How Should I Prepare to Sell My Property or Buy Another?

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Key Takeaways:

• When buying a property, you want to make sure the property doesn’t have any issues, and that your finances (as well as those of the other party) are entirely in order.

• When you enter into a contract to sell a property, you are obligated to sell it unless the buyer defaults.

• A real estate agent can help you with a comparative market analysis, which is a true/accurate valuation of your property. They can also tell you what price you should list your property at in order to entice buyers without bait-and-switching them.

• There are a number of common issues that may hold up real estate transactions in Miami-Dade County, including open titles and permits, and issues with title and ownership. They should ideally be searched for and dealt with before closing.

The best thing you can do to prepare to sell your property or buy another is to make sure of two things. You want to make sure that your property doesn’t have any issues, and you want to make sure that you don’t have any issues. You want to make sure that your finances are in order (and there aren’t, say, unresolved issues with tax liens), and you want to make sure that the property is in order.

It’s also essential to know that once you enter into a contract to sell a property, you are obligated to sell that property unless the buyer defaults. You, as the seller, cannot back out of the contract without risking a legal issue with the prospective buyer. This is one of the reasons that it is essential to check both your own financial wellbeing and that of the property before buying or selling a property.

I can give you an example of how this plays out in the real world. I had a client who agreed to sell their property for $750,000. However, they failed to disclose that they owed $800,000 on the property.

From the get-go, when they signed the contract to sell the house, they never gave the buyer what is called the “short sale disclosure.” In this case, when it came time to close the deal, the buyer demanded that the seller come up with the difference to cover the remaining debt owed on the property. My clients were obviously confused and alarmed, and made it clear that they didn’t have that type of money. However, the buyer tried to force them to figure it out and come up with the cash. He claimed that they were required to sell the property at the price they agreed to, and the new demand for money was not an issue nor a reason not to comply with the contract.

You should also have an accurate, “true” valuation of your property, and your listing should be somewhere close to that price. Some people decide to list their property at an unrealistic price in order to see if someone will bite and bid at a number that is not commensurate with the true valuation of the property. However, there’s always an appraisal, and if the appraisal doesn’t match the set price, then you run the risk that the deal will fall apart.

A realtor can help with this sort of valuation. They can do a comparative market analysis, which looks at many different factors (i.e., how big the property is, what condition it is in, what it looks like, what amenities it has, where it is located, etc.) and compares them to the neighboring properties and what the prices in the neighborhood have been. They will then usually advise you about what price you can list to safely entice buyers without pulling an unsustainable bait-and-switch that will ultimately destroy the contract and waste everyone’s time.

You also want to make sure that there are no open permits, code violations, liens, or fines on the property. Ideally, you should absolutely do this before closing. While many of these issues can be resolved if they are brought up and have to be dealt with during the closing process, doing so adds an additional layer of complication and difficulty.

What are Common Issues That Could Hold Up Real Estate Transactions Miami-Dade County?

One of the most common issues that I see holding up real estate transactions in Miami-Dade has to do with open permits.

Most people don’t realize is that an open or an expired permit is not a title issue. It doesn’t impact the marketability of your title. So, you can close with an open permit, you can close with an expired permit, and it doesn’t really create a title issue. Nonetheless, no buyer wants to purchase a headache; therefore, all purchase/sales contracts should contain a clause regarding the resolving of any permit or code violation issues prior to closing and whose responsibility it will be to deal with these issues. This way it is clear as to what party assumes responsibility for said issues so as to ensure that there are no unnecessary delays as a result of this issue.

Other issues that commonly come up and delay closings include code violations on the property that were never dealt with previously, or citations for work done without a permit that were never resolved and became violations with running fines. Those are issues that come up and can serve as a basis for possibly delaying the closing depending on the amount in question or the complexity of the issue involved.

A different sort of issue that we come across is when someone buys a property with a significant other in a way that complicates ownership. You might hear, “I bought this property with my boyfriend but we never got married”, or, “I bought this property with my husband when we were still dating but we never changed the ownership upon marriage and now my husband is deceased”. This can cause actual title issues, which can turn into probate issues.

I should note here that with regard to title and probate, people don’t realize their marriages from other countries are recognized in Florida. They might say, “I bought this property with my husband, but we’re only married in Cuba.” If you’re married anywhere, you’re married here in Florida, and if the property is your primary residence and you bought it together, your husband or wife has got to sign off on it regardless of whether they’re on title or not. This becomes especially tricky when one party wants to sell, and the other is refusing. We cannot actually force the other party to sign, so these sorts of disputes can obviously hold up a closing.

Another set of issues that comes up a lot in South Florida has to do with condominiums, which are very popular here.

For example, if the condo board is undertaking a project to repair the guardhouse and they hire a contractor, take out a loan, etc., then they are required to issue a Notice of Commencement. This will come up if you are attempting to sell your individual condo unit, and will require you to get an affidavit from the condo association stating what happened with the project, and having them resolve any outstanding issues before the title condition can be cleared.

Another common issue is when people have the same or similar common names and one party has liens and judgments and open conditions out on their name, which comes up under searches for the other party (since they share the same name). It’s obviously essential to make sure that the person who’s selling your prospective property is not the same person who has the judgment and/or liens against them. If you don’t make that distinction clear, it could hold up closing.

Those are all common issues that arise in real estate transactions here in Florida.

For more information on Real Estate Law in Florida, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (305) 363-6066 today.