Upper & Middle Keys Buyers Pages

Inspections-what to expect

Siding: Look for dents or buckling
Foundations: Look for cracks or water seepage
Exterior Brick: Look for cracked bricks or mortar pulling away from bricks
Insulation: Look for condition, adequate rating for climate (the higher the R value, the more effective the insulation is)
Doors and Windows: Look for loose or tight fits, condition of locks, condition of weatherstripping
Roof: Look for age, conditions of flashing, pooling water, buckled shingles, or loose gutters and downspouts
Ceilings, walls, and moldings. Look for loose pieces, dry wall that is pulling away.
Porch/Deck: Loose railings or step, rot
Electrical: Look for condition of fuse box/circuit breakers, number of outlets in each room.
Plumbing: Look for poor water pressure, banging pipes, rust spots or corrosion that indicate leaks, sufficient insulation
Water Heater: Look for age, size adequate for house, speed of recovery, energy rating.
Furnace/Air Conditioning: Look for age, energy rating. Furnaces are rated by annual fuel utilization efficiency; the higher the rating, the lower your fuel costs. However, other factors such as payback period and other operating costs, such as electricity to operate motors.
Garage: Look for exterior in good repair; condition of floor—cracks, stains, etc.; condition of door mechanism.
Basement: Look for water leakage, musty smell.
Attic: Look for adequate ventilation, water leaks from roof.
Septic Tanks (if applicable): Adequate absorption field capacity for the percolation rate in your area and the size of your family.
Driveways/Sidewalks: Look for cracks, heaving pavement, crumbling near edges, stains.
www.REALTOR.org/realtormag Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS® . Copyright 2003. All rights reserved

Florida Homestead exemption

New 2008 property tax Reforms:
In a January 2008 ballot measure, Florida voters approved a constitutional amendment that introduced several changes to our state's property tax system. The four changes may affect the amount of tax you owe:
Increased Homestead Exemption: If you're currently receiving a $25,000 homestead exemption on your property taxes, you will automatically be upgraded to a $50,000 exemption this year. If you are a homeowner and do not currently receive the exemption, you may file your application in person along with a $15 late fee, through mid-September.
Save Our Homes Portability Cap: You may now trasfer up to $500,000 of your property tax cap to a new home when you move. To take advantage of this benefit, you must file a Homestead Exemption and Portability Application.

Tangible Personal Property Tax Exemption: If you're required to file a Tangible Personal Property Tax Return, you're entitled to a $25,000 exemption on business equipment.
Non-Homestead Cap: Beginning next year, those properties not eligible for a homestead exemption may apply to receive a 10% cap on property tax increases.

Homestead Exemption Overview:
FILING PERIOD JANUARY 1 – MARCH 1
Florida law requires that application be made by March 1st to be eligible for the $25,000 Homestead Exemption. Only new applicants or those who had a change of residence need apply. Automatic renewals are mailed in January each year.

In Florida, $25,000 of the assessed value of your home is exempt from real estate taxes, but you have to meet certain criteria to be eligible for the exemption. First you much have the title or record to your property as of January 1, and reside on the property. You have to be a legal and permanent resident of Florida as of January 1. When applying for the exemption status, bring along a copy of your deed or tax bill, and a Florida county voters registration or Declaration of Domicile. If you drive, you must also bring your Florida driver's license and automobile registration. New applications must be submitted in person at the appraiser's office, but renewals may be done by mail. For further information, consult the County Property Appraiser's Office.

Real Estate Taxes

All residents are subject to county taxes, but each city or special district levies taxes within its boundaries. City, special-district, and county taxes are combined in one tax bill. Real estate taxes are assessed as of January 1 each year. They are due and payable on November 1 and become delinquent if not paid before April 1 of the following year. Florida law holds the taxpayer responsible for receiving and paying tax bills in full. For additional information contact the County Property Appraiser's Office.

Establishing Residency

To establish residency, you may register to vote or file a Declaration of Domicile, which is an affidavit available at the CountyCourthouse. Filing one copy with the Circuit Court provides a record of your intention to make Florida your home. Simply moving to the State does not guarantee legal residency. For more information contact the County's Clerk of Circuit Court.

What is Homestead Exemption?
Florida Law entitles every person, who has legal or equitable title to real estate and maintains it as his/her permanent residence, to apply for a $25,000 homestead property tax exemption. A partial exemption may apply if the ownership of the applicant is less than 100%.

Am I eligible to file?
You must meet the following requirements as of January 1st:

Have legal or beneficial title to the property, recorded in the Official Records of County
Residency on the property
Be a permanent resident of the State of Florida
Be a United States citizen or possess a Permanent Residence Card (green card)

When do I file?
The deadline to file an application for exemption is March 1st. Under Florida law, failure to file for any exemption by March 1st constitutes a waiver of the exemption privilege for the year.
Regular filing is January 2nd - March 1st.
Pre-filing for the coming year is March 2nd - December 31st.

How do I file?
Take copies of the required documentation to your Exemption Department:Generally at the County or City Court House

The buying process in the Keys

Information unique to buying a home in the Florida Keys:
As you may be aware, the environment that makes the Keys so attractive to thousands of people is a fragile environment the requires considerable attention to protect its health and beauty. This fact has created a requirement for close management of all activities that have or might have negative impact on the environment now or in the foreseeable future. The result is a number of "unique to the Keys" regulations and procedures concerning property ownership. They are provided for information purposes to broaden your understanding of what is important when purchasing property in the Keys.

Flood Insurance:
The buyer must determine the insurability of the property against flood damage by seeking the advice of a qualified insurance agent. Structures built before January 1, 1975 (pre-firm) are subject to rules governing substantial and non-substantial improvements to pre-firm structures which may
limit the reconstruction, rehabilitation or addition to the pre-firm structure. Structures built after January 1, 1975 that have enclosures below the Base Flood Elevation (BFE) are typically not habitable. The existence of habitable space below the BFE may require demolition or an increase in insurance premium. Buyers should contact the Monroe County Federal Emergency Management Coordinator or the City of Key West, City of Key Colony Beach, City of Layton, City of Islamorada and City of Marathon to ascertain how these rules may impact on the property of interest.

Coastal Barrier Resources System Act (CBRS):
Certain properties in Monroe County may be affected by the Federal Coastal Barrier Resources System Act or proposed amendments. For information contact the United States Department of the Interior, the Monroe County Planning Department or your legal representative. Property so designated is not eligible for federally subsidized flood insurance as well as other benefits.

Land Use Disclosure:
Due to the unpredictable and constantly changing status of the municipal, county and state regulations for property developments in Monroe County each buyer should contact the appropriate local government department(s) to determine how the subject property may be affected by the Comprehensive Plan and the action necessary to ensure compliance with the plan. Additionally, a property may be affected by restrictive covenants in the form of deed restrictions, Homeowners Association Rules & Restrictions, etc. Every Buyer needs to inquire about them. They also should inquire into state and local governmental zoning and land use regulations and restrictive covenants to determine whether the subject property is in compliance with all state and local government laws, codes and ordinances, and restrictive covenants.

Monroe County Growth Management Division, 305-289-2500
Key Colony Beach Building & Zoning, 305-289-0247
City of Key West, 305-295-1000
City of Layton, 305-664-4667
City of Islamorada 305-664-2345
City of Marathon, 305-289-2501

Monroe County Year 2010 Comprehensive Plan:
The use of the property may be affected by the Land Use Plan, enacted September 15, 1986, revised January/1996, with subsequent revisions due every five (5) years hence or the availability of utilities and sewage disposal now or in the future. The transient rental of single-family residences in I.S. districts has been questioned by Monroe County and regulation by Local or State government may restrict such rentals in certain areas. Properly functioning septic tanks are the minimum permissible on site sewage disposal systems (OSDS). An allocation ordinance exists which limits the number of building permits issued for residential dwelling units. Prior to signing a contract, seek legal counsel or consult with the Monroe County Planning and Zoning Departments. Monroe County is an area of State Critical Concern that heightens the degree of regulation by the State of Florida.

City of Key West Land Use:
The City of Key West has debated the definition of vacation rentals and implementation of legislation to regulate, license, permit or prohibits within the City limits of Key West. If a Buyer is considering renting their property they should discuss the status of this issue with the Key West Planning Dept. to understand its impacts on the Buyer's proposed use of the property.

Non-Conformities:
Structures and uses that do not conform to uses provided for in the land use category that the property or use is located in are considered non-conforming. Such uses and structures are currently allowed to continue but they are not allowed to be expanded, enlarged or continued if substantially destroyed (more than 50% of the value of the structure). Zoning together with the uses provided there under which do not conform to the future Land Use Designations are considered non-conforming. Furthermore, non-conformities are jeopardized if abandoned. Buyers should seek legal counsel or consult with the Monroe County Planning and Zoning Department to determine whether a property is non-conforming today or may be in the future.

Radon Gas:
Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health unit. Pursuant to 404.056(8), Florida Statutes.

Energy Efficiency Rating:
The Purchaser may have the Energy Efficiency Rating of the building determined at buyers expense by a person certified by the Department of Community Affairs.

Concrete Disclosure:
Various concrete structures in the Keys have been found to contain excessive levels of Chloride. This has caused a condition known as spalling which results from the rusting and expansion of steel rebar which reinforces the concrete.

Sewage Disclosure Form:
The City of Marathon and unincorporated Monroe County have taken steps to upgrade to central sewer systems. For questions regarding the timing of the upgrades or estimated hook-up fees, contact:
Monroe County Health Department
3333 Overseas Highway
Marathon, FL 33050
(305) 289-2450 -OR-City of Marathon
10045-55 Overseas Highway
Marathon, FL 33050
(305) 743-0033

Lead Base Paint Warning:
For homes, apartments or condominiums built prior to 1978. Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligent quotient, behavioral problems and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller’s possession and notify the buyer of any known lead-based paint. A risk assessment or inspection for possible lead-based paint hazards is reconverted prior to purchase

Financing

Working with a lender should always be the first step towards buying a home. The most emotional aspect of the home purchase process stems from financing; so it's always smart to deal with the money demon up front. As a buyer, you should be looking to get "pre-approved" with a lender. Essentially, you want a lender to hand you a piece of paper stating that they have reviewed your financial information, credit history, etc. and they are willing to loan you "X" amount of money when you find a new home to purchase.

Once your pre-approval is out of the way, you will feel much more relaxed about the house hunting process. You won't feel that nagging "money" though itching in the back of your mind because getting pre-approved ensures you understand exactly how much home you can afford. Knowing your approved loan amount allows you to:

1. Focus your home search more efficiently. Don't burn time looking at homes you cannot afford, you'll miss out on homes within your price range that you would absolutely love. This is a very common mistake..

2. Negotiating power. Let's say you find a home priced at "X" amount of money. Let's also assume that two others buyers are interested in purchasing that same home. Simultaneously, the seller receives multiple offers, (this is not a far fetched scenario, by any means……it happens more often than you would think). If all three offers account for the full price, yet only one offer indicates that the purchasers are pre-approved, which offer do you think that the seller will accept?

You're right! The offers from those purchasers who have already have a lender backing them. Plain and simple….getting pre-approved gives you a tremendous negotiation advantage, and makes purchasing a home run much more smoothly.

In financing a home, your loan officer should provide you with what is commonly known as a Good Faith Estimate (GFE). Receiving this document should be one of your goals when getting pre-approved. The GFE provides you with a breakdown of costs normally associated with closing the home. However, keep in mind that most GFE's do not take into consideration costs associated with Inspections, Surveys, Utility Hookups, etc. The GFE items normally include costs centered around the lender's fees and the closing agency fees - more on closing agency fees later. Also, an exact figure may not be possible to calculate until you have located a home that you've decided to purchase. However, most lenders can provide you with a rough estimate based upon the maximum loan amount.

Feeling confused and sometimes frustrated with the lendind process is fairly common. The mortgage center within this web site should help alleviate some of your frustration. In addition, your Realtor should be able to put you in touch with a lender that can help explain your various financing options.

Searching for Homes

Most likely you've already done this to some degree. Everybody picks up a Homes magazine or a newspaper before contacting a Realtor. Just shy away from getting too involved in the hunt before your pre-approved.

Chances are that you will begin the home hunting process by reviewing with your Realtor those homes that you've already chosen from the trade publications. Your Realtor can provide you with extended information regarding each home you've chosen as well as provide you with additional homes that may meet your needs.

In order to do this, your Realtor utilizes a system called the Multiple Listing Service (MLS). In short, the MLS is a huge database that keeps track of all of the area properties that have ever been listed or sold. Basically, every local Realtor, inputs his or her listings into the MLS database. With access to the MLS database every local Realtor receives access to every local listing. Yes, your Realtor can show you another Realtor's listings. In the rare instance that he or she cannot, your Realtor will notify you.

The MLS is a powerful system that enables Realtors to help price properties, locate available listings for current buyers, review trends in specific areas, and develop real estate forecasts. The only data not listed within the MLS are those listings sold by the owners directly (statistically, this accounts for less than 1.5% of all real estate transactions, according to NAR.)

In the rare instance that you happen to find a home that is For Sale By Owner (FSBO), you may want to contact your Realtor before contacting the owner. Your Realtor is there to help guide you through the home buying process. To help make a FSBO purchase as simple as possible, provide your Realtor with any information that you've acquired regarding the property. Ask your Realtor to contact the owner on your behalf. Your Realtor will then do so, and ask the owner if he or she will consider working with a buyer who is represented by a Realtor (Surprising, most FSBO's will.) Should the current owner refuse to do so, your Realtor will notify you. At that time, you have the option to work with the seller directly, or hire the Realtor to represent you in the transaction (in most cases the latter is a cost to you as the buyer.)

Also, if you are interested in building, inform your Realtor. Builders frequently campaign their products to Realtors, so the best source of knowledge regarding area builders is most likely your Realtor.

In nearly every case, your Realtor can show you a home that is listed by any other Realtor in the area. So for example, if you found a home that is listed with a Realtor from company A, yet your Realtor works for Company B…..chances are that your Realtor can still show you that home and represent you in the transaction. If for some legal reason, your Realtor cannot do so, he or she will inform you.

Once you've located a few homes that you'd like to get a closer look at. Your Realtor will schedule a showing for each home. Enjoy the showing process…..you've taken care of the financing business…..now is the time to fall in love with your new home.

The Purchase

The offer sets the stage for the entire real estate transaction. In short, you and the seller are agreeing to every stage of the process……in writing. The one thing to remember about real estate transactions is that EVERYTHING is negotiable…….this includes, price, appliances, time of possession, EVERYTHING. If you decide that it would be wise to offer the seller's full asking price, yet demand that they sing "Yankee Doodle Dandy" at your son's birthday party, you have EVERY right to make that offer. Believe it or not……real estate transactions can sometimes get that loopy.

Seller's Disclosure Form
The offer begins with reviewing the Seller's Disclosure information. Basically, the seller must reveal everything that he or she knows about the property in its past or present condition. This form list a variety of questions that the seller must answer regarding specific areas of the home (e.g. roof, furnace, plumbing, etc.) You may have already reviewed this form, as many are located inside various homes during the showing process.

In some instances, the seller may not know the answer to every question presented on the Seller's Disclosure Form. However, in such an instance the Seller must indicate on the form that he or she "Does not know".

Most likely you will be required to sign that you have reviewed the Seller's Disclosure Form. If you do not feel comfortable with the seller's knowledge of a few items on the Disclosure Form, consider having your Realtor address your concerns, in your offer (a.k.a. Purchase Agreement).

Lead Base Paint Disclosure
In addition to the Seller's Disclosure Form, you may be required to sign a Lead Based Paint Disclosure. Essentially, any home built before 1974, may have been painted utilizing lead based paint. The Seller(s) must reveal any knowledge that he or she may possess regarding the presence of lead base paint in the home. You then have the option to accept or reject a lead based paint inspection prior to closing. For more information regarding lead base paint, consider the EPA's booklet regarding lead in your home.

Purchase Agreement……the offer
Sooner or later, you will get to the actual purchase agreement. Traditionally, Realtors utilize a standard form in making an offer. Most purchase agreement forms were developed by a team of attorney's to help prevent any legal loopholes from jumping into the picture. If you'd like, feel free to ask your Realtor to give you a copy of the Purchase Agreement while you are still looking at various homes. That way when you find a home that you like, you will already be familiar with the purchase agreement form…..it simply makes the whole process a little less daunting.

In reality, the purchase agreement is a legal and binding contract designed to determine the means and process by which the real estate transaction will transpire. Everything is agreed upon in writing….and nothing is assumed.

Some of the aspects of the purchase agreement include:

1. Property address and legal description.
2. Purchase price
3. Means of financing (loan, cash, etc.)
4. Items to stay with the property……Washer's, Dryer's, Refrigerators.
(One note, in most cases anything that is permanently attached to the home is regarded as a "fixture". This prevents you from having to label every doorknob and window latch in your purchase agreement. However, check with your Realtor to be certain of what items stay with the home and what item go with the sellers.)
5. Inspections
6. Earnest Money

This aspect always seems to throw buyers for some reason. The earnest money is an amount that the purchaser provides to the listing broker to show that the offer is being made in good faith. When the offer is accepted by the seller, the listing broker must deposit the check into an account that neither the buyer, seller, nor the broker can draw interest upon. At closing the earnest money deposit is applied to your closing costs.

7. Closing and Possession Dates

The entire purchase agreement stage can seem overwhelming. At the root of it all is the art of negotiations….which is one of the reasons why you are working with your Realtor. Your Realtor is there to represent YOU.