The Process of Buying Property in the USA

Let’s take the example of buying in Florida. Buying a property in Florida is surprisingly easy – if you do it right. Here’s our step-by-step guide to get you on the road to a home in the Sunshine State.


Step 1 – Find A Property (and an Agent)

The first thing you need to know is how the real estate agent system works in Florida.

All properties for sale are listed in a central database – so you don’t need to hunt round all the estate agents in town to look for the right property.

Just as in the UK, each property is represented by an agent – but even more so than in the UK – the agent representing the seller is a seller’s agent: they don’t charge the buyer any fees and are not under any obligation to describe the property accurately.

The solution to this is to employ a buyer’s agent or realtor yourself.

They will represent your interests and will ensure that the home you are buying is what it should be. You won’t have to pay them any fees either – they will share the seller’s commission with the seller’s agent.

Other than these differences, it’s just like the UK – find a property you like and negotiate a price for it. Once you’ve agreed verbally on the sale, it’s normal for the buyer to make a small deposit to show goodwill.


Step 2 – The Purchase Contract

Following your goodwill deposit, a purchase contract will be prepared for you and the seller to sign.

These contracts are binding and will require you to pay a 10 per cent deposit into Escrow (Escrow is widely used for property sales in the US).

If you haven’t already done so, you now need to arrange your mortgage or finance to ensure you don’t delay the completion of the sale.


Step 3 – Checking the Legal Formalities

After the purchase contract has been signed, you will use a Title Insurance company to check the legal title of the property and insure it against any third-party claims – protecting you from any future ownership disputes.

Now is also your final chance to discover any problems with the property that could void the purchase contract and allow you to back out of the sale.

Check with your buyer’s agent if you have any concerns over this and make sure you carry out all the checks required in your area.

Lawyers are not required for property sales in the US, and most buyers in Florida don’t use them – the Title Insurance company takes care of the legal aspects and nothing else is required.

You can, if you wish, have a lawyer look over all the paperwork, but it isn’t usually necessary.


Step 4 – Completion

Assuming there are no title issues with the property and your funding is in place, you should now be able to complete – often only 4-6 weeks after you made an offer.

Remember that your purchase contract will have some dates in it, fixing the schedule for completion. Failure to come up with funding on time, for example, could cause the sale to fall through and you to lose your deposit.

You should budget around 5% of the purchase price for “closing costs” – the various fees and taxes you will need to pay at completion. These will probably include:

  • Documentary Stamps ($0.35 for every $100 of mortgage)
  • Intangible Tax – 0.002% of your mortgage amount
  • Local Property Tax – paid to the county you are in, it’s based on the assessed value of your property – like UK Council Tax
  • Title Insurance – usually about 1% of a property’s cost, mandatory in Florida – varies in other States.
  • Title company’s fees – usually around $250


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