Rental Property Investor · Cocoa Beach, FL · Member since 2019 · 3 posts · 0 votes
Hello all, Ive got a question in regards to closing on a deal.
So, say you found a good deal, on the MLS, Zillow, or whatever. You've got enough for your 20% down + closing costs. You're in contact with the seller and they accept your offer. What now? What are the following steps that are in between having your offer accepted, and to having someone put the units keys in your hand?
Also, Is there much of a difference between buying a property from a private seller? Say you do the door to door method in finding deals and the seller decides to just sell to you. Compared to looking at Zillow and going through a real estate agent that is listing the property?
There is better communication if you go direct to the seller. You are not playing the game of telephone you--->your broker-----> seller's broker------>seller and then back to you. A lot tends to get lost.
When going direct to the seller you have to come up with a PSA. So have your attorney write one up or edit a PSA specific to your jurisdiction. Other than the PSA there is not much difference. The PSA gets signed, You are given any documentation that is needed (seller's disclosures, rent rolls, t-12, bank records, sched C's etc, inspection is done, any re-trading due to BIG discrepancies in what your D&D found and what the seller declared to you, wait for title to be done and the financing to be complete sign the closing paperwork and get the keys.
Rental Property Investor · Cocoa Beach, FL · Member since 2019 · 3 posts · 0 votes
7y
@Neil Schoepp thanks a lot for the reply, Neil. That’s exactly what I was looking for. A list of the paperwork and miscellaneous items needed between the seller and myself. Off to go do research on all of that, thanks again!
Real Estate Agent · Tallahassee, FL · Member since 2017 · 135 posts · 67 votes
7y
If this is a SF, he may or may not have the records that Neil pointed out. So I recommending finding that out right away. Even with MF its sometimes hard to get this information as many investors just do not keep up with it.
I would recommend having an attorney or agent write the contract for you so you know your covered. Once signed by all, send contract to title company you chose and your lender. Delivery your binder/deposit to title company.
One you go under contract, then you need to have inspections done during your inspection period. In my area (don't know if this is state by state), commercial is normally 45 days and SF 15 days.
Find a good inspector. Schedule, notify homeowners of time and meet with inspector to perform.
If problems with inspection comes up, negotiate it with the seller. Keep in mind if there are issues you will need to get repair estimates.
Depending on your loan type, you will need to ask your lender if anything will prevent financing, if so those repairs will need to be done prior to closing - example roof needs replacing, poly pipes, wood rot, etc. Most insurance companies will not insure until the work is done.
After you have worked out inspections, authorize your lender to order the appraisal.
Order your survey.
Obtain insurance quotes and send to lender once you decide on one.
Once appraisal comes in, you can negotiate with the seller if problem with value.
While all of this is going on, make sure to send all your documents to your lender for final loan approval.
Your closing agent will run title search while the above is going on.
If house is currently occupied, make sure to do a walk thru a day or two before you close. Its important because you do not want to close on a house and then realize the seller/tenant left all their junk or the ac stopped working.
Once all is good, then you can close and obtain your keys.