.
Realtor vs. For Sale By Owner (FSBO)
- There are pros and cons of having a realtor
and of selling your home on your own. In most
cases people sign up with realtors to sell their
homes, however there are strategies that can
be used when selling FSBO that can greatly improve
your response and speed up the sale. Below are
some strategies for selling your home with a
Realtor and for selling your home on your own.
Realtor Strategies - When signing with
a Realtor, you are basically paying him/her
a portion of the sale to do the sales work for
you, so other than keeping your home clean and
appealing, there's not much for you to do once
the Realtor agreement is signed. Therefore,
it is crucial that you find the best Realtor
for the job. This is pretty easy to do by simply
asking them the following 9 questions. (Remember,
don't settle for a mediocre agent or the first
agent that comes along. If they don't answer
these questions to your satisfaction, then don't
1) Can I cancel the listing at anytime if I'm
2) Will my home be placed on your web site?
If so, what is your web site address?
3) How do you plan on marketing my home? Is
this listed in the contract?
4) Will you provide us with an activity report
of the buyer's and agent's comments?
5) What is your average sales time vs. the MLS
(Multiple Listing Service)?
6) Do you have any professional designations?
7) Do you have a list of references that I can
8) If I find a buyer can I sell it myself?
9) Why should I list with you rather than any
other agent that is calling?
For Sale By Owner Strategies - FSBO
strategies are based more on ingenuity and creativity
than Realtor strategies. Realtors usually have
the MLS and a large network to draw from, where
FSBO networks are more limited. However, thanks
to the Internet, FSBO's have many more options
than in the past. Below are some strategies
for people that want to sell their homes on
their own. Remember, these are only a handful
of strategies; feel free to try new things and
modify these strategies to fit your situation.
Get $10,000 back at closing - What you want
to do is to catch potential buyers attention.
Having a sign that says Get $10,000 back vs.
a regular boring For Sale By Owner sign, makes
a huge difference. Do you really have to pay
the $10,000? Yes; However, you will also be
able to charge a higher price (typically $10,000
higher) for your home, which means you will
get the amount you wanted out of the house and
the buyer will get money back at closing. You
simply write the buyer a check for $10,000 after
you get your check from the title company. This
is a win-win and is quite effective. (Note:
$10,000 was used as an example. We suggest you
use whatever amount you feel comfortable using.)
Lease Option - This is a great strategy if
your house is vacant, isn't selling through
conventional methods, or if you don't have a
lot of equity in the home. Basically, with a
lease option, you lease your home to someone
(you essentially become the bank) for a specified
period of time, (usually for 1-3 years), at
which time the buyers are able to purchase the
home through a conventional lender. This approach
has several benefits for both the seller and
Seller Lease Option Benefits:
High Sales Price: Even if average home prices
are low, you will attract more buyers who
are willing to pay a premium because of the
terms and value you are offering.
Higher than Average Rent: Since you are
flexible on your terms and are offering value,
you can demand a higher than usual rent.
Positive Cash Flow: Since your rent is higher
than your mortgage payment, you will generate
a positive cash flow, which instantly turns
your home into an asset and increases your
personal buying power.
Non-refundable Option Deposit: When a buyer
signs your lease option, you receive an option
deposit that is yours to keep if they default
on the option, or don't make their payments.
(This deposit can be as much as 2-3% of the
No Realtor Commissions: Since you are selling
your home yourself, you save paying a 6-10%
Lower Advertising Costs: Lease option sellers
typically sell their homes more quickly than
regular FSBO's, which saves on advertising.
Attraction of High Quality Buyers: Because
your buyer has an invested interest in the
home, he/she tends to take better care of
Tax Shelter: Your name remains on the deed
until the option is exercised, which means
that you retain all of the tax benefits until
No Maintenance, No Landlording: Buyers who
have a vested interest and believe they are
a homeowner typically have a "pride of ownership"
that encourages them to pay on time, perform
maintenance, and make improvements to your
home. Additionally, you can delegate maintenance
to the buyer in your lease option agreement.
Larger Market of Buyers: You are making
your home more affordable to a larger market
Shorter Vacancies: You will typically receive
a larger number of calls when you advertise
your home as a lease option. The typical turnover
time is days or weeks rather than months or
Peace of Mind: It is safer than conventional
rentals because of the quality of the buyers
and their vested interest in your home. It
also means that someone is living on-site
who will watch and guard your home against
vandalism, fire, etc.
Buyer Lease Option Benefits:
Faster Equity Growth: Equity can accumulate
exponentially faster than with conventional
financing because each month that a buyer
pays rent, a portion of that payment will
be credited towards their down payment or
off of the sales price.
Option Deposit is Credited Towards the Purchase
of the Home: When a buyer signs a lease option,
he/she must pay the buyer an option deposit.
This money is the buyers vested interest in
the home and will be fully credited (100%)
to either the buyers down payment or off the
Minimum Cash Out of Pocket: In a conventional
purchase, the buyer must pay closing costs,
prepaids, and a down payment. With a lease
option, the buyer only pays the first month's
rent and an option deposit (typically 2-3%)
which saves the buyer between 25% and 85%.
Frequently No Down Payment at Closing: Since
both a portion of each monthly payment and
the option deposit are credited toward the
buyers closing costs (or sales price), there
will frequently be very little or nothing
left to come up with for a down payment at
the final closing on the property.
Credit Problems are Okay: Qualification
restrictions are not as strict as conventional
financing. You will be able to approve buyers
at your sole discretion.
Time: Before buyers actually purchase the
home, they will have time to repair their
credit, find the best financing available,
investigate the home and research the neighborhood.
(By making their payments for at least one
year on time, a lender can use that to help
a buyer qualify for a loan if they have had
payment issues in the past.)
Helping your Buyer Apply for a Mortgage
- Once your buyer has satisfied the terms of
your Lease Option, or if you have secured a
buyer through your FSBO efforts, we invite you
to invite your buyer to fill
out our 1 minute Free Rate Quote or call
your personal Loan Specialist today and he/she
can contact your buyer for you. Your personal
Florida Mortgage & Loan Specialist can help you find the right
mortgage program for your buyers needs and can
answer any questions that he or she may have,
with no pressure or obligation. Just Call, Email,
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