The purpose of this note is to provide you with basic information
about buying a home without Real Estate Broker involvement.
Essentially, the process of buying a Residential Home in Florida is
simple and contains two parts:
Part 1: Signing the Real Estate Contract (Seller & Buyer)
The pre-printed Real Estate Contract should be simple and easy
to understand. If you do not Understand the pre-printed
contract presented to you by the seller, or you are afraid to
commit yourself to it without an attorney, then you can have it
reviewed by your attorney before you sign.
It takes an attorney about 1-2 hours to review a contract with you
and it is not expensive.
Keep in mind that every broker's first interest is in protecting
himself and often broker's forms will have clauses that protect
the broker at the expense of the Seller or Buyer.
Obviously there is no more risk involved in a "HOME
FOR SALE BY OWNER" transaction than in one where
a broker is involved.
Part 2: Escrow/Title Insurance Company
This part of the Home Buying/Selling transaction is handled by an Escrow
& Title Insurance Company and the Seller & Buyer involvement is passive.
The Escrow/Title Company functions are intermediary between the seller
and the buyer, and they protect the interests of both (Seller & Buyer).
The Escrow/Title Insurance Company:
Escrow is perhaps the most essential element of a real estate transaction.
The Escrow/Title Company functions as an intermediary between the seller
and the buyer, protecting the interests of both. When a property is purchased,
the funds flow from the buyer, or his lender, through the Escrow/Title Insurance
Company to the seller. But there is much more involved in the Escrow Process.
Other vital services performed by the Escrow/Title Insurance Companycan include:
* Preparing and providing the escrow instructions to the seller and buyer
* Ascertain the legal ownership of the property, including all loans and other
encumbrances, through a title search
* Confirm that the property meets the qualifications required by the lender for
the loan to be funded
* Confirm that the buyer meets the lender's qualifications to purchase the property
* Confirm that all legal documentation is complete and accurate
* Confirm that all financial obligations have been correctly prorated
* Close escrow when all obligations have been met by the seller, buyer, and involved
lending institutions.
* Disburse the funds to the respective parties (seller, seller's mortgage company, etc.)
* Complete final statements
The activities of the Escrow/Title Insurance Company are subject to review by state
governmental authorities. This oversight protects property sellers and buyers and ensures
that the activities performed by the Escrow/Title Insurance Company stay within the confines
of the law.
Title insurance protects the buyer in the event that any hidden liens or claims are discovered
after ownership or title is transfered from seller to the new owner. The Escrow/Title Insurance
Company performs a thorough search to insure that there are no hidden liens, forged, falsified
property records or claims on the property that you are buying.
In most real estate transactions, the seller must provide a Title Insurance Policy covering the buyer.
The buyer receives such a policy when escrow closes.
If any claim or lien appears after the property is bought, the Title Insurance Policy will reimburse
the new owner for the losses covered under the terms of the policy. The Escrow/Title Insurance
Company may also hold the deposits rendered when you make an offer on a property.
The Escrow/Title Insurance Company can also assist with the Closing. They can be of great
assistance in preparing the Closing Statement and related documents.
Many Escrow/Title Insurance Companies provide
specialized services for properties that are being
sold by the owner.