Always be pre-approved for a loan. There are 3 types of pre-approval:

• Pre-qualify Letter: a cursory look at the buyer's financial history and the least effective form of determining whether a buyer is qualified or not.
• Pre-Approval Letter: a more trusted source for determining a buyer's financial capabilities. Here, the lender verifies the buyer's financial information but is not reviewed by the lender's underwriters.
• “Buyer Ready”, “Conditional Approval”, or “Pre-Commitment” takes the pre-approval process one step further by having the buyer's file reviewed by underwriting. A Pre-Loan Commitment is issued pending certain events or conditions such as: (i) appraisal; (ii) title policy/clear title; (iii) flood elevation; (iv) home owners insurance. It should take a lender no more than 2 days to issue a Conditional Approval.

Making an Offer…there are 2 types on Purchase and Sale contracts that a buyer can use. All Florida real estate agents must use a contract approved by the Florida Supreme Court.

Offers should include:

1. Pre-approval letter from a major lender, if a mortgage is involved
2. Seller's Disclosure Statement (obtained from the seller)
3. The offer
4. Copy of escrow check
5. All appropriate addenda

• Proof of funds if cash offer is a good idea

Negotiations: Your agent will use his/her negotiating skills to work the best possible deal for their client/buyer.

Acceptance: If the seller and buyer successfully conclude negotiations, then a series of event take place on a specific time table outlined in the contract such as:

Appraisal paid by buyer $275

Insurance inspection

FHA/VA Inspection

Walk-through Inspection by Buyer Before closing

In an effort to keep a contract intact…in essence, “letting cooler heads prevail”…contracts have language that help keep the “spirit” of the contract intact while negotiating items in need of repair that may be exposed during a home inspection.

Once the inspection is completed and the results indicate some repairs are needed, the contract has a remedy clause called “repair limits.” The loose definition of “Repair Limits” is the dollar amount that the seller will consider and possibly negotiate for a credit in behalf of the buyer for any inspection related items that fall under any of the “repair limit” items. If such repair items are equal to or less than the “repair limit” (default is 1.5% of sales price but can be set at any dollar amount), ideally the contract remains intact and the buyer's agent and the seller's agent work to negotiate a fair and mutually agreed settlement with final approval by seller and buyer.

Inspection Report Repair Limits: Both the FAR and FAR/BAR contracts have a section for “Repair Limits.” It is up for negotiations between seller and buyer as to the exact amount of the “Repair Limits.” The contract default is 1.5% of the sales price for each of these 3 items: (i) General warranted items; (ii) Open building permits; (iii) termites.

FAR/BAR Contract

XII: MAXIMUM REPAIR COSTS: Seller shall not be responsible for payments in excess of:

As a general rule, if the buyer wants a “fast escape exit clause”, they would offer an “as-as” contract with “zero” repair limits. If the buyer desires a slightly more negotiable position, an “as-is” contract with $1000 repair limits. If the buyer wants to keep the contract in play with the most flexibility, then the buyer would opt for a FAR/BAR (not “as-is”) contract with 1.5% repair limits.

Rates: Rates vary from one bank to another even though all lenders get their money from the same place. There is an “inside” rate and a “retail rate.” Ask for the rate they give their favorite real estate agent that brings them lots of deals. The inside rate is about 3/8% better than the retail rate.

Closing costs: Ask for a “estimated cost to close” statement or a preliminary HUD 1. Upfront!!!!!

YSP: The most “undisclosed” cost that a buyer pays when closing a mortgage. Lenders do not have to charge barrowers a YSP, but most do because it raises their commission and spread on the deal. No one wants to talk about the “YSP” (Yield Spread Premium) because it is BIG MONEY for mortgage brokers and bankers. The YSP is the difference between your rate and the rate the lender is paying for money. Ask your lender what their YSP is. They'll be taken back a bit because no one ever asks that question but it is important to know and even more important to let the lender know that you are WATCHING…

Beware of “in-house” real estate agents offering their own mortgages... Particularly the “YSP.”

Once a contract is fully executed, our software takes over from there setting up a series of time lines (dates) that need to be tracked…such as second deposits, inspections, appraisals, re-inspections, documents, email history and more…

All ADDvantage buyers will be able to see the entire closing process through our “closing software.” You will have an account (user name and password protected) at http://www.addvantagerealestate.com/ that will enable you to view all the important contract dates and what has been done by ADDvantage to get your property closed fast and professionally. All documents will be uploaded into each buyer's account for easy retrieval or for a buyer to upload their own document.