- You do not strictly need either a real estate attorney or a real estate agent to buy or sell property in South Florida. In simple cases, all you really need to do is hire a title company to do the paperwork for you.
- It is definitely advisable to hire a real estate attorney if your case is not extremely simple or if you have any reason not to trust any of the parties involved.
- A real estate attorney will prevent you from falling into very common, often disastrous traps, and will know how to look out for you.
- A real estate agent is extremely helpful if you aren’t sure which specific property you want to buy.
- Buyers of South Florida real estate should check up on many different factors before closing. These include making sure there are no code violations, open permits, unpaid fines/violations, and, if you are buying from or selling to a foreign national, that FIRPTA (Foreign Investment Real Property Tax Act) payments have been made.
If you’re trying to buy or sell property in South Florida, you may be wondering who you need to enlist to help you. Many people think that potential buyers and sellers of South Florida property need to hire either a real estate agent or a real estate attorney, or perhaps even both.
The truth is, however, that you don’t strictly need to hire either one.
It is obviously advisable to have an attorney on-hand during all real estate transactions, in South Florida and elsewhere. They can help you negotiate the purchase and sale in the event that something goes wrong or becomes complicated, and can help you catch things that might go wrong or get complicated before it happens.
However, in most basic, boiler-plate South Florida real estate purchases and sales in which no one is trying to take advantage of anyone else, all you actually need to get started is someone to do the title work for you. For example, let’s say that you’re buying a house from a family member in South Florida. When it comes to negotiating for and establishing a price, you can do the legwork yourself. Then, the two of you can find a title company who will do the paperwork for you.
Notably, though, if you have any reason not to completely trust the seller/buyer and the title company, an attorney—while not strictly required—is extremely highly recommended. Without a real estate attorney, you have no one looking out for your best interests and potential injuries.
Obviously, as a South Florida real estate attorney, I’m biased in favor of hiring South Florida real estate attorneys. But it should be noted that purchasing real estate is often the biggest investment that a person will make in their lifetime, and it is therefore advisable for them to at least seek expert confirmation that they are actually buying what they think that they are buying.
Otherwise, it’s caveat emptor: if you don’t have someone looking for your interests, what you thought you were buying may not be what you’re receiving.
Therefore, having a real estate attorney—while not strictly required—is extremely advisable. A South Florida real estate attorney can do the title work for you and make sure that the documents are properly conveying title to you. They can advise you of any issues that may plague the property, and ensure that those issues are resolved prior to you taking ownership.
As far as real estate agents go, there are also reasons you might want to hire a real estate agent in certain circumstances when buying or selling South Florida property. Specifically, they are very useful if you do not know exactly which property you want to buy.
If you aren’t sure which property you want to buy yet, a Florida real estate attorney can’t really help you. A Florida real estate agent, on the other hand, can. They have access to what is referred to as the Multiple Listing System (MLS), which can very easily search through properties within specific parameters.
A real estate agent can sit down and say, “Okay, exactly what are you looking for?” They can search for exactly what you want, narrowing choices down by type of property, zip code, and other parameters. They can drill down and filter through the available properties to give you a list of however many prospective properties they can find that meet your requirements.
Once you have the property identified and under contract, that’s where the real estate attorney comes into play. So, while you don’t strictly need either one, there is a very symbiotic relationship between the real estate agent and the real estate attorney in South Florida. Ideally, the real estate agent will find your dream home and the real estate attorney will ensure that it is a dream and not a nightmare.
What are Some of the Most Important Factors to Consider and Potential Issues to Look Out for When Buying or Selling a Real Property in Florida?
When buying or selling property in South Florida, any potential things to consider or issues to look out for are dependent upon may different factors.
For example, is this a commercial transaction or a residential transaction? If this is a residential purchase, will the property in question be your primary home, secondary/vacation home, or an investment property? Are you looking to purchase the property to retain yourself, or are you intending on fixing it up and flipping it?
The potential issues that can arise in these matters are all unique to each different type of property, and even to each specific individual property itself.
That said, there are several general, critical issues that you want to check up on and deal with when you’re looking at any property. These include making sure:
- That there are no code violations or code compliance issues on the property.
- That there are no open permits on the property that haven’t been closed out.
- That there are no fines or violations by the city on the property that haven’t been addressed/paid.
- That there are no environmental issues.
There are certain things that you don’t have to look out for unless your purchase or sale meets very specific qualifications.
For example, if you’re buying a property from a foreign national, you want to make sure that your attorney collects something referred to as the FIRPTA (Foreign Investment Real Property Tax Act) tax, which is required when foreign nationals sell property.
The US government came up with FIRPTA to prevent foreign nationals from buying property here, selling it at a profit, walking away with all the money without paying taxes on it. This was a common occurrence before the enactment of FIRPTA.
Now that FIRPTA is law, if a foreign national that doesn’t file taxes (i.e., they don’t file a 1040 or they’re not a resident or they’re not a citizen) buys a property, then a percentage of the gross sales price has to be withheld and submitted to the IRS to ensure that they capture the tax on the gains.
The issue with FIRPTA is that it puts the onus on the buyer to ensure that that’s done. So, if a purchaser buys a property from a foreign national and the FIRPTA money is not collected and paid to the IRS, then the IRS does not go after the foreign national. Instead, they go after the buyer and say, “You were tasked with the obligation of ensuring that this amount was collected at closing. You failed to do so, and therefore you owe the money”.
I just had a transaction recently where the FIRPTA withholding was $300,000, which we withheld as required. Six months later, the IRS sent the buyer a letter saying, “You owe us $173,000.” The buyer called me freaking out, which was understandable. However, because I knew to withhold FIRPTA, I was able to reassure him that we had done so, and clear up the issue right away.
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.